Common Mistakes New Investors Make (and How to Avoid Them)

Foreclosure investing can be profitable — but it’s also full of landmines.

We’ve seen hundreds of deals go sideways because of basic mistakes. This guide will show you what to watch for, so you can protect your money and stay in the game long-term.

❌ Mistake #1: Bidding Without a Budget

Too many new investors fall in love with a deal and forget the numbers. They bid emotionally or round up in their head.

Fix it:

• Use our Max Bid Calculator
• Set your walkaway number before the sale

❌ Mistake #2: Ignoring Title & Liens

Winning the bid doesn’t mean you own a clean house. Many new buyers inherit tax debt, water bills, or worse — demolition orders.

Fix it:

• Review our Title, Liens & Hidden Risks guide
• Let our team run a title and lien check before you bid

❌ Mistake #3: Underestimating Repairs

Everyone thinks they can “do it for cheap.” But costs add up fast — especially for major systems like HVAC, roof, or plumbing.

Fix it:

• Use our Repair Cost Estimator
• Plan for buffer and holding costs

❌ Mistake #4: Forgetting Holding Costs

Even if a property sits empty, you’re paying taxes, insurance, utilities, and interest.

Fix it:

• Read Holding Costs Explained
• Add 3–6 months of burn into your profit model

❌ Mistake #5: Overpaying for Comps

Some new investors use the highest recent sale as their ARV — even if it’s bigger, newer, or in a better location.

Fix it:

• Use our ARV Estimator
• Learn how to spot solid comps in our Comps Guide

❌ Mistake #6: No Exit Strategy

Are you flipping or renting? Holding short or long term? Investors who don’t define the exit up front often waste time and money.

Fix it:

• Use the Deal Analyzer Wizard to run both flip and rental numbers
• Read our Flip vs Rent guide

✅ Final Advice

Smart investors use math, not emotion. They plan exits, protect against risk, and use tools like the ones we provide.

Our mission is to help you avoid mistakes and buy with confidence.

Want a second set of eyes on your deal? Contact our team and we’ll help you walk it through step by step.