Five Huge Mistakes I’ve Made Investing In Real Estate

by Brandon · 7 comments

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I once asked Seth Godin (marketing genius and internet blogger) via email what he would change if he could go back and do it again.  His response:

If I went back and changed something,

then things would be different and I wouldn’t be me.

But I like being me. So I’ll take this life

He makes a valid point. If we were to go back, it would change who we are. However, what about if we could help someone else learn from our mistakes?

People don’t like to dwell on mistakes.  Our pride likes to say “I’m awesome” but the reality is we make mistakes all the time.  While I’m sure it will hurt my image as an “expert,”  I am going to talk about the mistakes I’ve made because I want to save others from making the same ones. This article is designed to help you learn from those mistakes and hopefully avoid them yourself! Without further ado, my five biggest mistakes I’ve had in my investment career:

  1. Not Saving Enough – I have been lucky, but stupid. When I started investing in real estate, I had no money. I bought my first property with close to nothing down and was fortunate enough to sell it and made a decent profit. While I am completely in support of investing with no money down, I believe any investor needs to have at least some money in savings because the road to real estate riches is a bumpy one.
  2. Using Credit Cards – Building off number one, because I didn’t have solid financial resources, I often turned to credit cards to finance various things. I wish I had never used them.  When I first started, I bought into the “credit cards are a tool” mentality, which caused me to quickly max out several cards during rehabs. This is fine when the market is great and the proceeds from the flip can pay off the card, but when the market turned and I turned those rehabs into rentals, the credit cards didn’t get fully paid off. I have spent the past four years tackling them now.  As Dave Ramsey likes to say, debt is slavery.
  3. Renting To Family – I’d heard it said a thousand times but still fell into this trap. Do not rent to family. Ever.  I’m sure you can think of many reasons that this could turn out bad – and they are all true. As a landlord, you will always be seen as a “greedy” S.O.B. by your tenants, so it is best not to have one of those tenants be in your family.
  4. Renting to Friends- Similar to number four above, renting to friends is a mistake. I have rented to friends and it has turned out great, but the few times it has turned out bad it turned out REAL bad.  It simply isn’t worth it.
  5. Not Learning From A Mentor – Most of my mistakes could have been solved by simply listening to someone who had been there before. If I could go back, I’d have joined my local real estate investment club immediately, followed around the good investors until they were sick of me, worked for free on a flipping crew to see how it was done, and become a real estate expert before ever spending a dollar on investments.

That said, I know that if I were to go back and change things, I would not be where I am today and I like where I am. However, I believe strongly in the importance of learning from mistakes as to avoid future ones and help others avoid the same.

Are there things you wish you had known? What would you change if you could go back? What can you teach others from your mistakes?

About Brandon

has written 199 Awesome posts in this blog.

Brandon Turner (G+) is the Senior Editor and Community Director and owner of He is also an Active Real Estate Investor (Flips, Apartments, and Buy-and-Hold), Entrepreneur, World Traveler, Third-Person Speaker, and Husband. Come hang out with him on Twitter!

P.S. looking for hard money loans in California? Be sure to check out my friends over at They have very competitive rates, can fund within a week and specialize in fix and flip loans and other hard money loans.

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{ 7 comments… read them below or add one }

Mungo May 22, 2012 at 4:25 am

Great tips! One thing I would add is a too much spotlight on amount instead of quality investments. A lot of new investors think about getting a bunch of rental property under their belt and wind up buying junk. They don’t realize a handful of quality rental properties in good locations are much better than 20 rental properties that are dumped and in bad locations. I’ve seen some new investors lose a lot of money this way. They buy cheap thinking they can make more money off of a bunch of cheap properties.


Brandon May 22, 2012 at 4:51 am

So very true! Higher quality rentals mean higher quality tenants. Not that we need to rent out mansions in Beverly Hills – but investing in rough neighborhoods with high crime is just asking for trouble. I love rentals in middle class neighborhoods. They typically rent high, to stable tenants, and often times the tenant may even buy the home. Unless your goal is to be a lifelong miserable landlord, I agree – quality over quantity. Thanks for stopping by!


Lance@MoneyLife&More May 23, 2012 at 2:26 am

Thanks for the warnings. I’ll keep these in mind when I eventually decide to rent out my current townhouse or when I’m looking into getting a rental property again 🙂


The Buy and Hold Guys June 1, 2012 at 4:34 pm


I think I would add 1.5 more points.

#5.5 – Invest in your self. This is similar to point number 5, but goes a little deeper. Get educated – read, attend seminars, talk to other investors and take time to reflect on each transaction.

6. Build systems in your business – don’t do it all yourself. Unfortunately, I know this one all too well.

nice work!!



Brandon June 1, 2012 at 9:27 pm

Great additions. Both are HUGE in my life. Thanks AG! 😉


Affordable residential properties Gurgaon November 22, 2012 at 7:42 am

Superb tips.


Jason Yesser July 4, 2014 at 5:18 pm

I’ve experienced 1,3,4, and 5 and they are not fun. I use property management now and it is such a beautiful thing. Your post was awesome so keep it up! Thanks 🙂


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