7 Hidden Dangers For Real Estate Investors

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) December 4, 2009 -- Seminar junkies. You’ve seen them and maybe you are one of them. All around you, you see people signing up for weekend courses or perhaps even for coaching and mentoring. No worries, I used to be one of them too!

During the summer and early fall of 2009, I was busy trying to put together some lease option contracts. You might be surprised that I actually produced four contracts with local sellers and had a list of over 30 buyers! But alas, everything collapsed as quickly as it came together and I didn’t make a dime.

The real education began when I met a realtor who taught part of a first-time home buyers class I attended. She gracefully allowed me to grill her nearly to death and boy, did I get an ear full.

Before I continue to delve into all this, let me briefly make a disclaimer that I am not against investors or investing. As a matter of fact, I still consider myself and investor and open to new ideas and finding properties with creative financing. That being said, this is what I learned …

The 7 Hidden Dangers:

#1. Buyers are not protected
#2. Inspections and Appraisals are critical in purchases
#3. Lack of Professionalism
#4. Lack of up-to-date knowledge and access to it

#5. Gurus are just pitching information and techniques
#6. Real Estate is an ever-changing landscape
#7. The perception is the deception

The Buyers Are Not Protected.

It took a few seconds to sink in, but with real estate investing, the buyer of any investment property is not protected. A buyer normally buys a property from an investor in ‘as-is’ condition. This makes contracts like lease options dangerous. What if the buyer signs a contract on a home ‘as-is’ and the roof caves in? Or the foundation cracks? The lesson here is that the faster the property moves (sold), the less likely a buyer is going to catch any major problems with the property.

Something more obvious is the loss of any rent credits and option consideration money (down payment). Imagine putting down $5,000 as option consideration and then paying … let’s say, $1,000 per month in rent with a 50% or $500 per month rent credit for a year and suddenly, you have to relocate. Ouch! You lose everything. Remember, it was in the contract you signed that there were no refunds of rent money or deposits.

The investor doesn’t care because he’s got his money and he’s legally out of the picture. With a carefully crafted lease option agreement, you would have a difficult time if you pursue a lawsuit against the investor. Many experienced investors know they can get away with this too. Bottom line … no love for the buyer.


Feel free to contact me for the rest of this news release that includes the solution to the above problems.