From the moment you became interested in real estate investing and picked up your first real estate education course or book you have no doubt been drilled with the message that you should not limit yourself to what most others consider realistic goals. This is true to a great extent and the size of your success in real estate investing definitely depends on your ability to think big and go beyond. However if you are not realistic about expenses and what people will reasonably pay for the homes you are flipping you could find yourself in real trouble.
Every successful venture needs a business plan no matter how big or small and this applies to real estate investing as much as any other industry even if you plan to do it all yourself. You must be realistic about all of the expenses involved no matter how small they are. In fact you will find that it pays off to over estimate your expenses. That way you will always have a cushion built in and when the expenses come in lower you will be pleasantly surprised at the extra profit you get to put in your pocket.
Another area where some that are newer to real estate investing fail to be realistic is when they are attempting to sell with owner financing whether it is via a lease option or rent-to-own. Many investors build a business model on anticipating being able to move many properties while pulling in 10,20 or even 30% in down payment on these properties. While that may be achievable in some cases most home buyers with poor credit that fall into the owner financing model don’t have that kind of cash to throw down on a home. Otherwise they could probably qualify for an FHA mortgage anyway. So do not limit your over all goals, but do be realistic when it comes to the details of your real estate investing businesses plan.