Common Southern California Real Estate Investment Mistakes

House Mistakes

Real estate investments can be among the most complex investment decisions, but they also provide some of the most promising returns as well. Naturally, there is always a lot of interest in real estate from both new and seasoned investors. The key to making it a success is following best practices and avoiding common Southern California real estate investment mistakes. Here are a few…

Assuming that Every Property Will Be Profitable

Not every property will be a good investment,… plain and simple. It is important that you select investment opportunities carefully. If the numbers do not work out, don’t force it. Home buyers often get desperate in their search for a home due to their timelines and the fast moving market. As investors, you have the luxury of being selective.

Not Performing a Thorough Analysis of a Property

Every property is unique and complex. Aesthetics are only one piece of the puzzle. It’s important to be thorough in reviewing different aspects of a property. Failing to do so is one of the most common Southern California real estate investment mistakes.

  • Zoning
  • Conformance to Building Codes
  • Previous Permitted (or Unpermitted) Work
  • Neighborhood Features
  • Marketability Factors
  • Additional Liens
  • Past Pest Issues
  • Condition of Major Systems
  • Signs of Latent Defects

Sellers may not always be aware of or forthcoming with information, so having the ability to track down this information on your own is critical. Failure to complete proper due diligence will lead you to overpay for a property, which will undoubtedly impact your bottom line.

Underestimating Renovation Costs

Renovation costs can span such a large range depending on the type and extent of a project. Beyond what you expect to complete, there is always the added complexity of unexpected issues along the way. Underestimating renovation costs is one of the most common Southern California real estate investment mistakes that you can make. Unfortunately, there’s no foolproof approach. It comes down to experience. If you personally do not have a good knowledge base, it would be wise to obtain assistance from someone who does!

Not Hiring Professionals

A common misconception is that doing everything on your own will save money. Although this may apply to some types of renovation work, it certainly does not apply to all. Some things are done better and/or more quickly by experts. Hiring the right contractors can save you valuable time and prevent costly mistakes.

More Thoughts on Common Southern California Real Estate Investment Mistakes

The most valuable asset that you have when investing in real estate is experience. It is through making mistakes that we learn how to invest better in the future. That learning curve can be a bit painful (and expensive) though. Many investors are eliminating that learning curve by partnering with local experts. At Homes, Inc., we utilize vertically integrated capabilities, employ a diverse and experienced team, and leverage our resources to deliver anticipated results for our investors. Learn more about why you should partner with Homes, Inc.