I've got some good news: Protecting yourself on real estate deals is actually pretty easy for you to learn.
Here are some suggestions for you:
Confirm the After-Repaired Value Of
"After-repaired value" is the value of the property after any and all repairs have been made, and the property is
in "retail sale" (i.e. excellent) condition. We'll call this the "ARV".
The best way to determine a property's ARV is to get an appraisal, and ask the appraiser for two different
figures: The as-is value of the property, and the approximation of the value of the property in after-repaired condition.
Determine the Repair Costs
If the property needs repairs, request a quotation from 2 or 3 different contractors - you always need more than
one quote. And the best way to select these contractors is by personal referral, so visit your local real estate investor club to find out which contractors have worked well for other investors.
Determine the Marketability of the Property
Contact 2 or 3 local real estate agents. Ask them to give you their estimate for the price that the
property could be sold for in after-repaired condition (this will help to confirm the information provided by your appraiser). Then ask the agent to tell you the average time on the market for houses in the location and price range that yours matches. This will tell you approximately how many mortgage payments will need to be made while you're selling the property.
Always Get Title Insurance
You'll have the option to purchase title insurance from your closing attorney or title company. Always do
Ask Your Attorney To Review Your Purchase & Sale Agreement & Closing Documents
You must have an attorney to represent your interests in each real estate deal. It's legal to work without an attorney, but it's not smart. The very best resource I've found for getting high-quality attorneys at a very attractive price is Prepaid Legal Services.
Plan For The Worst - Be Prepared For The Best!
You'll be wise to think about anything that could potentially go wrong, and plan in advance for it. Because most of
the time, you'll be well prepared and won't be caught by surprise.
But whatever you do, take action! Don't fall into the "paralysis of analysis"!
Note: If you're interested in being a property rehabber (in other words, doing fix-up work), you'll want to pay attention to the email I'll send you tomorrow. Have a great day!