Recommended Homes in Every City

Choose your city and check out the latest recommended homes More Homes

Atlanta

Austin

Baltimore

For More Cities

litpoodle
  • Home
  • Intro
  • FAQ
  • Blog
  • Login / Signup

Category: Intermediate level

Intermediate level, All post

How To Spot These Scary Real Estate Investment Scams

lit-admin / December 2, 2021

“A con artist’s only weapon is his brain.”  ― Frank W. Abagnale, Catch Me If You Can Let’s give an antidote to this statement, shall we? If a con artist’s only weapon is his brain then so is yours. After…

Continue Reading→

 

Categories

  • All post (10)
  • Beginner level (10)
  • Featured (4)
  • Intermediate level (1)
Suggested Blogs
    • How To Spot These Scary Real Estate Investment ScamsHow To Spot These Scary Real Estate Investment Scams
      December 2, 2021Intermediate level / All post“A con artist’s only weapon is his brain.”  ― Frank W. Abagnale, Catch Me If You Can Let’s give an antidote to this statement, shall we? If a con artist’s only weapon is his brain then so is yours. After all, knowledge is power and this power can help you identify, call out and protect yourself from real estate investment scams.  Such scams are not just a part of crime thrillers but are real and pervasive. Also contrary to what we would all like to believe, it can happen to any one of us. As a first time buyer, it’s natural to look at your first real estate investment with a deep sense of optimism. We aren’t here to burst this bubble but to guard you against scams and frauds. We at LitPoodle want your Real Estate Investment journey to be smooth and for your money to be in safe hands. This brings us here. This article will give you knowledge on a sea of investment scams, so you can spot the red flags immediately. Let’s get smart! These Are Common Scams That First-Time Real Estate Investors Fall For When Scammers Lure You in With Fake Listings Fake listings are one of the most common scams to plague the real estate industry. Although such scammers usually target renters, ever since the pandemic, investors have also been pulled into this vicious net.Lockdowns created an ecosystem of virtual tours, signing lease agreements online and no physical meetings with sellers. Scammers have taken advantage of these unique conditions by creating fake listings. You may find ‘for sale’ ads splattered across the internet complete with pictures, detailed descriptions of the property and a lucrative price tag.This is but a garb for a property that most likely does not exist.  The best way to assess the authenticity of such listings is to meet the seller, verify his/her credentials and see the property. Ensuring these steps during your real estate investment process and keeping a record of communication can safeguard you from fake listing scams. When Property Pictures Conceal The Real Condition of The Property In our previous blogs, we have warned real estate investors on the downsides of purchasing a property without seeing it. Drive-bys, virtual tours, property pictures – none of these are substitutes for seeing the property in person. We urge all our readers to hire a professional property inspector. Do not buy any property without having an inspection done. If possible join the professional during a tour of the home. They will be able to point out issues related to structure, roof plumbing, drainage, electrical wiring, etc.  Hiring a professional also brings in necessary objectivity. While you may miss out on some important details, most professionals won’t. Why take these measures when you have pictures of the property as proof? Pictures can be edited, manipulated or straight up taken from the internet. Aesthetic property images offer no guarantee about the actual condition of the property. Whether you are investing in your local neighbourhood or remote buying out of state, go take a look at the property. Scammers often use deceptive images to lure buyers in. Ensuring a visit will either confirm that the property is real or confirm your worst fears. Either way, it’s a win-win situation for you. When Emails Claim Money Needs to Be Sent to A “New” Account There is a sigh of relief you experience when your real estate investment is finalized. The long hours filled with home tours, negotiations and documentation have all borne fruit.This is also the moment you are most likely to let your guard down.It is during these times that most home buyers are subjected to wire transfer frauds. This happens when scammers imitate the Title company and request you to transfer money. Scammers might then send you an email claiming a sudden change in transfer details of the final payment or might ask for an unscheduled transfer of funds. At this point, it’s best to call (not email) your agent at the Title company. Have them verify the email and only then carry out any transactions.Such ‘business compromise email scams’ have been called epidemics and for a reason1.These have caused investors to lose up to $150,000 and some even their whole life savings2. Title companies, on their part, have taken steps to combat this epidemic by administering secure messaging, instituting dual authentication, etc. Despite these digital safety measures, you need to be cautious and aware till your real estate investment deed is not signed and sealed. When You Buy Property Directly from homeowners Who Aren’t Represented by Licensed Agents Sometimes you might find yourself dealing with homeowners who have opted to sell their property directly without having any kind of licensed agent representing them. The problem with these kinds of deals is that homeowners most often have an unrealistic or exaggerated view of their property’s valuation. And more importantly they might not be very forthcoming on all the defects or the repairs that the house needs. On the other hand, the agents are legally obliged to declare all defects in the house, however insignificant they might be. Agents fear trouble and a dent in their reputation, if they don’t disclose all the relevant facts to the buyer before the deal. However the homeowner might not be aware of such requirements/regulations. In such situations, take a step back. Have the property assessed and inspected thoroughly with the help of professionals.  