Those that have not yet invested in a good real estate education course yet need to watch out for these pitfalls and others that can potentially put an end to your real estate investing dreams before you even get rolling if you are not careful.
While distressed properties can offer incredible profits and minor cosmetic repairs can add big profit margins those who have availed themselves of a quality real estate investing education course know that there is a big difference between cosmetic repairs and structural defects. Structural items that can cause big issues include roofs, foundations, mold and Chinese drywall. These items can not only be very expensive to rectify but can prevent buyers obtaining financing and result in your being stuck with the property.
An important element of a good real estate education is learning about building permits and issues that they can present to investors. New investors may be offered many attractive looking deals that have had additional rooms added or garages converted to living areas. However, unless permits were obtained as the new buyer you could end up getting stuck with fines and having to pay to rectify code issues you were not even responsible for. This even applies to trees being removed from the property. So make sure permits were pulled for all work done before you buy.
Experienced investors have also learned from their real estate education that performing last minute title searches in crucial to ensuring clear title to any properties that they are buying. Most title work is often done weeks in advance of a closing, leaving too much time for unscrupulous sellers to take out new loans on a property or incur liens. Have a new title search performed just before closing to ensure you don’t get stuck with a large unexpected bill later.
Regardless of how a property looked when you first viewed it and when inspections where done one lesson you cannot ignore from your real estate education course is making sure that you complete your walk-through before closing. If tenants or sellers have not vacated the property you could face big and expensive eviction issues that dig into your profits. So ALWAYS make sure you have a walk-through performed on the day of closing.