Starting in the real estate industry isn’t an easy endeavor as they make it out to be on the TV shows. Equipping yourself with the right information that you can use to learn and move up from a novice in the industry sooner or later speaking from experience. You can have the best books, forums, e-books, and advice from the seasoned real estate experts, but you cannot gauge your success until you apply it in the real situation.
If it is just your first time to make a wholesaling deal, it is helpful to know what are the common mistakes to avoid potholes and pitfalls.
Here are the mistakes I made in my first wholesaling deal:
Miscalculated the Rehabilitation Cost
It is a nightmare knowing that you have miscalculated the rehab costs of the real estate property that you are offering whether to buy yourself or assign to an end buyer. This is one of the major mistakes I did when I was just starting. I learned the importance of checking the renovation cost. It is best to check the things thoroughly that need to be renovated sooner rather than later if in distressed condition like the roofing, AC, flooring, carpeting system, and other fixtures.
To lower risk of miscalculating, it is best to have a contractor that will accompany you to the property. They can help you understand what needs to be done to make sure that you’ll have a successful deal. All of the imperfections or fixture that needs to be corrected or replaced can be calculated with the help of the contractor. Always remember to check everything before you present it to the buyer. During my initial walk-through on that first deal I made error and did not factor in mechanical replacement costs, which was brought up after I sent out deal to end buyers.
Not Able to Bringing on the Comparables
The failure to put much importance in explaining why they should acquire the property in the first place is not bringing on the comparables. What I did is I was not able to give the investor more reason to buy that property instead of seeing more reasons why they should not. I learned the significance of getting more information about the property before showing up to the investor. Believe me, I totally looked neophyte and inexperience with this mistake.
Unable to Understand the Purchase Agreement
Another mistake that can fully butcher my first wholesaling deal is I was not able not to fully understand the purchase agreement. This is one of the common mistakes that inexperienced real estate professional does. Not taking your time to understand the agreement can lead to serious misunderstandings and miscommunication that can lead to losing the deal, which I almost bombed my chance.
Finally, making a mistake is part of the process to succeed in this industry. You cannot learn how to drive a bike without getting those bruises. With the above-discussed mistakes that I committed, hopefully you can use this as a guide never to make the same mistake I did on my first wholesaling deal.
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