When Title Deed Scams Leads To Pseudo-Ownership of the Property Once you pay the final payment on your real estate investment, the Title company will draw a deed. This deed holds your credentials and verifies you as the owner of the property. With each legal change in ownership, the title deed is changed. This deed is of integral value and is recognized by your state. It is also this deed that qualifies you for mortgaging your property for a loan.We are sure you can see the pattern here!For scammers, title deeds are one of the most profitable documents. Changing the ownership of a property can give them access to loans on a property that you own. Though these scams have been reduced with stringent measures by states, it’s still best to be cautious.Property owned by the elderly, abandoned for years or one which has no mortgage on it, is more likely to be a target of such scams.If you or someone you know suspects that their title deed has been manipulated then head to your local authorities. Also, be aware of your rights. If your property deed has been infringed upon by a scammer, then you are not liable to pay any loans under this.Similarly, make sure that the Title Company does a thorough title inspection before buying any property. Liens could have been placed on the title by anyone who has lent money against the property or by anyone whose work on the property has been unpaid or by a regulatory body whose taxes haven’t been paid. Make sure you understand the outstanding liens and their implications when assuming or buying any property. A Word of Caution We have touched upon some common investment scams. While you keep an eye out for these, also be wary of the different versions of the above scams. Certain common patterns can help you identify real estate investment scams. Keep an eye out for: Sellers/Agents/3rd Party Persons offering limited or incomplete information about a property. A rushed sale where the seller is insistent that you close the deal immediately, oftentimes by just viewing pictures of the property.Sellers/agents who fail to provide authentic documentation. In addition, hire a title company or an expert legal consultant who can help you validate any documentation and paperwork.Sellers/agents who fail to provide authentic documentation. In addition, hire a title company or an expert legal consultant who can help you validate any documentation and paperwork.Inflated rates or suspiciously low home rates can both be red flags. Do your own research about the neighbourhood to understand the media rates. Also consult an agent who can help you understand the validity of rates.Remember, most scammers work on a buyer’s ignorance. Do your research, hire consultants and only use secure real estate investment platforms and you should be good. Adopt These Precautions To Guard Yourself Against Real Estate Investment Scams Even if you don’t suspect your investment to be fraudulent, it’s important to follow a few checks for all your investments. In the best case, it makes your investment process smooth. In the worst case, it safeguards you against a scam.Here are a few ‘hygiene’ points you should keep in mind when investing in real estate. Document everything. Emails, chats and messages that are part of your interactions with agents/buyers and 3rd party contacts. Make copies of originals and share these files with a trusted friend/family member.Look at all the facts while also listening to your instinct. Strike a balance by relying both on your intuition and your intellect. Investing in real estate involves time, effort and resources. So think clearly before making a decision.Hire professionals from property inspectors, licensed agents to legal teams. The expertise of these professionals will help you notice any red flags.Observe, listen and pay attention to everyone you communicate with. Scammers/Fraudsters are usually charming, accommodating and yet very persuasive.  What To Do If You Fall Victim To A Real Estate Scam We understand that despite taking all precautions any one of us can become victims of a real estate investment scam. If this happens to you or someone you know then remember that mistakes do occur. Next is to stop feeling embarrassed and report the matter to your local authorities.  If you have documentation, transaction details and any other information, you can still salvage your investment. Furthermore, you can save another person from being a victim. Seek help and you will be fine. LitPoodle’s aim is to democratize real estate investing. Spreading awareness and knowledge to first-time investors is part of this process. This awareness also extends to action – our software is secure, safe and reliable. The safety of your data, information and your experience is of paramount importance to us. So extensive verifications and collaborations with trusted partners is the standard we uphold for ourselves. Explore LitPoodle to experience secure real estate investing.Sources 1.https://www.cnbc.com/2019/10/05/homebuyers-are-falling-for-this-scam-some-lose-their-life-savings.html 2.https://www.cnbc.com/2019/10/05/homebuyers-are-falling-for-this-scam-some-lose-their-life-savings.html  ...
