{"id":68491,"date":"2019-09-04T15:26:06","date_gmt":"2019-09-04T20:26:06","guid":{"rendered":"https:\/\/www.zilculator.com\/blog\/?p=68491"},"modified":"2021-01-18T08:38:35","modified_gmt":"2021-01-18T13:38:35","slug":"7-surefire-ways-to-fail-as-a-real-estate-investor","status":"publish","type":"post","link":"https:\/\/www.zilculator.com\/blog\/7-surefire-ways-to-fail-as-a-real-estate-investor\/","title":{"rendered":"7 Surefire Ways To Fail As A Real Estate Investor"},"content":{"rendered":"\n<p>97 percent of real estate investors will fail. This is a sobering statistic that comes with any number of follow up questions. There are some who will look to debate these numbers but others have one simple question&#8230;.why?<\/p>\n\n\n\n<p>The answer is not as complicated as some might believe. Since the average business will fail, it is not hard to see why <a href=\"https:\/\/www.zilculator.com\/blog\/is-buying-real-estate-investment-in-the-beginning-of-a-recession-a-mistake\/\">real estate investments<\/a> often suffer the same fate. No one wants to end up as a casualty. That&#8217;s why this guide is here to help. These are the seven <a href=\"https:\/\/www.zilculator.com\/blog\/the-biggest-tenant-screening-mistake-and-what-it-will-cost-you\/\">real state mistakes<\/a> that are most commonly made. <\/p>\n\n\n\n<div id=\"toc_container\" class=\"toc_white no_bullets\"><p class=\"toc_title\">Contents<\/p><ul class=\"toc_list\"><li><a href=\"#1_No_Discernment_Between_Speculation_and_Investment\"><span class=\"toc_number toc_depth_1\">1<\/span> 1. No Discernment\nBetween Speculation and Investment <\/a><\/li><li><a href=\"#2_No_Discernment_About_The_Harsh_Truths_of_Risk_and_Return\"><span class=\"toc_number toc_depth_1\">2<\/span> 2. No Discernment\nAbout The Harsh Truths of Risk and Return<\/a><\/li><li><a href=\"#3_Failure_To_Understand_Investment_Cycles\"><span class=\"toc_number toc_depth_1\">3<\/span> 3. Failure To\nUnderstand Investment Cycles<\/a><\/li><li><a href=\"#4_Lack_of_Discernment_Between_Gurus_and_Teachers\"><span class=\"toc_number toc_depth_1\">4<\/span> 4. Lack of\nDiscernment Between Gurus and Teachers<\/a><\/li><li><a href=\"#5_Confusing_Knowledge_With_Action\"><span class=\"toc_number toc_depth_1\">5<\/span> 5. Confusing\nKnowledge With Action <\/a><\/li><li><a href=\"#6_Inability_To_Say_8220No8221\"><span class=\"toc_number toc_depth_1\">6<\/span> 6. Inability To\nSay &#8220;No&#8221;<\/a><\/li><li><a href=\"#7_Attempting_To_Build_Wealth_Too_Quickly\"><span class=\"toc_number toc_depth_1\">7<\/span> 7. Attempting To\nBuild Wealth Too Quickly<\/a><\/li><li><a href=\"#In_Summation\"><span class=\"toc_number toc_depth_1\">8<\/span> In Summation<\/a><\/li><\/ul><\/div>\n<h2><span id=\"1_No_Discernment_Between_Speculation_and_Investment\">1. No Discernment\nBetween Speculation and Investment <\/span><\/h2>\n\n\n\n<p>There is a major difference between investment and speculation. Investment takes place when the principal is safe. Speculation occurs when the principal is unsafe. Speculation is great but a <a href=\"https:\/\/www.zilculator.com\/blog\/6-unexpected-costs-multifamily-investors-should-be-aware-of\/\">real estate investor <\/a>must be sure to preserve some of their available capital. Otherwise, they are placing themselves in a precarious position.<\/p>\n\n\n\n<p>Consistent speculation is the equivalent of playing double or nothing repeatedly. Sure, it may work a few times in the short term but the investor will eventually land on nothing. Investment should not be this exciting. Those who want a thrill ride should head to Six Flags instead.