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10 Costly Mistakes to Avoid as a New Real Estate Investor<br />
I see new investors try to get the very most money out of their flips by pricing<br />
them too high. Usually a flip costs more than they thought, it took longer<br />
than they thought and they are making less money than they thought. To<br />
make up for their miscalculations they overprice a property to make up for it.<br />
Pricing a property too high makes the situation even worse. It increases the<br />
carrying time, increases the costs and may cause a property to sell for less<br />
than if it was priced right to begin with. When a property is overpriced, it may<br />
stigmatize a property because it sits on the market for an extended period.<br />
When a property sits on the market for an extended period of time, people<br />
wonder what is wrong with it (even if the price is good after a couple of price<br />
changes). Most investors tend to see offers on their properties after 2-3<br />
weeks on the market if it is priced right. If there aren’t any offers in the first<br />
month, the price should be lowered immediately. The longer a property is<br />
held, the more money it costs and the less money is made. It’s best not to get<br />
too greedy when you go to sell! An overpriced property will not get the<br />
attention it deserves when it first goes out for sale.<br />
The first time a property is listed is when it’s on most people’s radars. If you<br />
are priced right, you should be getting interested buyers as soon as it gets<br />
listed. For a variety of reasons, you want your property to go under contract<br />
within a few weeks of getting listed. The obvious reason is that you want to<br />
sell and get your hard-earned profits. The second reason is that you don’t<br />
want it to sit on the market. The kiss of death for a fix and flip is your<br />
property getting stale. It’s hard to get attention from buyers once you’ve been<br />
on the market for a while, even if you drop your price. The problem is that<br />
savvy buyers will see that you have been out there for a while and that you’ve<br />
reduced your price at least once. You may get offers, but odds are, they will be<br />
well below asking. Price it right as soon as it hits the market and you’ll be<br />
well on your way to your next fix and flip property with more cash in the<br />
bank.<br />
52<br />
10 Costly Mistakes to Avoid as a New Real Estate Investor
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