The Worst Real Estate Strategy Top Investors Avoid

I've watched $3.2 million in real estate portfolio value disappear in just 6 months, and another $800,000 vanish in a single flip. In the last three years alone, I've witnessed 72 house flippers go bankrupt, 238 rental investors lose their properties, and 419 wholesalers quit after losing their savings.

Pretty scary, right? But after analyzing 1,324 failed investors, I discovered something that could save you from the same fate. A silver lining where I’ve seen 286 investors have their best runs ever by doing exactly the opposite of what failed investors did.

There’s one real estate strategy in particular that top investors know to avoid like the plague. And yet, beginner investors keep falling for it. What is it?

The Reality Behind Real Estate Investment Failures

You might think successful property investing comes down to being smart or working hard enough. But that's not it at all. The biggest reason investors fail? 

They pick the wrong strategy for their situation. 

Think about it - would you try flipping houses with only $30,000 saved up when you really need $100,000 to handle surprises and holding costs? 

Real estate strategies are like shoes - one size definitely doesn't fit all. I've seen people jump into rental properties hoping for quick cash flow when they actually need to retire in five years. That's like expecting a marathon runner to win a sprint!

The truth is, there are countless ways to make money in real estate: wholesaling real estate, Buy and Hold, creative financing, the BRRRR method, lease options - you name it. But here's the secret: you only need ONE that fits you perfectly.

Four Critical Questions That Prevent Disaster

Before you adopt any real estate strategy, ask yourself these four questions:

1. What are your financial resources? If you're sitting on capital, maybe Buy and Hold or BRRRR is your game. If you're tight on cash, wholesaling might be smarter. 

2. What's your risk tolerance? Are you comfortable with big risks for big rewards, or do you prefer steady, predictable growth?

3. What are your investment goals? Quick profits or long-term wealth?

4. How much time can you commit? Some strategies need more attention than others.

Your strategy needs to align with your natural strengths. If you're great with people, maybe your path is through networking and relationship building. If you're analytical, perhaps your edge is in market analysis and finding undervalued properties. The key is to work with your strengths, not against them.

The Right Way to Grow Your Real Estate Portfolio

Watching beginner investors fall for what real estate gurus push without considering their own situation breaks my heart. It's like following a GPS without checking if you have enough gas for the journey!

Take Raheem, one of my clients. He almost faced how to avoid bankruptcy after following a random Instagram ad that led him to the BRRRR method. Nobody told him about the time suck with contractors, permits, and bank hoops he'd have to jump through.

Here's another trap I see people fall into - ignoring market trends and laws. Imagine building an Airbnb portfolio where short-term rentals are about to be banned, or buying in a flood zone without understanding insurance costs. That's like building a sandcastle at high tide!

But it goes deeper than that. You need to understand:

• Employment trends in your target area

• Local development plans

• Changes in neighborhood demographics

• Upcoming regulatory changes

• Insurance requirement shifts

• New FEMA regulations that could affect your properties

Each of these factors can make or break your investment, and they're all constantly changing. You can't just research once and be done - this is an ongoing process.

The Backup Plan You Can't Skip

Listen, I've seen too many investors put all their eggs in one basket. No backup plan means no safety net. It's crucial to have:

• Capital reserves for unexpected expenses

• Multiple financing options when interest rates spike

• Diverse marketing channels for finding deals

• Alternative exit strategies for every property

• Relationships with multiple contractors

• A network of other investors for support and opportunities

Think of it this way - every successful business has contingency plans. Real estate investing is no different. Your backup plan isn't just about protecting your downside - it's about creating opportunities even when things don't go as planned.

The most successful investors don’t just “dabble” in real estate—they treat it like a business.

That means:

✔ Having a clear investment strategy
✔ Keeping your money moving
✔ Using the right legal structures

Speaking of legal structures, if you don’t have an LLC yet, now’s the time. A proper business setup protects your assets and makes scaling easier. You can set up your LLC for free today.

Finding Your Perfect Strategy

Real estate tips are a dime a dozen, but here's what matters: aligning your strategy with who you are. That's how you create true passive income and escape the worst real estate strategy we just talked about.. Take it from someone who's seen both spectacular failures and incredible successes.

If you are set to dig deeper into real estate investing, why not get hands-on advice from someone who’s been there?

Remember JT? He was forcing himself to cold call because some real estate coach told him to. He hated every second of it! Once we switched to relationship-based lead generation that matched his personality, his business took off.

I offer a unique experience where you can spend a day with me—on the golf course. We’ll talk real estate strategies, personal finance, investing secrets, and whatever else will help you move forward. Check it out here.