1) Listening To The Wrong Advice

Robert Kiyosaki said, “The most expensive advice in the world is free advice.” This is the advice you get from your inexperienced and uneducated family and friends. Many rookies who fail do not find the right mentors to help them – this is a critical mistake. Especially for a rookie real estate investor.

2) Never Taking Action

Many rookie real estate investors never get past the “Barnes and Noble Stage” if you get my drift here. These people will read countless books and listen to all the tapes on real estate investing, but never take the plunge and get into the game.

3) Wasting Your Spare Time

The majority of those who struggle have to have a job in order to support themselves. A job requires most of your time. We all have a certain amount of spare time – free from obligation.

Most rookies do not take advantage of this time and therefore suffer the consequences. Jim Rohn says we should plan on searching for new opportunity every week – make this a habit. How are you going to find new opportunity, if you’re not searching for it every week?

4) Not Having A Clear Purpose

In my opinion, 97% of people don’t write down their goals so I can safely say that even a smaller percentage have taken time out to define their purpose. If you don’t have a clearly defined purpose, how can the rookie actually know what’s important and what’s just standing in the way?

5) Not Having A Plan Of Action

This one is very simple. Anything of any relevant or importance must be written down and carried with you at all times. Make no excections to this rule.

6) Buying In The Wrong Neighborhood

Just because the price is cheap doesn’t make something a deal. If there is trash all over the street and in the front yards of houses in the neighborhood, step on the gas peddle and keep on truckin.’

7) Paying Too Much For A Property

Most pre foreclosure investing rookies fail to learn the basics of investing.Never pay more than 50% of the ARV (after repair value) of a property. Especially right now in today’s market.

Negotiating With An Unmotivated Seller

If there is not a compelling reason to sell the property – punt and move onto the next opportunity. Don’t make the mistake of trying to negotiate with someone who’s out to win. You will always lose.

9) Not Creating The Correct Legal Entity

I am not an attorney so please consult someone locally before attempting this. Whew! Happy to get that out of the way.

The best legal entity to hold investment real estate in is a limited liability company (LLC). These legal entities will keep you safe from any nasty lawsuits in the future. Most rookies make an “F” on this part of the test – and there are no make ups.

10) Not Having Adequate Funding

Regardless of your funding source, make sure you have access to capital when the need arises. If you’re renovation goes way over budget, you have to be able to finish the project, no matter the situation.

Take action now to have the cash on hand you need to cover those properties that go vacant for extended periods of time. Having the needed fuding in place is very important – this is one of the main reasons rookies fail to make it.

11) Not Having A Mentor Or Someone To Go To In A Pinch

Finding a mentor may take a while, but it’s well worth the investment of time and effort in order to find one. Look locally in your city or community. You can search the Internet and find it there too.

12) Not Learning The Fundamentals First

The fundamentals don’t change. You need to develop two skills sets, technical and entrepreneurial – you need to master both. Set up the real estate investment company the right way in the beginning and build a great team around you.

This one mistake alone could crush you. Don’t quit your job until your passive income is at least 30% more than your living expenses every month. Build up six months of expenses in cash just in case of an emergency.