Bill Bronchick

9 Mistakes New Real Estate Investors Make
by Bill Bronchick

Newbie Investing Mistakes1. Not Knowing the Market Numbers

Knowing your market is as important as any other factor in real estate investing. This means having a neighborhood by neighborhood analysis of the supply curve and average days on market. Both of these data formulas can be found through the assitance of a real estate broker using the MLS.

2. Mistaken Value

Most new investors use Zillow, e-appraisal, or Trulia (or even worse, an average of the three) for determining the value of a property. This is fatal – learn to do a "comparable sales" analysis.

Get your own data, too. Relying on the listing broker to give you comps for properties is like asking the barber, "How’s the haircut?". Learn to find your own comps using public data websites like

3. Underestimating Repairs

If you have no experience in rehabbing homes, then you shouldn't be estimating repairs yourself. Get at least 3 difference contractors to give you bids. Get these bids in writing, with detailed breakdowns of labor and materials.

4. Poor Choice of Contractor

A bad contract won't have a license, will bill you by the hour, and/or won't work by a written contract drawn by you. A good contractor agreement is essential, have a local attorney draw one up for you. Make sure you get signed lien releases every time you write a check.

5. Bad Contract

Most real estate courses have crappy contracts because they are not written by attorneys. My advice is to learn your local Realtor form and draw up a few addendums. An attorney can help you with this.

6. Wrong Legal Entity

Most investors form an LLC for their investing practices. Is this right? Maybe, maybe not. There any many tax issues involved in choosing an entity that should be review with a tax professional, NOT just an attorney (unless the attorney in question has tax knowledge, like me!).

7. No Marketing Plan

Most investors hire a real estate agent to find them deals and that's it. There's not enough good deals on the MLS to make a living on so you need a better plan to market to FSBOs, foreclosures, estates, divorces, and other sources of motivated sellers.

8. No Script

OK, so got a motivated seller on the phone and now what? Uh, uh, uh – what questions do you ask? Have a written script you keep by the phone so you always know what to say.

9. No Business Plan

If you fail to plan, you plan to fail. You've heard that before, but how many investors actually write a business plan? The truth is very few. Take some time to write a good, detailed business plan that you can follow as your goal.

That's 9, but I can think of at least 100 more. Don't make mistakes, get a mentor on your team to guide you through the process.

Bill Bronchick
William Bronchick, CEO of Legalwiz Publications, is a Nationally-known attorney, author, entrepreneur and speaker. Mr. Bronchick has been practicing law and real estate since 1990, having been involved in over 600 transactions. He has appeared as a guest on numerous radio and television talk shows including CNBC Power Lunch. He has been featured in Who's Who in American Business, Money Magazine, the Los Angeles Times and the Denver Business Journal. William Bronchick has served as President of the Colorado Association of Real Estate Investors since 1996.

Bill Bronchick Products (9)
CoursesHow to Create a Bulletproof Corporation
CoursesHow to Create Your Own LLC and Family Limited Partnership
CoursesStep by Step Guide to Land Trusts
CoursesUltimate Guide to Buy and Hold
CoursesUltimate Guide to Fix and Flip
CoursesUltimate Guide to Owner Financing
CoursesUltimate Guide to Wholesaling
SpecialsWealth Protection Library
CoursesWealth Protection Strategies

Copyright Notice
Copyright 2002-2018 All Rights Reserved. Published with Permission of Author. No part of this publication may be copied or reprinted
without the express written permission of the Author and/or

