This time of year I often see many new investors enter the jungle that is real estate investing. The most common explanation I get from these investors is that real estate investing is something they’ve always wanted to undertake and their resolution this year is to actually get started.

Now I want to state clearly that while I’m an advocate for anyone taking that first step and commend anyone who wants to improve his or her life through investing in real estate, it should be noted that many of these first timers are also last timers. In my experience, these ultra-enthusiastic investors start off with a bang then crash and burn with their investments, only to never try again. The truth is that these investors, who I’ve dubbed the “Resolution Investors”, really didn’t have a chance because they avoided the proven track record to success in real estate investing.

Below, I list the top three mistakes made by the resolution investors and how you can overcome them!!

1. Putting action before education.

The fact is that the first action a resolution investor should take is to dedicate themselves to education in the real estate game. Seminars, books, educational programs, and real estate blogs are offered through many channels, including the website listed below, and are absolutely needed to help transition from “Resolution Investor” to a “Real investor”.

The bottom line is–if you do not understand basic real estate terms like “short sale”, “wholesaling” and “wrap deal”, then you are at a serious disadvantage. Also if you don’t know how to negotiate with contractors, realtors, loan officers, sellers and even the government, then you are a statistic waiting to happen. However, I believe that the investors who make the mistakes noted above are still better than the investors who analyze and then analyze and then analyze without ever taking action. Mistakes will happen, that’s inevitable, but learn from them and that mistake becomes invaluable.

2. The first move is to a realtor.

Now let me make this clear–I love realtors! They are a vital part of our team. The realtors on our team are smart and some of the best marketers I have ever seen. Now with that said, I see so many resolution investors go to realtors to help find their first deal. The sad truth is that the realtor is not there to help find you a deal. Realtors are there to sell you a property, period. If that home is a good deal then so be it, if it is not then so be it. Their job is to sell you a home but it is your job to make sure it is a good deal, not the realtor. I talk to so many of these resolution investors and they say to me, “Brian my realtor told me it was a good deal, I should sue him”. When confronted with that statement I realize that the investor is still refusing to see the problem. The problem is their own mentality, not the realtor.

3. It’s just a hobby!

Let me be very clear here–Anything that concerns my money is not a hobby and should not be yours either. I remember one investor who invested with us on a rather large and complicated transaction. We had produced pages and pages of documents detailing the investment’s possible ups and downs. Our plans detailed all that could happen and what we would do about it. We had pages of past performance pro formas as well as projection pro formas. I was so proud of the detail and content of the work. I mean we had nailed the due diligence on this project 100%. So I walked into this investor’s home and laid the paperwork on the table. She picked it up, looked at the cover (which had the ATW logo on it) then said to me “What a nice logo. I’ll do it.” She never opened the package I had slaved over. It was obvious that this was a mere hobby to her and not a business. Fortunately for her sake, this transaction turned out well, but I know of countless others who have had very different outcomes. I advise anyone to never be so cavalier. This is a business that can make you very wealthy but if you take it lightly, it can ruin you financially.

My friends I wish you a Happy New Year. It will truly be one with great opportunities! May this be the year you become an investor–a real one not just one with a resolution.