8 Classic Mistakes that Real Estate Investors Make

May 14, 2018

A failed investment is, mostly, the result of a mistake – and mistakes, especially in the world of investments, can be very expensive. In retrospect, we can always identify the mistake. However, it is cheaper and more beneficial to identify and avoid making mistakes before they happen.

Completely avoiding mistakes is unattainable. Yet, knowing what could be the major mistakes that investors may make is a great way to minimize their probability of happening.

It is important to be aware of those classic mistakes. It is even more important to have the ability to methodically strategize potential mistakes and where they could happen. Doing so in advance will help to avoid making them.

In the following section, we will go through the 8 most common mistakes that real estate investors make. Identifying them and knowing how to handle them can make a small, yet significant difference between a catastrophe and a “bonanza.” Practically, as part of the investment strategy, it is highly recommended to incorporate this thinking process, where one goes through this list of potential mistakes with respect to each investment.

  1. Flexible planning

One of the most common mistakes among real estate investors is lack of planning. Often, they buy a property and only then, they figure out how to make it profitable. Ideally, it should be the other way around; one should plan his or her investment strategy and then look for an investment opportunity. Finding your investment strategy only after you have invested in a property is a recipe for losing money. You start with a plan and end with execution, and not the other way around.

  1. Transaction is not a business

Another common mistake among real estate investors, beginners and veterans alike, is rooted in the belief that investing is a commercial activity. These investors tend to go after one investment at a time, rather than maintaining a pipeline of opportunities and purchase offers. Operating this way is simply making some transaction and not “running a business.” Investing is not trading, though it is very easy to confuse the two. Investing requires the relevant mindset that is based on building a vast portfolio of properties, learning the market, and making offers for a variety of properties. Investing through a wide portfolio allows neutralizing marginal investments and elevating the attractive investments.

  1. Making a hit

Unlike stories about real estate gurus who make a hit and live to tell about their experiences, making a profit from real estate investing is far more professional, complicated and demanding. Real estate investing is a long-term process that can make a growing profit throughout time. But it is also a process that requires patience, tolerance and rational behavior based on a built-in investing strategy.

  1. The Loan Rider

The volume of knowledge, both macro and micro, that real estate investors are facing is vast. Individual investors who choose to conduct their investments as loan riders tend to make more mistakes during the decision-making process. This may be because they pay less attention or lack the ability to analyze the situation more effectively.  Forming a team of professionals around an investor is a key success factor for investing. At the very least, investors should set up a good and regularly maintained relationship with a real estate agent, an appraiser, an engineer, a lawyer and a financing body. A real estate analyst is always an important, if not critical, addition.

  1. ‘This looks good’

“This looks good,” “The property looks good,” and “the price looks good,” etc. are classic mistakes that reflect a lack of strategy and built-in methodology for investments’ due-diligence. Yet, the gap between “this looks good” and “it is good” is called a loss. Closing this gap is through setting a built-in investing strategy, a comprehensive due-diligence process, a professional value estimation / appraisal, and a thorough methodology for deals’ assessments. You should not make an investing decision before you make sure that the deal looks good on the inside and not just from the outside.

  1. Impulsive decisions

Making decision impulsively is probably the No.1 mistake that investors make. Impulsive decisions are decisions that are being made based on one’s mood or temporary personal state. These decisions are also based on partial information that is tapping into emotional weaknesses. Sometimes, everything may seem optimistic, and in other times, things may seem less rosy. New information that comes our way and /or a professional’s opinion can build or shake our confidence.  Here too, the solution goes through a built-in investing strategy, and discipline is following it.

  1. Cash flow or something from Economics 101?

In order to be a successful real estate investor, one needs to possess a complete set of abilities and traits beyond the world of finance and numbers. Having said that, you cannot enter the world of real estate without knowing what cash flow is, its importance, and how it affects your investment portfolio. Mortgage payments, taxes, insurance, advertisement costs, and management costs, etc., are expenses that all need to be taken into consideration and calculated as part of the investment decision process. The cost of the property is important and the potential profit is important. However, negative cash flow that is not being taken into consideration can lead to the collapse of the investment entirely.

  1. On the brink of a cliff

Another common mistake when planning an investment is failing to take into consideration potential overhead expenses. To be on the safe side, a rule of thumb says that one should calculate all profits and losses and then double the potential losses, adding them to the calculation. In reality, such a generic rule can turn many investments unprofitable. Walking on the brink of a cliff may put you at risk, but standing far from the cliff may waste your time and also prevent you from seeing the view. The right attitude to deal with this issue is the Modular Scenarios Method, which allows you to work with manipulations and calculations different from the profits and losses model (e.g., giving some risk factors to several calculation lines), so that a margin of security that is real is created.


iintoo’s mode of operation is based on deep knowledge of and vast experience with the most professional aspects of the investment world, particularly real estate investment. iintoo’s Analysis and Business Development Departments are working with a set of built-in processes with the purpose of minimizing and even neutralizing the probabilities that these mistakes will occur. iintoo’s due-diligence process is composed of strict guidelines and a built-in, thorough and deep analysis method that is backed up by advanced and professional tools. These tools include:

  • An updated real estate database used as an information source for the markets in which iintoo operates.
  • Analysis programs for analyzing information and scenarios.
  • A strictly guided due-diligence process.
  • The due-diligence process that our entrepreneurs go through is crossed checked with Meridian Capital for additional risk mitigation and is brought before our investment committee prior to a project for raise.

