Anyone who invests in real estate is bound to make a mistake commercial real estate marketing. The popularity of commercial real estate has exploded in the last few years, and the media is full of war stories from new investors who are selling real estate and buying real estate, find themselves in deals with problems. In almost every case the cause is traceable to a lack of knowledge about a few simple precepts in real estate investment marketing that form the ground rules of successful commercial investments. These are the basic practices that when used correctly will eliminate the most common causes of a bad deal for your property investment.

Following are the 5 list of rookie mistakes:

1. Ignoring local market conditions when invest real estate.

Every market in US real estate marketing is different, and a deal technique or property type that is profitable in one market it does not mean the same holds true anywhere else. That means, the deal techniques should be different from the Arizona real estate marketing to Dallas real estate marketing, or Buckeye real estate marketing.

Analyzing the demographic trends of population growth, income, and employment in the local market will tell you where opportunity lies, or not. It will also show which property types are in demand, or oversupply. Those conditions will make or break your investment.


2. Inadequate property due diligence in luxury real estate investment.

The second level of due diligence is the property condition, including physical items such as building systems, environmental matters and structural components. Just as important are the intangible items, such as title, survey, and zoning and land-use regulations.

Knowledge of contract law, insurance, finance, accounting, and tax law is also critical to doing things right at the beginning to insure success at the end in this high-end real estate marketing.


3. Botching the math

This is not rocket science, but real estate investment is a numbers game. Value is dependent on net operating income'ross revenue minus operating expenses.

That's why it is so important to get the real operating numbers, not a projection of potential gross income and estimated expenses.

Confirm and verify every element of income and expense. Value the property based only on present income, not projected income you have to produce.

Your profit is dependent on net income. Net income is the net operating income minus debt service. If you've overestimated revenue, underestimated expense, or have too much debt service, your profit will suffer or turn into a loss.

4. Over-leverage while invest in real estate.

Borrowing too much money in this business is fatal. Highly leveraged deals do happen, but unless it's backed up by a solid plan with sufficient capital, it can be disastrous.

5. Failure to have multiple exit strategies in real estate investing.

Your plan should answer the questions of how the property will be managed; what improvements are needed and their cost; how much money might be made (or lost); how long it will take; how to get out if things go wrong; and how to access the profits when it goes right.

The answers will reveal a realistic plan to maximize value in the shortest possible time with the least possible downside. I rarely have less than three exit strategies, and usually a half dozen or more. I've learned that if I don't have a plan to get my money out of a deal, I will soon be out of money. Check Some Definitions of Real Estate Investment.