Most real estate investors are legitimate professionals who engage in ethical behavior. However, in today’s market there are many circling like vultures waiting to find their next meal. They sit on the sidelines, scouring court records and newspapers for foreclosure notices. Then they swoop into action and offer to save the day by purchasing a distraught homeowner’s house for pennies on the dollar.
Con artist real estate investors will invade your email with unsolicited offers promising real estate riches. Others will send you glossy brochures and free tickets to investing seminars or entice you through late-night infomercials. They promise to teach you the secrets of success and show you how to purchase properties with nothing more than your signature.
There are legitimate investors who can help you stop foreclosure or purchase your home through a short sale. There are also investors who can teach you the secrets of the real estate game. The difference is, you seek them out. They don’t mail literature to your home or call you on the phone to solicit your business.
The best way to avoid con artist real estate investors is to conduct thorough research. The Internet is a great place to start, as well as the Better Business Bureau. It’s relatively easy to determine if an individual or organization is a scam by typing in their name at your favorite search engine. If someone has encountered a scam artist, it’s a safe bet they have posted it somewhere online.
Nearly everything you need to know about investing in real estate, selling distressed property or learning how to stop foreclosure can be located for free. There are thousands of websites and articles written by real estate experts who liberally share their knowledge.
One of the biggest real estate scams stems from the lucrative lure of investing in foreclosure properties. Con artists claim you can pick up these properties for half of their value. This is rarely, if ever, the case.
Truth be known, foreclosure homes can be quite complex. They oftentimes have creditor and tax liens attached to them. In some cases, homeowners refuse to leave the premises and investors must engage in eviction action. Needless to say, things can get ugly quite quickly.
This is not to say foreclosures can’t be a profitable venture. If you’re fortunate enough to locate decent foreclosure homes that require little repair and do not have attached liens, you can turn a lofty profit.
If a company charges large sums of money to help you locate foreclosure properties, chances are it’s a scam. You can locate foreclosure homes for free by visiting your local County Recorder’s Office. This information is public record and available to anyone. Search for Notice of Default (NOD), Notice of Sale or Lis Pendens.
Foreclosure properties can also be located online. There are several reputable companies who provide lists of distressed homes across the nation. Most offer a free trial, then charge a nominal monthly fee.
Real estate owned properties are offered by many banks and frequently posted on their websites. Look through your local phone directory and compile a list of banks in your area. Then use your favorite search engine to locate their website. Generally, you’ll find a link on the home page directing you to a list of REO properties available.
A better option is to purchase REO properties from private investors who specialize in purchasing bank portfolios. These investors buy in bulk and can obtain properties at wholesale prices. It’s not uncommon to purchase real estate owned properties for 30- to 40-percent under market value.
Before buying or selling property through real estate investors, engage in due diligence to ensure you are working with a trusted professional. The old saying of “if it sounds too good to be true, it probably is” holds true today. However, there are many trustworthy real estate investors who can offer you the deal of the century and help you achieve your financial goals. All that is required is that you take time to ensure the person you are dealing with holds the appropriate credentials and a solid track record.