Back to Top

Free Newsletter

Article Options
Printer Friendly Page
Send This to Friend

Author's Articles
10 Easy Tips for Finding Investment Properties
10 Inexpensive Ways to Spruce Up Your Rental or Rehab Property
60 Days To Your First Bargain Purchase
7 Real Estate Contract Buyer Clauses Checklist
7 Reasons to Use a Land Trust
7 Ways To Buy Foreclosure Property
9 Goal Setting Tips For Real Estate Investors
9 Mistakes New Real Estate Investors Make
A Review of the National Consumer Law Center
All About Property Disclosures
Apartment Investing - Investors Now Is the Perfect Time!
Are Real Estate Seminars Worth the Money?
Are You a Newbie at a Real Estate Club?
Are You Clear On What is a Good Deal
Are You Waiting on the Sidelines?
Bankruptcy, Foreclosure, & Credit - How it Affects You
Bankruptcy, Foreclosure, & Credit - Part II
Basics of the Real Estate Contract
Be a Smart Investor... Do the Math
Big Brother Is Watching You, New (Bad) Legislation Coming Your Way
Bubble, Schmubble - Flipping Works in Any Market
Bull vs. Bubble
Bulletproof Your Wealth with Family Limited Partnerships and LLC's
Buy A House - Get Thrown in Jail?
Buying at the Foreclosure Auction
Collecting Money Owed by a Tenant
Common Investor Legal Mistakes
Common Sense Mortgage Tips
Contents of a Good Short Sale Package
Contract for Deed
Create Monthly Cash Flow Without Any of Your Own Money or Credit
Dealing with Real Estate Agents
Dealing with the Dealer Issue
Dealing With the Due on Sale Clause - Part II
Do You Need a License to Flip Real Estate?
Equity Sharing & Partnerships
Essential Contract Clauses
Essential Contract Clauses II
Explaining Foreclosure Options to the Homeowner
Five Big Mistakes Newbies Make
Flipping Properties for Cash Profit
Flipping Versus Holding - Which is Better?
Get That Property Out of Your Name!
Getting Started as a Real Estate Entrepreneur
How Much Cash Should an Investor Keep in Reserve?
How to Create a Real Estate Cash Cow
How to Determine Property Values in Today's Market
How to Get a Hard Money Loan
How to Save Up to 90% on Title Insurance
HUD Properties, FHA & Title Seasoning
Illegal Flipping and Lender Seasoning
Investing in a Changing Market
Investing Outside of Your Local Area
Investing Strategy - Master Lease Option for Apartments
Keep a Positive Perspective in a Negative Market
Know Your Real Estate Laws
Learn the Landlord-Tenant Rules!
Lease Option a Junker!
Lease Option Tips & Strategies
Lease/Option 101
Lease/Option vs. Contract for Deed
Lease/Options & the Equitable Interest
Mortgage Broker vs. Mortgage Banker
Non-Income Verification Loans
Owner Financing Mechanics
Personal Property Trusts
Real Estate Investing Financing 101
Real Estate Investing is Just Like Weight Loss
Reduce Taxes By Investing In Real Estate
Risks of Buying Real Estate in Emerging Markets Out of State
Scripting Common Objections from Foreclosure Sellers
Setting Your Financial Goals
Seven Ways to Flip a Property
Should the Government Bail Out People in Foreclosure?
Should You Disclose on Short Sale Flips?
Should You Do Real Estate Full-Time?
Should You Use an Attorney's Fee Clause?
Tax Issues on a Subject 2 Deal
Tax Lien Investing 101
Ten Myths Preventing People from Succeeding in Real Estate Investing
The Basics of “Short Sales”
The Bona Fide Purchaser
The Ethical Real Estate Investor
The Forgotten Owner Carry
The Mortgage Elimination
The New Limited Liability Company
The Not-So-Handy Man's Guide to Fixing and Flipping Properties
The Property Recording System
The Role of Insurance in Asset Protection Planning
The Wrong Way to Invest in Real Estate
There is No Due on Sale Jail
Top Ten Ways to Get Sued - Guaranteed!
Understanding Loan Terms
Understanding The Mortgage Loan Market
Using A Home Equity Line Of Credit To Buy Properties
Using a LLC IRA for Real Estate Investing
Using Facebook as a Real Estate Investor
Using Trusts for Personal & Business Privacy
What Every Landlord Should Know About Discrimination
What to Do if a Tenant Abandons the Property
What You Need to Ask Before Joining a Coaching Program
Where to Incorporate: The Answer May Surprise You!
You Have to Sell a House to Get it Sold
Zero In On Motivated Sellers

Author's Products

How to Create a Bulletproof Corporation

How to Create Your Own LLC and Family Limited Partnership

Step by Step Guide to Land Trusts

Ultimate Guide to Buy and Hold

Ultimate Guide to Fix and Flip

Ultimate Guide to Owner Financing

Ultimate Guide to Wholesaling

Wealth Protection Library

Wealth Protection Strategies