Would you like to hear more about iintoo? Join us today!

Explore our recent investment offerings

  • open

Chestnut Heights Townhomes – Olathe, KS

  • Olathe, KS

  • Multifamily

  • Equity

  • Min Investment


  • Duration

    18-36 Months

Join iintoo's Community

We’ve made it easy to connect with fellow investors so you can enjoy a wealth of real estate investment experience. Join our family today to share, learn, and invest with the best minds in the industry.

Start Now

*When we refer to “Equity Protection” we are referring to an arrangement where iintoo epiic GP LLC, the general partner of each covered issuer (“Covered Issuer”), promises that, even in the event the underlying project is not profitable or records a loss, the investor in the Covered Issuer shall receive a specified amount equal to the original principal investment he/she/it provided (less other amounts already received by such individual investor during the course of the investment) subject, however, to significant limitations including but not limited to repayments for losses in the Covered Issuer are only made up to a maximum amount of funds available from the retention account and the policy (where such policy limit may be less than the total amount invested), repayments are on a first come, first serve basis, and losses are aggregated across Covered Issuers subject to the same retention account and policy. iintoo epiic GP LLC, and not investors, is a party to the policy with Everest Insurance®. As a result, investors have no direct legal rights under the policy. In addition, beyond use of the Equity Protection proceeds from the retention account and the policy, neither iintoo epiic GP LLC nor the Covered Issuer has any obligations to indemnify investors for losses. For more information, please see “Business of the Company—Equity Protection” and “Risk Factors—Risks related to the Equity Protection” in any of our issuers’ private placement memoranda.

The above may contain forward-looking statements. Actual results and trends in the future may differ materially from those suggested or implied by any forward-looking statements in the above depending on a variety of factors. All written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the previous statements. Except for any obligations to disclose information as required by applicable laws, we undertake no obligation to update any information contained above or to publicly release the results of any revisions to any statements that may be made to reflect events or circumstances that occur, or that we become aware of, after the date of the publishing of the above.

Private placements of securities accessible through the iintoo™ social network real-estate investment platform (the “Platform”) are intended for accredited investors. Such private placements of securities have not been registered under applicable securities laws, are restricted and not publicly traded, may be subject to holding period requirements, and are intended for investors who do not need a liquid investment. These investments are not bank deposits (and thus are not insured by the FDIC or by any other federal governmental agency), are not guaranteed by and iintoo Investments Ltd. (“iintoo”) or any third party working on our behalf, and may lose value. Neither the Securities and Exchange Commission nor any federal or state securities commission or regulatory authority has recommended or approved any investment or the accuracy or completeness of any of the information or materials provided by or through the Platform. Investors must be able to afford the loss of their entire investment.

Equity securities are offered through Dalmore Group LLC. (“Dalmore”), a registered broker-dealer and member of FINRA/SIPC. Any real estate investment accessible though the Platform involves substantial risks. Any financial projections or projected returns are projections only, and iintoo makes no representations or warranties as to the accuracy of such information and accepts no liability therefor whatsoever.

Investors should always conduct their own due diligence, not rely on the financial assumptions or estimates displayed herein, and should always consult with a reputable financial advisor, attorney, accountant, and any other professional that can help them to understand and assess the risks associated with any investment opportunity. Any investment involves substantial risks. Major risks, including related to the Equity Protection and/or the potential loss of some or all principal, are disclosed in the private placement memorandum for each applicable investment.

Neither iintoo nor its affiliates nor Dalmore Group LLC makes investment recommendations nor do they provide investment advisory services, and no communication, including herein or through the Platform or in any other medium should be construed as such.

iintoo, its employees and affiliates are not insurers or insurance brokers, and do not offer insurance services, advice or information to new or existing investors.
Insurance is provided to Iintoo epiic GP LLC (and placed through Cobbs Allen, a licensed insurance intermediary) by Everest Insurance®, subject to all of the terms and conditions of the applicable insurance policy, to support iintoo’s equity protection undertaking as further specified and described in the confidential offering materials of iintoo. Everest Insurance® is not a sponsor or promoter of any offering described herein.

The Terms of Use regulating your use of the Platform can be found at: https://www.iintoo.com/terms-of-use/
The Platform’s Privacy Policy can be found at: https://www.iintoo.com/privacy-policy/
By accessing this site and any pages thereof, you agree to be bound by our Terms of Use and Privacy Policy.

About Everest®
Everest Re Group, Ltd. is a Bermuda holding company that operates through the following subsidiaries: Everest Reinsurance Company provides reinsurance to property and casualty insurers in both the U.S. and international markets. Everest Reinsurance (Bermuda), Ltd., including through its branch in the United Kingdom, provides reinsurance and insurance to worldwide property and casualty markets and reinsurance to life insurers. Everest Reinsurance Company (Ireland), provides reinsurance to non-life insurers in Europe. Everest Insurance® refers to the primary insurance operations of Everest Re Group, Ltd., and its affiliated companies which offer property, casualty and specialty lines insurance on both an admitted and non-admitted basis in the U.S. and internationally. The Company also operates within the Lloyd’s insurance market through Syndicate 2786. In addition, through Mt. Logan Re, Ltd., the Company manages segregated accounts, capitalized by the Company and third party investors that provide reinsurance for property catastrophe risks. Additional information on Everest Re Group companies can be found at the Group’s web site at www.everestre.com

© 2020 iintoo Investments Ltd. All Rights Reserved.