Lessons most real estate investors learn the hard way

Investing in real estate can be one of the most exhilarating things an investor does. There is a thrill that comes with finding a good deal, improving a home and, making a killing off of the sale. Most real estate investors don’t start out that way, however. In fact, many, if not most, real estate investors will tell you that they have made many mistakes and lost quite a bit of money as well. They will also tell you it was worth it because of the lessons learned that could be utilized later down the line.

Here are a few mistakes real estate investors typically make in the beginning. Avoiding them can save a lot of heartache.

Hard money

Hard money loans can be an incredible tool. If you have not heard of hard money loans, they are quick loans that are based on the value of the asset (the home, or piece of real estate) instead of the person getting the loan. This means someone with bad credit good get a hard money loan, as long as it is a good deal and the house is worth a lot more, or has a lot of potential.

Hard money loans are usually less than a year, and are just used to snag a quick deal, maybe fix things up, then sell or convert to a regular loan. They have incredibly high interest rates – often as high as fifteen percent.

Because of the high interest rates, investors usually hold hard money loans for as little time as possible. If a mistake is made and they end up holding the loan significantly longer than expected, the interest expenses can rack up and put them in a miserable place. If they hold past the original time of the loan, things can get really ugly.

Simply put, if you are going to use a hard money lender, be careful, have exit strategies and backup exit strategies to be sure you are not stuck holding the bag.


Most good investors are able to use signals and see when the signs point to selling and when they point to buying. If you are able to recognize these signals then you are able to capitalize much quicker and make money much faster.


If you think you are getting a good deal on a piece of property then it is time to be careful. There is often a reason a piece of property is priced the way it is. While good deals do exist, bad deals disguised as good deals also exist.

Research the neighborhood, the history of the home, the future of the area, rental prices, the real estate market as a whole, and everything else you can think of. If everything checks out, you can feel confident in the deal you are getting.

Understand expenses

Your mortgage will absolutely not be your only expense. There will be random expense all along the way. Try to have an emergency fund for when something big comes up. New investors are often surprised to realize how much some home repairs can cost. One recommendation that some investors will give is a home warranty. A home warranty is a warranty that gives you the ability to insure almost everything in your home that can break. From water heaters, stoves, microwaves, refrigerators, and more. While these are not killer expenses if broken, it may be a good idea to have a warranty in place until you have a large enough savings that you can replace and repair these items yourself.

This list is not comprehensive in the least. New real estate investors make mistakes every day. It will happen no matter how big the list. Find a mentor who has done what you are looking to do. Get advice and confirm your first few deals with them. Someday you may be that very mentor.

4 Tips for Buying a Home If You’re Disabled

Finding the right home is hard, especially for individuals who have special needs. It’s not an impossible process, but it is best to keep a few tips in mind to make sure that it goes as smoothly as possible.

Know Your Needs

The most important part of the process is knowing exactly what sort of housing you need to accommodate your disability. The more information you can provide to the real estate agent, the more likely they are to find something appropriate. There are times when finding an appropriate home on the market will be impossible, so it can also be prudent to meet with contractors so you can determine which houses can be renovated to meet your needs. According to Disability.gov, most renovations for this purpose only cost between $150 and $2000 dollars, so you should remain open to the idea of altering an existing home.

Take Your Time, But Act


Finding a home can be a long and frustrating process, but it’s important not to rush things. Buying a home is a big decision, and it’s important not to forget any details that could make it hard to live with your disability in your new home.

On the other hand, it’s also important to act once you find something that does meet your needs. Nothing is more frustrating than finding your perfect home and losing it because somebody else bought it before you made up your mind. Take all the time that you need to make sure the home is appropriate, but be sure to act once you are positive that it is.

Look For Support

It may seem impossible to get your own home, but there’s plenty of support out there that can make the process easier. Many government programs, such as those offered by state governments and the federal Department of Housing and Development, offer financial support for disabled people who want to buy a home. Private groups, such as Habitat for Humanity, can also help build or fund a home. These groups usually work very closely with disabled individuals, so they know how to build a home that can meet any special requirements. Those organizations can take more than a year to go from applying to closing on a home, so it’s best to apply as soon as possible if you think they can help you.

Know Your Rights


Disabled individuals face a lot of challenges when it comes to finding a home that meets their needs, so they shouldn’t need to deal with discrimination for landlords or real estate agents. Fortunately, the Fair Housing Act offers protection against that type of discrimination. Discrimination is relatively common in spite of that protection, so it’s important to know your rights before you hunt for a home.

In this case, discrimination includes advertising a home in a way that indicates a preference for people who are not disabled, refusing to sell or rend to a disabled person, or interfering with their ability to exercise their housing rights. They are also forbidden from offering different terms to disabled individuals than they would to anybody else. Disabled individuals are also entitled to make reasonable modifications to their home to accommodate their disability.

In the event of a violation, individuals are entitled to file a complaint to the United States Department of Housing and Development, which will attempt to resolve it. The HUD will start by attempting to reconcile the two parties, but if that fails the matter will go to court. The court can order the landlord to pay compensation to the wronged party, so it’s important for people to know their rights and be willing to fight for them. If you aren’t sure if you have a case, consider consulting an injury lawyer or other legal expert who has experience dealing with cases that involve disabilities.