<\/p>\n\n\n\n<p><strong>Related: <a href=\"https:\/\/www.zilculator.com\/blog\/how-to-make-100000-a-year-with-rentals\/\">How To Make $100,000 A Year With Rentals<\/a><\/strong><\/p>\n\n\n\n<h2><span id=\"2_No_Discernment_About_The_Harsh_Truths_of_Risk_and_Return\">2. No Discernment\nAbout The Harsh Truths of Risk and Return<\/span><\/h2>\n\n\n\n<p>The real estate\ninvestor tends to be an optimistic sort. Lower risks lead to lower returns,\nwhile higher risks lead to higher returns. This is easy enough to understand,\nof course. However, there is one key amendment that must be made before an\ninvestor can truly get started.<\/p>\n\n\n\n<p>A higher risk\ndoes not always lead to a higher immediate return. By taking on more risk, the\ninvestor is merely increasing their return&#8217;s potential. They are also leaving\nthemselves open to greater losses. Don&#8217;t be blinded by optimism.<\/p>\n\n\n\n<h2><span id=\"3_Failure_To_Understand_Investment_Cycles\">3. Failure To\nUnderstand Investment Cycles<\/span><\/h2>\n\n\n\n<p>Confirmation bias\ncan cause any number of issues, especially when the real estate investor is not\nwilling to take an honest look at the investment cycles. Many investors will\nfind a method that works for them and ride it until the wheels fall off, so to\nspeak.<\/p>\n\n\n\n<p>They allow\nthemselves to believe that the statistics that apply to these cycles do not\naffect them. Don&#8217;t make the mistake of only looking at the statistics that\nsupport the status quo. Stay ahead of the curve at all times. <\/p>\n<!-- WP QUADS Content Ad Plugin v. 2.0.17 -->\n<div class=\"quads-location quads-ad2\" id=\"quads-ad2\" style=\"float:none;margin:0px;\">\n\n <!-- WP QUADS - Quick AdSense Reloaded v.2.0.17 Content AdSense async --> \n\n\n<script type=\"text\/javascript\" >\nvar quads_screen_width = document.body.clientWidth;\nif ( quads_screen_width >= 1140 ) {document.write('<ins class=\"adsbygoogle\" style=\"display:inline-block;width:550px;height:90px;\" data-ad-client=\"pub-3164542121802998\" data-ad-slot=\"4497930067\" ><\/ins>');\r\n            (adsbygoogle = window.adsbygoogle || []).push({});\r\n            }if ( quads_screen_width >= 1024  && quads_screen_width < 1140 ) {document.write('<ins class=\"adsbygoogle\" style=\"display:inline-block;width:550px;height:90px;\" data-ad-client=\"pub-3164542121802998\" data-ad-slot=\"4497930067\" ><\/ins>');\r\n            (adsbygoogle = window.adsbygoogle || []).push({});\r\n            }if ( quads_screen_width >= 768  && quads_screen_width < 1024 ) {document.write('<ins class=\"adsbygoogle\" style=\"display:inline-block;width:550px;height:90px;\" data-ad-client=\"pub-3164542121802998\" data-ad-slot=\"4497930067\" ><\/ins>');\r\n            (adsbygoogle = window.adsbygoogle || []).push({});\r\n            }if ( quads_screen_width < 768 ) {document.write('<ins class=\"adsbygoogle\" style=\"display:inline-block;width:550px;height:90px;\" data-ad-client=\"pub-3164542121802998\" data-ad-slot=\"4497930067\" ><\/ins>');\r\n            (adsbygoogle = window.adsbygoogle || []).push({});\r\n            }\n<\/script>\n\n <!-- end WP QUADS --> \n\n\n<\/div>\n\n\n\n\n<h2><span id=\"4_Lack_of_Discernment_Between_Gurus_and_Teachers\">4. Lack of\nDiscernment Between Gurus and Teachers<\/span><\/h2>\n\n\n\n<p>Wealth gurus have\na way of making their clients feel like they are moments away from becoming\nrich beyond their wildest dreams. If these &#8220;gurus&#8221; are showing off\npictures of their Bentley and their mansion, this is a sign that the investor\nshould look elsewhere for assistance.