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CRE Insights Blog

Top 3 Real Estate Investing Mistakes

In this Video Richard C. Wilson, founder of the Family Office Club, discusses the top three real estate investing mistakes and how you can avoid making them in your business. At our family office conferences, we often discuss the real estate industry and have many top real estate investors. Learn more at http://WilsonConferences.com Hello, it’s Richard Wilson. I’m coming to you from the balcony at my hotel here, at the East Side Marriott in downtown New York City, and we’re hosting downstairs a 200-person conference on real estate investing. A lot of real estate investors on stage, 30 of them today actually, and we had some multi-billion dollar family offices and real estate investors talking about the top three mistakes that they’ve made in real estate investing. Some of the things that keep on coming up, the top three most common ones that keep on coming up, were going into something at too high of a price, so overpaying for an asset. If you have too high of a cost basis, it’s pretty hard to work yourself out of that. Some investors disagreed and they had methods of doing so, but it was mentioned as a top mistake. Another mistake is just getting too emotionally attached to a deal. Just like in private equity, you might get excited about buying a trophy asset or you might get excited about getting a deal done. If you’ve done so much due diligence on it you just want it to close, but might not be the best deal. It might not be because it’s a trophy asset. It could just be because of the time already sunk into it, it could be because you have capital you’re supposed to have invested by now and you don’t want to miss the whole market so you just need to put it to work in something, or there could be pressure for some reason within your team to go after an asset that might not be the best for your family. The other most common mistake is just way over paying on fees. Paying brokerage fees, closing fees, financing fees, management fees, carry fees, performance fees, fund management fees in general. Yesterday, in our CIO conference, the idea of fee alpha, being able to work down and negotiate down fees was discussed, and today again it’s being discussed as something that’s really important for families. If they’re controlling a deal and putting most of the money to work in a deal, there should be very little fees and you have a lot of negotiation power and a lot of leverage there at the table. I hope you enjoyed hearing about some of these mistakes that real estate investors are making. I hope you can join us at one of our next conferences. To learn more about what we’re doing, please check out familyoffices.com or our conference business at wilsonconferences.com. Thank you.

About the author

Richard Wilson