To be sure, there's a lot that can go wrong when you invest in real estate. You can overpay for a property, buy in the wrong area, use the wrong lender or loan product, or overestimate the rent you're likely to receive, just to name a few. The list of mistakes is far too long to discuss every possibility here. But here are three big mistakes first-time real estate investors should know about and take steps to avoid.

If you buy a rental property that brings in $2,000 in monthly rent, and your monthly mortgage payment including taxes and insurance is $1,500, it may seem like the property should produce $500 in monthly cash flow. But that's not likely to be the case.

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Source Fool.com