#1 Most Common Mistake New Real Estate Investors Make

The #1 Most Common Mistake New Real Estate Investors Make is Buying and Selling Real Estate at the Wrong Real Estate Cycle.

Many newbie real estate investors bought their first home when the market was high and most likely paid a premium on their property. This usually occurs and is quite commonplace because they get caught up in the hype. And when emotions are high and there is a real estate frenzy about town to "BUY REAL ESTATE!", intelligence is LOW.

Our "thrill" phase (see Real Estate Emotions graph) is best characterized 2005/2006 when Vancouver's Pre-Sale condos were selling out in less than an hour and when the line-ups for these homes were a mile long! However, after they've paid the price on their "investment" property, they realized "Oops! What have I done?! I paid WAY too much!" and now their properties (if they did not liquidate them already) are now negatively cashflowing.

Understanding the real estate cycles is really KEY to not making those junior mistakes. You must OBSERVE what is going on in the city of your choice (whether it be Vancouver, Phoenix, Las Vegas:
Is there active construction?
Is the city currently experiencing over supply?
Are rents coming down?
Are property values plummeting?
Are development projects being halted? (like in Vancouver)
What are the emotions of the people/of the headlines?

Knowing the answers to these questions will help you gage where we are on the real estate cycle. And from there, you can make your buying and decisions with more accuracy and better timing!