Investing in real estate can be a great way to build wealth and achieve financial freedom, but it’s not without its challenges. Real estate mistakes are inevitable, especially for new investors. But the good news is they can often be avoided with a little preparation and the right mindset.
I’m a firm believer in sharing my wins, but also my challenges. Here, I’m going to share some real estate mistakes I’ve made as well as a few others that are common when you’re just starting out with real estate investing. I’ll also give you some real-world tips to help you steer clear of these mistakes so you can build a successful portfolio and avoid costly setbacks.
For a closer look at my own real estate mistakes and challenges, watch this video where I share the good, the bad, and the ugly of Michigan apartment investing: 16 Unit Multifamily Apartment: Learn From My Biggest Mistakes!
5 Common Real Estate Mistakes Every Investor Needs to Be Aware Of
1. Analysis Paralysis
Many new investors fall into the trap of overthinking every decision, analyzing countless deals without ever taking action. While research and due diligence are crucial, waiting for the “perfect deal” can lead to missed opportunities.
I’m a firm believer in this: “Imperfect action always beats standing still.”
When it comes to real estate investing, set clear criteria for what constitutes a good deal for you. Then, take action once you find a property that meets those standards. You’ll learn more by doing than by endlessly analyzing.
Related Video: How to Analyze a Multifamily Real Estate Deal
2. Chasing Every Deal
It’s tempting to pursue every property that comes your way, but not every real estate deal is worth your time. Many beginner investors overextend themselves by taking on too many projects or properties that don’t align with their goals.
I recommend developing a niche or focus area in your investing strategy—for me, that’s multifamily rental properties. Then, when you figure out what’s working, do more of it!
Related Video: My Advice for New Real Estate Investors in 2025
3. Ignoring the Numbers
Emotions can cloud judgment, leading investors to overpay for a property or underestimate costs. Failing to run the numbers, or letting emotions rule over the numbers, is one of the most costly and common real estate mistakes.
With real estate investing, know your numbers and your walk-away point. There will always be another deal!
4. Overestimating Your Abilities
Taking on projects that are too large or complex, especially without the right expertise, financial backing, or team, can lead to delays and financial losses.
Start with properties that match your current skill level, goals, and budget. As you grow, you’ll build a network of reliable contractors, agents, and mentors to support you as you take on larger projects.
5. Not Walking Away
Getting emotionally attached to a deal can lead to poor decisions. New investors sometimes convince themselves that they “need” a deal to work, even when the numbers don’t add up. As I’ve often said, “A need for anything gets in the way of everything.”
If a deal doesn’t meet your standards, walk away. The real estate market is full of opportunities—there’s no need to settle for less than a great deal!
When we bought our 16-unit apartment complex, I made this mistake myself. I really wanted the property and major reposition deals were difficult to find. Rather than listening to my gut and negotiating more, or simply walking away from the deal, I paid more for the property than I could have. And, I didn’t get as many concessions from the seller as I should have.
Remember: The strongest person in any negotiation is the one who’s willing to walk away.
Learn From My Real Estate Mistakes!
If there’s one thing I’ve learned with Michigan apartment investing, it’s this: Real estate investing is a journey filled with lessons and growth. Mistakes are part of the process, but by taking calculated risks and maintaining a disciplined approach, you can turn those mistakes into stepping stones toward success.
At the end of the day, your mindset and willingness to learn will determine your success as an investor.
So remember: Take action, know your numbers, and always be ready to walk away from a bad deal—because there’s always another opportunity just around the corner.
Ready to start investing in real estate? We are real estate investors for investors!
I created The Stephan Group Brokerage to help investors find, analyze, and negotiate great deals, as well as operate their real estate portfolio here in Metro-Detroit. If you are looking for an investment property, contact us today.
