Every real estate investor wants to find the home that is an amazing deal. However, in order to find this great home at a low price, real estate investors tend to look at the positive instead of trying to find the negative. It’s extremely important when purchasing a home to look for items that come up as a red flag. Without searching for problems, real estate investors may never find them. Below are a few items that real estate investors need to consider before deciding that the purchase is a good option.
The Purchase is too Amazing
If the home is at an extremely large discount compared to the market, real estate investors need to find the reason. If the reason came from extremely large repairs or improvements, it is recommended to get an estimate of the overhaul before making any purchase decisions. After receiving that estimate, the real estate investor should add on some additional costs for unforeseen items. Typically, if a home is low priced with little to no improvements, the home owner is probably hoping to start a bidding war. In that case, the real estate investor should be prepared to pay for much more than what it was originally selling for.
Sometimes the home owner or real estate agent selling the property are not offering very much information or are avoiding questions. This is an immediate red flag and any real estate investor should look into the property much more thoroughly before making any purchase decision. The investor should only purchase from a trustworthy source so if the seller seems elusive, the real estate investor should question harder or leave the sale. “Better safe than sorry” will always apply to this situation, especially when it comes to large purchases.
Before purchasing the home, the real estate investor needs to check the outside area to see how the location is faring. Is the location in an up and coming area or does the neighborhood seem to be in a decline? This will greatly affect future property values and should be considered at great lengths.
There are many other items to look out for when purchasing a property. A real estate investor should look for problems when purchasing a property or they will most likely be surprised later. Comment below with other red flags to look out for and follow me on twitter!