Remember the movie Forrest Gump, when Tom Hanks’ character just started running... and running... and never stopped? He continued through the rain, sleet and scorching desert heat. Perhaps we can all discover our own inner "Forrest” and learn when we should start running... and running...from that troublesome real estate transaction before it’s too late! Before we lace up our Nike’s and pull on our all-too-revealing lycra outfits, let’s look at 8 reasons to run from a real estate investment property:
8 Reasons to Run from a Real Estate Investment
1. Exceptions to title insurance. Easements and boundary issues that aren’t covered by title insurance may make your property unsellable.
2. As-is condition with no feasibility period. What are the seller’s hoping you don’t find?
3. Foundation issues. Sometimes foundation issues can lead to a whole host of hidden costs and expenses.
4. Busy street. You can fix the house but not the loud honking and piercing sirens!
5. Recent crime uptick in the area. Potential buyers will know of any police-related events, even if you don’t.
6. Mold or asbestos. The cost of remediation can be hard to quantify in advance.
7. Complex short sale negotiations. Dealing through layers of bureaucracy can be time consuming and still result in no deal.
8. And lastly, the Addams Family for neighbors. Great as a classic sitcom, but not so great as a fix and flip real estate investment neighbor. You can fix up the house as much as your heart (and budget) desires, but you just can’t easily fix a troublesome neighbor. Although, Uncle Fester would be great around Halloween!
Taking some or all of these factors into consideration is crucial in making a smart and educated real estate investment decision. Please contact Walnut Street Finance for more tips and advice on best ways to navigate the private money and hard money real estate investment industry. You can also visit us at privatelending.com!