1. Lack of proper due diligence prior to investing. This can include not doing your homework on the property itself (e.g., checking zoning regulations, studying market trends, etc.), as well as the financial stability of the investment partner or company.
2. Taking on too much debt in order to finance the investment. When interest rates are high and/or there is a slow down in the housing market, it can be difficult to make money on a property—even if it's rented out at full price.
3. Poor management and/or oversight of the property.