Real estate investors who think they can do everything are playing a very risky game. Whether it comes from an elevated sense of pride or a desire to save money, investors who refrain from educating themselves and finding mentors are seriously inhibiting their own chances of growing a successful portfolio.
“An investor who takes that approach is going to lose money; either the money they have invested or any capital they have raised,” says Nam Ratna of Go Get It Real Estate. “So many investors lose money because they didn’t have the proper skills to analyze a property, asses a budget, or to determine what the after repair value is going to be.”
Ratna encounters many real estate investors who are suffering from making some basic errors. A common consequence for investors without the adequate knowledge is being stuck with a property they had intended to flip. A successful flip should be done in 3 – 4 months, but some investors are still holding their properties three years later.
“It generally happens because the investor didn’t analyze the property – they overvalued it and under budgeted for their repairs,” Ratna says. “These are two of the biggest mistakes investors make and they can be mitigated by partnering with an experienced mentor, someone who has been there and done it. So many investors don’t know how to study comparables and then under budget their repairs because they are either trying to cut corners or trying to justify the deal because they were not able to negotiate the right price.”
In addition to the financial problems that arise from investing without the right guidance, those investors are also likely to suffer mental strife, which can be even more damaging. When people get into the industry without mentorship and support and then lose money, they often lose faith in the opportunities that real estate investing presents when it’s done properly.
“Going about it the wrong way and having a bad experience can seriously halt someone’s ability to secure the life and retirement that they wanted,” Ratna says. “Having a mentor helps people find ways to avoid that happening. It helps them deal with obstacles and develop the right mindset.”
Download this whitepaper to find out more about the impact that mentoring in real estate can have