    • How To Avoid Mistakes As A First-Time Property InvestorHow To Avoid Mistakes As A First-Time Property Investor
      November 24, 2021Beginner level / All postThe investor’s chief problem—and even his worst enemy—is likely to be himself. – Benjamin Graham As a first-time real estate investor, your very first reaction to this statement is probably denial. “Not me”, “I won’t make those mistakes”, “I am not one to be fooled” are thoughts running through your mind right now. This is a cognitive bias you are experiencing. Here your mind is simplifying information and even relating it to past experiences. Truth be told, there is no precedent to real estate investing even if you have invested in stocks, gold, or cryptocurrency before. Investing in Real Estate is akin to exploring a new territory altogether. It’s not as volatile as stocks, gives a higher yield than gold and the interest on your savings account. This is probably why 93% of Americans believe a home is a better investment than stocks1. It definitely lies within a ‘safer investment zone’ but also one where mistakes can cost you and cost you big. Real Estate Investors & Beginner’s Luck  First-time real estate investors don’t go in thinking of the mistakes they will make when investing. They go in thinking of the yield they will gain and consequent profits. We all subconsciously hope for our beginner’s luck to favor us. Real Estate Investing is not luck, it’s math. There is a scientific process associated with investing that involves knowing, among other factors, your neighborhood, the growth rate of the region, rental yields, HOA rules, and more. It’s a methodical process. So relying on luck or incomplete information is a red flag. The Mistakes You Can Avoid As A First Time Real Estate Investor “Does understanding the process mean I won’t make any mistakes?” No. Mistakes are part of the process of investing, especially for first-time real estate investors – it’s inevitable. Understanding the process helps reduce the scale of loss associated with these mistakes.   Here’s a look at some common mistakes that first-time real estate investors are prone to making. 1. Investing Because ‘Everyone Said So’ In a survey of 2,020 millennials, it was found that 38% search for investment advice for free online2. This is a good first step but cannot help you make the final decision. Investing should be a personal decision based on multiple aspects.One you take after considering your finances, investment goals, and future plans. This also means that you need to do the research yourself by looking at property investment apps or reading credible material.  2. Investing Because ‘It’s In The Same Region’  Let’s begin with stating that there is nothing wrong with investing in property in your own region. Oftentimes investing in property in your region is easier, faster, and a fairly more transparent process. You have deeper clarity on the growth rate, economic situation, and rental yield of all neighborhoods in your region. Yet if your region doesn’t offer high rental yields, has a higher migration rate or high median rates, then it’s good to widen your horizons.  The mistake first-time real estate investors make is to ‘settle for less’ since the property is in their own region. Remote buying is an option that’s not considered. Technology has made virtual home tours possible. Almost 77% of Americans already do virtual tours before a real property visit3. Remote buying is also here to stay since it’s predicted that remote work is expected to increase by 87% since the pre-pandemic levels4. You can now interact with agents and even close deals in a different region. Applications like Litpoodle are designed to simplify remote buying. The application helps you identify the best remote areas and growth rates complete with forecasts. The insights give you information that only local buyers would be privy to. 3. Investing Because it’s Cheap Paying less can sometimes mean more trouble. As a first-time real estate investor you may want to make an immediate offer on a property that is cheap because it aligns perfectly with your budget. It may seem like a deal made in investment heaven but it’s important to approach it with caution. Make sure to research about the factors that affect quality of life (safety for example) in the area, explore if the property is under litigation, and keep a lookout for any environmental issues that may lead to a decrease in rates. While you may buy it for cheap, do consider how hard it will be to rent it or sell it.  So to avoid this common investment mistake ensure you do your research. Ask questions to the agent, do a thorough inspection of the property and its surroundings.  4. Investing Because It Looks Perfect In Pictures and I Don’t Need to See It. The perfect place can wait. Yes, you made an offer and so did 100 other real estate investors. Yet it’s wise to inspect the property in person. Whether you are buying locally or remotely, don’t invest in a property without seeing it. You don’t want to know that your house needs expensive repairs and maintenance after paying for it. Don’t completely rely on attractive videos or images, or the words of the sellers. Go to the neighborhood to get a sense of the place. Walk around the home and inspect everything. This gives you deeper insights into the repair costs you can expect. 