New to Note Buying or Real Estate Investing? 5 Points Enterprising Property Investors Should Mind

Real Estate Attorneywww.ProvenResource.com

NEW TO NOTE BUYING OR REAL ESTATE INVESTING?

http://www.provenresource.com/

The allure of real estate riches found in 'house flipping' and note buying is great and it's made even more appealing by reality TV Shows, relentless "get rich" infomercials, and so called "real estate gurus".

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A recent survey of real estate in the news this past month reveals a disheartening number of criminal

prosecutions concerning property investment scams.



The US Attorneys Office for Western Texas announced the federal sentencing of a group of house flipping

fraudsters after law enforcement professionals exposed a property appraisal scheme that involved

over 800 properties and $45 million dollars of fraudulent loans.



These news stories alone are enough to create significant pause for aspiring real estate investors looking to cash in on “rich” property deals since

the Great Financial Crisis of 2008. Vetting deals for potential fraud is but only the first thing that

investors need to do in their due diligence when buying property.


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Owning distressed properties often involves legal actions such as quiet title actions, evictions, and lawsuits from

former owners or even municipalities. Experienced property owners already know that legal actions aren't

always so straight forward.

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For instance, a “simple” eviction action can be delayed for months over a host of unforeseen reasons.

Investors need to have financial wherewithal in addition to a strong stomach for business.


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Investors need to assess their legal exposure. For instance, recording one’s property interest creates liability for not only property taxes, but also for compliance with municipal ordinances or even federal violations. In residential real estate, where “blight ordinances” are enforced, investors are accountable for maintaining a property to

community standards.

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Compliance does not just concern the property itself. Real estate businesses need to make sure their enterprise is licensed

properly for state regulators and for revenue agencies.

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Investors need to structure their deals with the ‘end game’ in mind. For example, real estate investors may offer ‘seller’ financing to prospective purchasers. A private financing

agreement should conform to generally accepted lending guidelines of the lending community.

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Proper document recordings, prudent loan servicing, and income and payment verification are just several points investors need

to evaluate when offering private financing.

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These days it is not uncommon for real estate investors to invest in distressed property markets outside the city or state in which they live. Many out of state or foreign

investors have come into the market, and fast.



But if one is not familiar with the area they invest in or they don't have physical access to the property themselves, then

they had better find reliable advisers who know the neighborhood, have access to trustworthy contractors and /

or property management companies, and knowledgeable real estate legal counsel.



The appeal of 'scoring' big money in flipping properties should be tempered with pragmatism. Many a 'gold rush' has gone 'bust' for lack of planning. Investing in real estate is no different. One bad transaction can create financial havoc.



Prudent real estate investors who perform proper due diligence, hire competent third party advisers and contractors, and develop a realistic exit strategy should have a higher propensity of success.



About the Author:


31800 Northwestern Hwy.Suite 350

Farmington Hills, MI 48334Phone: (888) 789-1715

Disclaimer: You should not rely or act upon the contents of this article without seeking advice from your own, qualified attorney.

http://www.proven-resource.com/

New to Note Buying or Real Estate Investing? 5 Points Enterprising Property Investors Should Mind

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