I was a young teen when my father started buying investment real estate in Southern New Jersey (Sea Isle, Avalon and Stone Harbor, Cape May County, New Jersey). He was a man that could do everything himself so being a real estate investor seemed like a good option for me since I knew a little about it. Boy was I WRONG! It is very difficult and frustrating but rewarding. I could give details but that is for another time.
While buying, rehabbing, landlording and selling in Southern Florida, I learned several tips, tricks and lessons that helped me during the investment cycle. These items will help you avoid mistakes, save time and money and make the process a little easier to manage.
To Your Success as an Investor, Rehabber and Landlord:
- Make sure you have the mail forwarded to your business address after you purchase a new investment property....Why? Read my previous blog about this one at: Make sure you have the mail forwarded blog...
- Check to see if you have any liens or violations caused by your tenant before giving back their security deposit. I got nailed for $500 for a pit bull violation (future blog posting).
- Make sure during a title search that your title company checks for Open Permits. More than once this has hampered a pending sale.
- Make sure when a potential client places a deposit for a rental property, you make them sign a document that explains the rules of the deposit, refund or non-refund terms, what it represents, disclosures, etc. Several times I received calls from potential clients wanting their deposits back after you, the landlord, already took your property off the market. Protect Yourself.
- You make or lose money on an investment property when you gain control of the property at a specified price. Make sure you follow the Maximum Allowable Offer MAO rule! See my MAO blog about this....
- When purchasing an investment property, make sure the tax records match the property description on the MLS. If the property is listed as a 3/2 but tax records say a 2/1, there may be a problem with the structure being legal.
- By checking the number of water meters and electrical meters will help you tell whether the multiunit structure is a legal structure.
- Make sure when you are about to sign any real estate contract for a property: Florida FAR BAR, short sale option contract, purchase contract etc., all parties are there for signature. If the significant other is not present you may have problems later on. By Florida law if the couple is divorced, unless the property has been settled previously (request documentation as proof), both husband and wife are entitled to the property therefore you need both signatures. Your first Question for any deal is "Are You or Have Been married?"
- While rehabbing a property, make sure your mailing address is posted somewhere that the mailman can read it. Otherwise, he will not deliver your mail or make sure you have the mail forwarded.(See number 1)
- Land Lords have more than one option for collecting rent and utility payments from their tenants. Section 8, Section Eight, Plan 8 or Plan Ocho is a government subsidized program that pays the monthly fees for low income families associated with living in the Land Lord's apartment, condo or single family home. For more information go to: Section 8 - Information for Landlords and Tenants.
Do you have any tips or tricks with the buying, selling, rehabbing or landlording that you would like to share?
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