5. Investing Because It Offers High Rental Yields Are we against high rental yields? Of course not. That’s the reason real estate investors are in this in the first place. Yet high rental yields can mean nothing if the economic growth of the region as a whole is on the decline. This will push people to other regions, reducing the volume of renters and leading to higher vacancy. So although the theoretical rental yield might be high, your returns might be low when considered the effect of higher vacancy.Research plays an important part here too. Learn about the region and neighborhood, keep an eye out for local news to understand if jobs are being created or if new industries are being set up. This will tell you whether the place will see a huge influx of people who can be potential renters. 6. Investing without considering the HOA rules The HOA (Home Owners Association) is an integral part of the housing community. There are many neighborhoods that opt for HOA. When you are buying a property that is in a HOA neighborhood, go through the HOA rules and regulations with a fine-tooth comb. The HOA maintenance charges are usually a huge deterrent for renters. Add to that arbitrary rules and regulations, and renters will flee. As a first-time real estate investor, you don’t want to deal with whimsical rules. So don’t make this mistake by ensuring you are aware of every rule written down by the HOA. 7. Buying Because I Trust The Agent You need to trust your agent – we are not contesting that. It’s equally important though to trust your agent’s credibility, experience, and expertise. So make sure you work with a licensed agent who is reputable. Not working with a good agent can lead to concerns at a later stage in the investing process. A good agent on the other hand will lookout for any potential issues and flag them early, thus helping the investor avoid many a hassle. On LitPoodle every agent is vetted so that investors can have peace of mind. Its features are designed to help real estate investors like you avoid common investing mistakes by empowering you with the information you need – providing you with the insights on best regions to invest in, neighborhoods with high rental yields, and forecasts on your property value. This makes LitPoodle the perfect real estate investment app for first-time investors. Sources https://www.keepingcurrentmatters.com/2021/04/14/93-of-americans-believe-a-home-is-a-better-investment-than-stocks/ https://www.businessinsider.in/international/news/half-of-millennials-go-to-a-friend-family-member-or-partner-for-money-advice-regardless-of-how-much-they-earn/articleshow/78114946.cms https://www.meero.com/en/news/real_estate/944/2739-the-power-of-virtual-reality-tours-in-real-estate-en https://www.census.gov/library/stories/2021/10/zillow-and-census-bureau-data-show-pandemics-impact-on-housing-market.html https://finance.yahoo.com/news/best-worst-cities-own-investment-090000378.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAB914Zgj_iM3uIVo1PpZtzp6ZHBWoip_J5xEjXTBTtzUMBy6QcN5Rzm4M5t-dLneb1jynHZjIwNecd3-y4SZZQJGy9Ry9OuQCdTjiCMEdgAylKTyn299hSJgED-Gop-D4ie3vpnwgghlIAYjafEwzB-a8vS22VkKXwKYUadUhRDu  ...
    • Real Estate Investment 101 – Basics You Need To KnowReal Estate Investment 101 – Basics You Need To Know
      November 18, 2021Beginner level / All postAt Litpoodle we are often asked why we write so much about Real Estate investing. It’s because, despite the sea of information on real estate investment on the internet and our own blogs, people are still left confused about nuances. When we did an extensive article on How to start investing in Real Estate, we were flooded with so many questions. We realised that Real Estate Investing is a vast area and we want to simplify that information for you – just as Litpoodle, our real estate investing app, generates simplified real estate investment metrics. Having said that, It’s important that you pull up your socks and do it fast because home values have increased across the USA have increased by 17.7% in 2021 since August of last year1. This is both good news and bad news – good because your existing investment will appreciate and bad because your potential real estate investment will cost you more as days pass. As a first time investor, all this information can be overwhelming. So much so that you almost want to not do it…almost! Remember that real estate investment is easy when you know what to expect. A good strategy coupled with an agile real estate investing software makes everything easier.  But what is this everything? Sometimes you really must be wishing that there was a friend who could walk with you through the process. Someone who has the experience, the smarts and coffee to cheer you on. Well, we don’t know about the coffee, but the rest we have sorted out.  Let’s together dive into the world of real estate investing with your trusted LitPoodle. Real Estate Investment Process – How It Works. The Where  Where Should I Invest in Property? What’s the first thing you will do on your real estate investment journey? Find a property! Sorry folks but you got that wrong. The first thing you will do is narrow down on is your neighbourhood in your region if you are investing locally or the region itself, if you are investing remotely. This is the holy grail of real estate investing. So much so that a whopping 80% of home buyers value the neighbourhood quality over square footage2.  