Today, we're going over the top eight mistakes that you need to avoid as a real estate investor. And I've got my co-host, Brian DeVilla with me. We have done over a thousand deals combined between the two of us. And we've all made many mistakes more than eight. But these are our top eight. We just kind of went over together. You excited? I'm really excited to share this. Top mistake number one that people make being over leveraged. What does that mean to you?

Well, if you're flipping houses, what that means is you bought too many properties and you did an

account for how much money was going to be leaving your bank account. And what a lot of investors do

is let's say they'll borrow money for house a and then they'll go

buy a house b and then they start commingling the funds maybe like house a went over budget and they

use the leverage from house b to offset house a and then before know it, they're like swimming in debt and they don't have enough money to pay back investors or to finish your projects. And that's happened to me. I've seen, I don't want to say hundreds, but I've seen that happen to a lot of real estate investors. Yep. So then they don't have enough for House B. So they go buy House C. Yep. And it steals from House C. Yeah. And it just, you're hoping House A sells. And then if House A doesn't sell for what you want, then it just starts spiling out of control. Yeah. I'll say for me, I didn't realize I had been over leveraged because I had had a lot of leverage for years. I mean, you know, from 2018 to

2022 for five years straight, I always had 50 plus flips going at any moment. And, you know, at the end,

it was about $20 million of debt. So the leverage would have been $20 million. Wow. And the

monthly payment on that was $200,000. Oh my gosh. Yeah. Dang. That's a lot. I've never been that high. I know. I would know. So, you know, you talk about paying that every single month, whether the house sells or not. You got to have enough cash to be able to pay that. Wow. Plus, you know, you're bringing up the point about, okay, this project went over budget. So, okay, it went over budget 30,000, or even, let's just say, $10,000, like a smaller amount.

You do you do $10,000 over budget on 50 projects.

That's $500,000 that you're, you need the money on.

So no matter if it's 50 deals or five deals, like the result is the

same for that person. If five deals went 10K over budget, that's $50,000, which is a lot for the

person who has five deals. So, yeah, I think a lot of people get over leveraged for two reasons.

One is they just get so gun and ho on scale and buy more deals, so they just keep adding.

And then two, they don't properly account for how much money each deal is going to take.

Yeah, so I think in 20, I think this was 2020.

I had a goal, actually it was 2019, I think, 2019 or 2020. I had a goal to flip 50 houses

that year, right? So I was like, I want to flip 50 houses this year. January hits. I was like,

okay, if I want to flip 50 houses, the math ended up being I needed to buy eight every single

month because obviously like the houses

that I buy in November and December and some of October wouldn't close that year.

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