Everybody seems to have an opinion on how to make millions in real estate.  You’ve heard the opinions and read the testimonials.

    “It’s easy!”

“Get rich while working at home in your pajamas!”

    “I did it and so can you!”

“Just six weeks ago, I was bankrupt.  Now I drive this fantastic exotic automobile and live on my very own private island in the Caribbean.  All of this with only an hour of work per week!”

Alright, maybe the claims aren’t always quite that ridiculous, but they’re usually pretty close.

While it is possible to make great money with real estate, it does take time and hard work.  The only overnight successes are likely those who are peddling their real estate informational products on the overnight infomercials.

If you want to make your fortune in real estate, go right ahead.  It can certainly be done with a good plan, persistence, and a little luck.  Make it happen.

But there are several surefire ways NOT to succeed.  Without further ado, here are the very best tips for losing both your pants and your money in real estate:

Buy Into a Bubble.

Contrary to what many of the real estate “experts” say, bubbles are indeed real.  In fact, many parts of the US are experiencing the overheated market first hand as we speak.

These markets have moved so high on shaky fundamentals that they were doomed to slow down and even turn backwards at some point.  Gradually, they’ll recover, but many of those who invested at the higher prices are either being forced to sell at a loss or hold on to their investment and wait for the recovery.

Ignore Your Common Sense.

If a deal seems too good to be true, it probably is.  A 600 square foot cracker box for $450,000?  Run away fast!  Real estate prices will reach out and touch the extremes, but you just don’t want to be the one caught on the wrong side of an extreme.

Also, if any other aspect a property deal leaves you with butterflies in your stomach, take heed to the feeling.  Something is probably wrong.  We often have better sense than we give ourselves credit for.

Partner With Your Buddy.

Partnership is probably the fastest and easiest possible way to ruin friendship.  Sharing investments might seem like a great idea at the time, but what happens when hard times hit – you know, that pesky Murphy’s Law?  What can go wrong will go wrong.

All of the sudden, you’re the one that’s carrying the bulk of the risk or the burden of work to be done.  Your partner wants to bail prematurely and you have no choice but to clean up the mess by yourself at your own loss.  Sorry to disappoint, but about 90% of all partnerships will fail.  When, not if.

Stay tuned for the next installment on how to lose your pants and your money in real estate.  Coming tomorrow!

Tags:bad real estate investments