It's foolish to think you can get involved in real estate investing and not make any mistakes.  You will make mistakes.  But your goal is to make as few mistakes as possible.  And, to never make the same mistake twice.

Listed below are 7 common mistakes of new real estate investors.

1. Paying to Much: You must do your due diligence before you purchase a home.  Just because something sounds like a good deal (or your agent tells you it is) make sure you crunch the numbers and compare it to recent sales.  You must also determine the cash flow the property will produce and whether or not you will have equity in your investment.  Do not base your decision solely on future "appreciation."  That's a recipe for failure.

2. Misjudging Cash Flow: One of the most common mistakes of new real estate investors is determining the cash flow of a property.  You must accurately forecast your expenses, compared to revenue.  Don't forget to anticipate for maintenance and upkeep, property taxes, insurance, vacancy, advertising, etc.

3. Thinking You'll Get Rich Quick: Anyone looking to get rich quick should consider rethinking their approach.  Typically, real estate investing is a "long-term" strategy.  Yes, you can make money "flipping" properties, but you will also pay capital gains and real estate agent commissions on your sales.

4. Playing the Lone Ranger: All successful real estate investors have a team because it's foolish to go it alone.  You will need an accountant, a lawyer, Realtor, property manager, banker and several other key people on your team. 

5. Not Getting a Property Inspected First: Never purchase a property until you have a neutral, and qualified, home inspector look at the property.  Most banks will not approve financing until a property has been inspected anyway.

6. Thinking Short Term: As I mentioned earlier, real estate investing is typically a long-term strategy.  Thinking short term is one of the quickest ways to get frustrated or go bankrupt.  Know your numbers, be disciplined and stay long term.

7. Not Having a Game Plan: Once again, you must have a game plan before you purchase a property.  Don't purchase a property and then try to come up with a game plan.  Once you have a game-plan, stay disciplined.

In review, you will make mistakes from time to time.  That's okay.  But learn from your mistakes, and when possible, learn from other people's mistakes.  And don't make the same mistake twice.

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