subject: Derek Elliott - Deadly Real estate Mistakes commonly made [print this page] Derek Elliott - Deadly Real estate Mistakes commonly made
Derek Business Presence: Investors in the real estate business can make mistakes when the market is up as well as when the market is down. During the down market, the results of those mistakes tend to be more speculative. Just because you have all cash or plenty of back-up does not exactly mean that you cannot make mistakes. The investors with the least money tend to "hype it up" when trying to get others into their deal. Every person that has something to do with the deal needs to have some "skin in the game". Here we have listed some of the Most-Common deadly mistakes Investors make,
Violating the Securities and Exchange Commission laws:
The SEC sedition comes when you anticipate a Guaranteed Investment yield on real estate. There are people in jail right now for making this deadly mistake in their real estate business. There are ways to involve others in your Real Estate business financially and one of those ways is to have all parties have some sort of direct ownership in the property. It's often termed as "Private Money investors". They're good for the Real Estate business, but there are certain govt. regulations about how you go about finding them.
Not Doing Adequate Due Diligence:
Zoning and Environmental laws can be a big issue, so don't neglect finding out about these potential restrictions, regulations that may affect you as the new owner. Many current owners are grandfathered in' and so newer laws might not apply to them, but as soon as ownership changes hands, the new laws / regs come into play. Don't miss this one.
Building-Refurbishing-Or Making Additions Prior to Permit Approval:
Many building departments will let you to start building your structure when you get the site plans passed, even before all the plans for the project are passed. Don't expect one department of the government to actually talk to another department. You may have as little as a 50% chance that everything about your plans will be approved. Seasoned contractors and investors have all erudite that this little part of the real estate business is one to keep a close eye on.
Not getting a Survey done before you Buy:
This is a very big problematic issue for props which have not exchanged hands in a long time, where a good-ole-boy' hand-shake deals were the norm. These days any easements or special arrangements concerning the property are recorded at the courthouse. But years ago, they weren't. Still this is also true in many small-country-towns have not come into the 21st Century and stuff is still not recorded. Be sure to get a current survey, including all easements, utility crossings, etc. The real estate business has a way of making the un-prepared lose their shirt. But you can avoid that by getting up to speed. Now the zoning laws may require a lot more land to build your complex. Sellers are not usually out to take advantage of you but it is not their responsibility to do your due diligence. This is one good way to kill your real estate business permanently,don't' leave this out.
Expecting Someone Else to Do Your Due Diligence:
This problem occurs especially when you get involved in an investment in another state or out of your area. Keep in mind that no one cares as much about your money as you do, its' YOUR real estate businesscare it as such!
Not Properly Analyzing the Local and Regional Economy:
Just because your area population can continue to indorse an apartment building does not mean that the area where you are looking to invest can continue to support all of the apartment buildings in that local area. Find out about the unemployment rate, other properties which are selling, plans in the county, growth trends in the area and much more. Believe me, this is no way to run a real estate business if you actually plan to make money.
Investing in real estate can be thought-provoking and if you go at it wrong, it can be extremely costly. So better Protect yourself from the common pitfalls. On the other hand, investing in real estate can be very rewarding, professionally and economically. Don't be afraid to seek help with a professional. In fact, most of these mistakes can be avoided if you know what you are doing. The more information and research you acquire, the fewer mistakes you will make.
