Jumping head first into real estate investing isn’t for the faint hearted.
But my job is to prepare you for all the ups and downs you’re going to experience so you can reach that goal of being financially free.
While there are many detrimental property mistakes I could list off, there’s a single mistake all beginners make which ends up costing them thousands of dollars.
And I’m going to show you exactly how to avoid this mistake so you can prosper in the highly profitable world of real estate investing.
When I think back to the very first real estate investment I made, I can see exactly where I went wrong.
I fell into all the beginner traps that tend to ruin real estate investing for most people.
After I battled through my first few deals, I started to make a list of all the ways I could’ve done certain things differently.
Each time I made this list, there was a single mistake early on in the deals that kept reaching the top of my list.
I quickly changed my ways and worked up to a million-dollar deal that you’ll find in One Deal to Freedom.
Those mistakes haunt me from time to time, and I really wish I would’ve caught them earlier.
But, as you know, it all worked out very nicely for me in the end.
After speaking to many real estate investors, I noticed they’ve all made the same mistakes.
That’s why I want to tell you about this mistake so you can avoid it completely and get a head start on what could turn you into a millionaire.
The mistake I’m talking about has to do with the down payment.
Most people save as much as they can only to put a 5%-20% down payment down on their first investments.
The obvious downside to this is that your monthly payments are going to be a lot higher, but there’s a very specific reason why this could ruin your investment career before it’s even taken off.
The bigger down payment you put down means the larger your equity is in your home.
If you pay a 5% down payment, you immediately own 5% of your home. If you pay a 20% down payment, then you own 20% of your home.
Seems like simple stuff. But what would really kill you on a small down payment is the prospect of another real estate crash.
If you only own 5% of your home when a crash occurs, your 5% could become basically worthless, and your interest rate (if not fixed) will shoot through the roof. Not to mention that you’ll end up paying more than your home is worth.
If you own 20% of your home, there’s less of a chunk to pay off, and your equity will remain intact as the value of your home sinks.
This single real estate mistake could mean the make or break of your real estate investing career.
I hope you make the wise decision, and invest as much as you can into your property.