The Most Common Investor Pitfalls

Avoid these common mistakes to greatly increase your chances of selling your new-renovated property before your competition.

If you are a real estate investor who is struggling to sell your newly renovated properties as quickly as you once did, there is a very good chance that you are falling into one of these common “pitfalls.” 

What defines a pitfall?  We describe a pitfall as a mistake or misstep made by an investor that will result in project results that deviate greatly from the mean.  In other words, pitfalls cause your property to take longer to sell than other comparable properties, prevent it from selling for its full value, or prevent the property from selling at all – regardless of how much you reduce the asking price.

Build has worked with over 150 real estate investors since 2008.  We have sold over 250 properties to real estate investors of all experience levels – many of whom sell their properties for top dollar in record time, while others struggle to get their first showing.  While there are hundreds (if not thousands) of factors that determine what a property will ultimately sell for on the open market, Build has identified the 3 most common mistakes that investors of all experience levels fall victim to. 

Pitfall #1: Outdated Kitchen or Bathroom Tile
Failing to update the kitchen or bathroom tile is, by far, the most common pitfall that real estate investors fall into.  Show us a house that has been sitting on the market for 6 months with no offers and we’ll show you a bathroom with baby-blue tile from the 1950’s.

Pitfall #2: Not Enough Kitchen Cabinets
Attempting to increase your profit margin by eliminating or cutting back on crucial areas of the budget is a recipe for disaster.  A common way that investors try to save money is by reducing the amount of cabinets that they install in the kitchen.  While this mistake is not as common as leaving outdated kitchen or bathroom tile, it is probably the most effective method of ensuring that your property will not sell.  Of all of the pitfalls, this is the absolute deal-breaker. 

The vast majority of buyers do not have the means or the ability to install additional kitchen cabinets.  Many investors will try to compromise on the lack of cabinets by letting buyers know that “we can install more if you decide to buy the property.”  A deal like this makes buyers think only one thing: “if this rehabber skimped on installing all of the kitchen cabinets, where else did he cut corners?”  This market is very competitive; do not put yourself at a disadvantage by installing fewer cabinets than your competition.

Pitfall #3: Not Including Appliances
The third most common mistake made by real estate investors is failing to include appliances when attempting to sell to first time home buyers.  Most first time home buyers struggle to come up with enough money for a down payment to buy the house.  Asking them to reach back into their pockets to purchase appliances will push most buyers to their absolute limit. 

PITFALL 3a:  Attempting to “upsell” first time home buyers. 
This is usually done by placing appliances in the house but then letting the buyers know that “by the way, those shiny new appliances that really complete the look of the kitchen aren’t actually included, but I’d be more than happy to throw them into the deal for an extra $3,000!”  Wow.  Really?  You’d do that for me?  Don’t bother, I’ll buy this other rehabbed house down the street that includes appliances for the same price. 

Are you stuck in a pitfall?  Find your way out by contacting a Build Associate today.