Real Estate Investing: Risks and Benefits
Drive for dollars – Take a drive and look for distressed properties. Mail piling up out of mail box or on door step overgrown grass, hedges, and landscaping, excessive flaking exterior paint, rotted or exposed wood, lock boxes on doors, (railing, or poles) with no for sale sign in yard. Boarded up basement windows, outdated exterior design, zoning/municipal notices posted on windows and doors. You can look online at tax records to find an owner of a distressed property. In the past 18 months, I have purchased and rehabbed more than 350 homes. Here are some things I’ve learned that can help you get the best results for your efforts.
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Risks:You might choose partners who dont have the financial wherewithal needed to handle major issue, or partners whose strategies for renting, managing visite site and/or improving the property are not aligned. Plus all the risks in the individual direct ownership category above. General or limited partnerships These investments including tenant-in-common investments and privatereal estate investment trusts (REITs) are pitched in newspapers, at real estate clubs, by some financial institutions and by investment groups. In these investments you are totally trusting someone else, the sponsor, to handle a huge portion of your net wealth. The biggest issue with these is that most investors dont do even the most basic due diligence on the investment sponsor, and even if they want to its hard to do. Few investors, for example, review a sponsors credit report, detailed investing history and tax returns on past deals.
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