Hi, it’s Peter Aquart from American Wealth Builders
Do you want to lose money, get stressed out, maybe even burnout, and probably never take a vacation again?
Sounds great, right?
LOL, I’m joking of course – that actually sounds horrible.
Unfortunately, this is happening to “real estate investors” all over the US right now.
I use “real estate investors” in quotation marks because may would call them that but I wouldn’t.
In fact, if you invest in real estate like these people, you’re not just doing it wrong… you’re doing the most expensive and time-consuming way possible.
I’m talking about landlords.
Folks to buy a property, put a tenant in it, and then manage the property themselves.
Here are 5 huge mistakes that they make, which can really hurt them:
Mistake #1. They don’t necessarily know how to acquire a property, so they often don’t get the best deals in the right neighborhoods.
In my experience, many landlords don’t know how to acquire a property. Sure, you might gain that experience after several costly mistakes but initially, nearly every landlord starts out wrong.
Often, they base their decisions around a property they can afford (especially if they plan to pay cash or have a large down payment to make). They’ll soon discover that they may (or may not) have bought in a good rental neighborhood. Or, they might learn that there’s a reason why the houses are so cheap there – because no one wants to live there.
Mistake #2. They’re often limited by geography.
This is related to the first mistake but perhaps even worse because landlords who plan to buy, fix, rent, and manage a property themselves are forced to do so within a reasonable geographic area. In other words, they are probably limited to a property that they can drive to – something in the same neighborhood or town.
But again, is that the best place for a rental property or is only thought to be the best place because the landlord sees it as a convenient driving distance?
The reality is: landlord convenience is often a greater deciding factor than whether or not the property is in a good area for tenants.
Mistake #3. They put in a lot of effort up-front to get a property ready to rent… but this is a mistake.
Acquiring a property and then fixing it up to get it ready to rent… very few landlord realize how big of a job this is. Many landlords start by combing through the market listings, perhaps with a real estate agent. Then later, the slightly savvier ones might work with a wholesaler or someone who has off-market deals.
But FINDING the property is the first step. Then you have to negotiate with the seller, handle the complexities of payment, and deal with a lawyer. And once all that is done, THEN the real work begins of cleaning and fixing the property to get it ready to for a tenant.
… and believe me, if you’ve ever tried to rehab a house (even one in fairly good condition) it’s ALWAYS more work and more money and more time than you think it will take.
By this point, if you’re the landlord in this scenario, the property is JUST getting ready to be rented and you’re already weeks (probably months) into this house with thousands of dollars (perhaps even more) sunk into it.
And that’s a BEST CASE SCENARIO.
(Trust me when I tell you that I hear about many, many, many worst case scenarios.)
Mistake #4. They give up their time, energy, and even money to manage the property. And it’s usually more than they think it is.
Once the property is fixed up and rented, then the landlord is ready to start collecting those checks. But it’s not always smooth sailing. Maybe the tenant has to work late on the day the rent is due so the landlord needs to make a trip back to the house to get the check when the tenant is home. Or maybe the tenant calls at 3 in the morning because the toilet is overflowing… the landlord needs to get in the car and get over the house FAST before permanent damage is done.
Have you ever heard of a landlord who took a vacation? It rarely happens. (Who looks after the house while they’re gone?)
Mistake #5. They reach a limit of what they can do – essentially just getting a second job.
This one really depresses me, as someone who loves scaling and systems: Some landlords who struggle on their first rental property think that the secret is maybe getting a second and third property. They find out pretty quick that they’ve basically taken on a second full-time job managing these properties. By about property #3 and #4, your time is stretched pretty thin. Problem is, 3 or even 4 properties isn’t usually enough money to quit your job.
For these reasons, we’re focused on turnkey real estate investing here at American Wealth Builders. We believe landlording is just a second job (and a tough one at that) and we’d much rather see people get freedom in their lives instead of taking on a second job.
With turnkey real estate, you can get a property that is already cleaned, rented, and managed… which means you save all the time and money on the front-end, you start seeing a return immediately, and the property is hands off.
And, because we’ve done this day-in and day-out for years, we know which markets are really solid rental markets and which ones should be avoided, and we’ve built up teams of contractors and property managers to help us.
That means: we help investors find cash flowing properties in the best markets, not in the ones that are necessarily closest to them (and might not be the best for rentals)… which also gives us the advantage of buying more affordably and sending in our expert contractors and property managers.
Landlording versus real estate investing – it’s a night-and-day difference. If you’re thinking about acquiring properties for cash flow, skip the second job and get in touch with our team to see how a turnkey cash flow property will help you reach your goals without the cost and effort of landlording.
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