If you are looking for real estate to invest in, then you certainly want to read this blog. Make sure to stay away from the ten biggest red flags that you can encounter when searching for properties.
1) Demands a Deposit
When you have not seen the property yet, do not put down a deposit. Oftentimes, scammers will pull legitimate properties from legitimate sites and then take down the posting and disappear once they get your money.
2) Pressure to Act Immediately
Scammers will pressure you to put money down and act quickly. This is typical of scammers. Doing so can cost you money and legal fees to deal with them after the fact. Go at your own pace and make sure to consult trusted people about your purchase before moving forward.
3) Instructions to Not Consult Others
Speaking more on the topic consulting others, make sure to consult your lawyers and lenders before moving forward. Discussing all investments with trusted professionals before moving forward is vital to a successful purchase.
4) Upfront Fees
Before services are actually given, no fees are allowed to be made, according to the FTC’s Mortgage Assistance Relief Services Rule.
5) Extravagant Guarantees
When someone guarantees that they can expect to make a certain ROI in a certain amount of time and that this would work for anyone buying this property, it’s time to think about another property to invest in.
6) Lack of Documentation
Some scammers promise documents, such as titles and deeds, but they never show. Make sure to get all the documentation necessary to make this deal go through before taking any steps forward.
7) Location is in a Bad Neighborhood
Many factors play into buying a home, but location is the most important. You have probably heard the common phrase, “Location, location, location!” If the home is a great place in a poor or vandalized area, proceed with caution. Stay away from slummy or run down areas. You want to make sure a location has a great school system and economy, as well as an active local police enforcement to protect the citizens.
8) Businesses Are Closing
If you are looking to invest in an area that has businesses closing, beware. You want to invest in an area that has a great economy and demand for residents. If businesses are closing, it’s likely that people are moving out of the area to better locations.
9) Photographs Looked Altered
If you are looking at a property online and the photographs look altered, you may be making contact with a scam artist. People will alter photographs to make a property look better than it really is. Make sure to visit the property first hand before making any big decisions.
10) The Property Requires Too Much Maintenance
A property that requires a lot of maintenance or seems like it would need a lot of maintenance is not a good buy. You do not want your expenses to exceed your income from the property. One way to tell if a property is like this is to see how long it has been on the market. Make sure to do your research on properties to find out if they have been on the market for too long.
Do you think there are other red flags to watch out for? Tweet me @wdarrowfiedler, and we can talk about it!