<\/p>\n\n\n\n<p>A true teacher is never going to sell their clients this sort of fantasy. They believe in offering investors the chance to <a href=\"https:\/\/www.zilculator.com\/\">formulate a realistic strategy<\/a>. Anyone who is asking the investor to provide them with capital is not someone who should be trusted for any reason. <\/p>\n\n\n\n<p><strong>Related: <a href=\"https:\/\/www.zilculator.com\/blog\/6-tips-for-cutting-real-investment-costs\/\">6 Tips For Cutting Real Investment Costs<\/a><\/strong><\/p>\n\n\n\n<h2><span id=\"5_Confusing_Knowledge_With_Action\">5. Confusing\nKnowledge With Action <\/span><\/h2>\n\n\n\n<p>Sometimes, a <a href=\"https:\/\/www.zilculator.com\/blog\/real-estate-analysis-how-smart-investors-do-it\/\">real estate<\/a> investor will learn about a new truth and start to feel as if they have it all figured out. They are not actually applying the lessons they learn but they have convinced themselves that they are. This is a mistake that is made on an all too regular basis. <\/p>\n\n\n\n<p>Knowledge and\nactions have to align with one another. The investor that spends all of their\ntime acquiring knowledge and refusing to act on it is an investor that is never\ngoing to reach their full potential.<\/p>\n\n\n\n<h2><span id=\"6_Inability_To_Say_8220No8221\">6. Inability To\nSay &#8220;No&#8221;<\/span><\/h2>\n\n\n\n<p>This one should\nbe fairly self explanatory. An investor who is always saying &#8220;yes&#8221; is\nplacing themselves in a precarious position. Eventually, the bubble is going to\nburst and the real estate investor will be left with nothing.<\/p>\n\n\n\n<h2><span id=\"7_Attempting_To_Build_Wealth_Too_Quickly\">7. Attempting To\nBuild Wealth Too Quickly<\/span><\/h2>\n\n\n\n<p>Wealth that is\nbuilt quickly is bound to vanish just as quickly. On the other hand, wealth\nthat is accrued slowly over the course of time will have far more staying\npower. The top investors are well aware of this principle.<\/p>\n\n\n\n<p>Enduring the monotony of continued smaller success may seem like a good problem to have. Conversely, there are a wide range of investors who always looking for the &#8220;big score&#8221;. The road to <a href=\"https:\/\/www.zilculator.com\/blog\/the-secret-to-real-estate-success-keep-it-simple\/\">investment success<\/a> can be boring but this means that all is well. <\/p>\n\n\n\n<h2><span id=\"In_Summation\">In Summation<\/span><\/h2>\n\n\n\n<p>Real estate\ninvestment can be challenging but success is within the grasp of anyone who\ntakes the time to study successes and failures. The more the investor is\nwilling to learn, the more likely they are to avoid the usual pitfalls. \n","protected":false},"excerpt":{"rendered":"<p>97 percent of real estate investors will fail. This is a sobering statistic that comes with any number of follow up questions. There are some who will look to debate&#8230;<\/p>\n","protected":false},"author":3,"featured_media":68716,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[199],"tags":[204,205],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v15.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>7 Surefire Ways To Fail As A Real Estate Investor | Zilculator: Real Estate Investment Analysis blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.zilculator.com\/blog\/7-surefire-ways-to-fail-as-a-real-estate-investor\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"7 Surefire Ways To Fail As A Real Estate Investor | Zilculator: Real Estate Investment Analysis blog\" \/>\n<meta property=\"og:description\" content=\"97 percent of real estate investors will fail. 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