Image Credit: Marco Verch
The biggest mistake I see people make is jumping in before they know thier WHY. Why are you investing? Is it for cash flow, appreciation, tax benefits or legacy?
If cash flow, how much? If appreciation, how much cap gains? If tax benefits, which tax benefits real estate offers that help you the most and what assets do you find that in?
Just as Dr. Covey would say: Start with the end in mind.
You need to know your number(s).
How much income (monthly cash flow) or Cap gains (pile of $) are you looking to create?
What is the time frame you are giving yourself to do it in? Do you want out of the rat race in 5, 10 or 20 years?
What is your risk tolerance? Just as securities/mutual funds investing, there is a risk tolerance that you have in investing in real estate. Maybe you have a few hours, perhaps you tend to be conservative, perhaps because you are just starting to learn you need to be conservative, or maybe you have an abundance of wealth and making a costly mistake is ok cause you have plenty of cash to fall back on. In our class, we have a self-assessment tool.
How much time per day week can you give? Some real estate investments are labor-intensive some are not.
If there is a partner/spouse involved then you need to include their temperament as well. You need to be on the same page or get an agreement because money creates stress in a marriage.
Once you know those numbers, then taking the class reading the book or getting the coach to help you create it is easy.