Mistakes First-Time Investors Make (And How to Avoid Them)
Investing in real estate can be life-changing—but only if you do it right. I learned this firsthand when I bought my first investment property at 26 years old while still serving in the Army. It wasn’t just any property—it was a fourplex with a mortgage of $1,100/month that grossed $2,600 in rent.
Sounds like a great deal, right? It was—but I still made mistakes. Because while the numbers worked in my favor, I didn’t fully understand what I was doing. That lack of knowledge cost me in ways I could have avoided. Now, I want to help you avoid those same pitfalls.
1. Not Running the Numbers Beyond Cash Flow
I lucked out with my fourplex—it cash-flowed well. But I didn’t account for vacancies, maintenance, and unexpected costs. When those expenses popped up, I realized I hadn’t planned properly.
How to Avoid It:
Factor in vacancy rates, maintenance, and property management costs.
Run a detailed cash flow analysis—not just rent vs. mortgage.
Keep a reserve fund for unexpected expenses.
2. Thinking You Have to Do Everything Alone
I didn’t know what I didn’t know—so I tried to figure it all out myself. That led to unnecessary stress, mistakes, and missed opportunities.
How to Avoid It:
Build a team: realtors, lenders, contractors, property managers.
Join a real estate investing group to learn from others.
Don’t be afraid to ask for help or guidance—it’ll save you money in the long run.
3. Underestimating Property Management Needs
Managing a fourplex wasn’t as simple as I thought. From handling tenants to maintenance calls, I quickly learned that self-managing is a job in itself.
How to Avoid It:
Decide early if you’ll self-manage or hire a property manager.
Set clear expectations and boundaries with tenants.
Create systems for handling repairs, rent collection, and communication.
4. Not Having a Long-Term Strategy
I jumped in knowing I wanted to invest, but I didn’t have a clear plan beyond that. Was I holding long-term? Would I eventually sell? Reinvest profits? I hadn’t thought that far ahead.
How to Avoid It:
Set clear goals: Buy & hold? Flip? House hack?
Have an exit strategy in case your plans change.
Think beyond the first deal—what’s the next step?
5. Thinking Real Estate is Passive Income Right Away
Owning a fourplex that cash-flowed over $1,500/month sounded like easy money—until I realized that managing tenants, handling repairs, and dealing with unexpected expenses made it far from passive.
How to Avoid It:
Treat investing like a business, not a side hustle.
Plan for the time and effort it takes to manage real estate.
Consider hiring a property manager if you don’t want to be hands-on.
Final Thoughts
I made a lot of mistakes as a first-time investor, but I also got a lot right. My first property set me up for success, even though I didn’t fully understand what I was doing at the time.
If you’re thinking about getting into real estate, my advice is don’t go in blind. Learn from those who’ve been there, and set yourself up for success from the start.
💡 Are you thinking about investing? Have you already started? Drop a comment below—I’d love to hear your journey!
Looking for an Investment Property? I Can Help!
As a licensed REALTOR®, I help first-time and seasoned investors find the right properties to grow their portfolio. Whether you're looking for a cash-flowing rental, a house hack opportunity, or your first flip, I’d love to guide you through the process.