Local Buying – Your neighbourhood matters. It is what will determine your rental yield, effective tax and appreciation. Be sure to check it out to gain a deeper understanding of what metrics you should look for when buying homes locally. Remote Buying – What if you aren’t buying locally and want to opt for a remote property? Remote buying definitely opens up more options for you. We have covered this in our ‘top regions for real estate investment’ with key metrics in our blog. Yet there is a downside – that of control. You exercise less control over the entire process. But this is a minor roadblock since apps like LitPoodle are trying to make remote buying an easy and safe process. We do this by listing neighbourhoods that are ideal for your budget and requirements within the region of your choice. Disclaimer (Nothing scary, we promise) – While you can buy a property without seeing it, we highly recommend you have one visit before you put your signature on the papers. The How Much How Much Money Do I Need? You can start with a $0. No, we mean it and this is exactly what we have covered in our article on ‘how to invest in real estate with little money’. When we say little, we mean little! A low budget doesn’t necessarily mean fewer options, it just means you have to widen your search. That’s exactly what LitPoodle helps you do – explore more options from the comfort of your couch. Take for instance the fact that Dallas, Houston, and Miami are great options for a lower budget because they have the least number of competitive bids3. If you do have a higher budget then look towards Austin, Texas.  These are insights that LitPoodle can give you. Another aspect that will strongly influence your budget is ‘the what’. Curious? Keep reading. The What What Type of Property Should I Invest In? So it’s established that the most popular real estate investment options are townhouses, apartments, condos and single-family homes. This may sound like a cliche, but each comes with its pros and cons. Nonetheless, assessing a property with little knowledge of its type can be detrimental. Be informed rather than be sorry, is our motto. So let’s quickly tell you what each type has  Condos Condos are great as an ownership option because while the operating costs are high due to HOA maintenance, the appreciation costs are higher. These are also comparatively easier to afford. In May 2019, the median sale price of a condo was $257,100 and that of a single-family home was $280,200 4. Townhouses These are good options for rentals as well as ownership. While townhouses can’t be entirely private since their walls are shared, nonetheless they are more popular among renters. The privacy, spaciousness coupled with convenient locations make townhouses stronger on the ROI front. Also while HOA maintenance costs do apply, the added flexibility in the use of space is something renters enjoy. Single Family Homes. These usually appreciate faster than condos or townhouses5. Making them a good pick for a Real Estate investment. If you are looking at renting the property, then occupancy will not be an issue. This is due to the fact that single-family homes are averaging at 94.5% occupancy6.  It doesn’t stop there, since April 2021 single-family rents have soared to 5.3% compared to April 20207.Just keep in mind that while the rental yield for these homes is high, so is the operating costs. So plan your budget accordingly. Smart homes are another sub-set within property investment that’s gaining traction. According to a survey, 63% of Americans want smart and sustainable homes. 58% look for smart lighting options.  Here’s a little known fun stat for you, 30% of millennials don’t see a garage as necessary!8 So don’t brush off a smart home as yet another fad. Interested renters might be willing to pay higher rents for such homes. The Who Finding an Investment Friendly Real Estate Agent Finding real estate agents is easy! Finding investment-friendly agents is a tad bit harder. If you are buying property with investment as the goal, then working with a specialised agent will do you good. While you can do your own search, ask around or even put up an ad, LitPoodle makes the process easier for you. Our real estate investment software has a list of credible agents whose expertise will help you make the right choice. The How Long How Long Before I Can Finalise My Property? On average, you might up to 5 months to shop for a property and another 5-69 weeks to close a deal. During this time you or your agent will be making multiple offers to current owners. So this timeline can be extended or perhaps even shortened depending on how the offers span out.  Sadly, buying real estate is not as easy or quick as we would all like. But LitPoodle, our real estate investment app, is actually designed to make the process faster.  How? With property listings, comparatives, suggestions and metrics that tell you the ROI, rental yield and so much more. You can hire an agent and bam, you are ready to make an offer. Don’t believe us? Sign up to access our real estate investment app – it’s free, fast and oh so smart. Sources https://fortune.com/2021/05/20/home-price-average-median-increase-2021-real-estate/ https://www.baymgmtgroup.com/blog/2021-real-estate-facts-statistics/ https://www.baymgmtgroup.com/blog/2021-real-estate-facts-statistics/ https://www.ramseysolutions.com/real-estate/are-condos-a-good-investment https://www.nolo.com/legal-encyclopedia/which-better-return-investment-condos-single-family-homes.html https://finance.yahoo.com/news/9-single-family-rental-statistics-143708187.html https://finance.yahoo.com/news/9-single-family-rental-statistics-143708187.html https://www.baymgmtgroup.com/blog/2021-real-estate-facts-statistics/ https://time.com/nextadvisor/mortgages/how-long-does-it-take-to-buy-a-house/  ...

Subscribe to the best blogs on Real Estate

Copyright Litpoodle © All rights reserved.
  • Instagram
  • Facebook
  • Pinterest
Litpoodle
  • Home
  • Intro
  • FAQ
  • Blog
  • Login / Signup
  • Home
  • Intro
  • FAQ
  • Blog
  • Login / Signup