Safe real estate investing

There is no such thing as 100% safe real estate investing, but you can limit your risks in several ways.Real estate is traditionally a very safe investment vehicle.Even if your house burns down, you still have your land.Stock can go to zero, but normally land will not.However, there are many scams and frauds related to real estate so you will want to do your homework and understand the different issues involved.

Here are a few tips to limit your exposure:
1.Get everything in writing.You may be dealing with friends and family even, but you want to get everything written because when you shake on a deal you may have a different understanding of the deal than they do.For instance, if you agree to share the proceeds 50/50 your partner may be thinking of splitting the money received on the sale while you only consider the money minus any expenses incurred during the transaction.

2.If the person you are dealing with says you don't need an attorney, go get an attorney.Having an attorney review the paperwork and contracts will make sure that everything is legal and that you have written what you intend to agree upon.An attorney should be valuable for both parties involved.If a person is suggesting that you not get an attorney, should be a flag for you to double check everything on the contract.

3.Don't let yourself get pressured into a deal because of time.Most real estate deals are time sensitive, but you should be able to do your due diligence before purchasing or signing a contract.There a many different ways to `tie-up' the property without actually purchasing the property.You will get good at making decisions quickly, but if somebody is putting the pressure on, you may want to walk away from the deal and wait for the next one.

4.Do your due diligence.You will want to research each deal you get involved with.Real estate has many different facets, so you will need to get experience in different types of deals.Additionally, real estate can be very different in price even though property is only a block apart.Do your research and don't take information given to you by others in the deal at face value.

5.Watch out for partners taking out cash at the front end.In real estate investing, you make money when you buy the property, but you get paid when you sell the property.It is possible to take cash out of a deal when you purchase the property.However, remember that cash is actually coming out of your loan.Hence, if you are funding a deal and a partner wants to take cash out at the beginning, even if they are going to split it with you, you need to be careful.

6.Be wary of partners that want to be paid for their time and want part of the profit too.In this case, the partner has nothing at risk.They get paid for their time involved, so if the deal goes bad, they still walk away with money even if you don't.If you attach their compensation to the deal paying off, then they will be more committed to make sure the deal is completed.

7.Don't give out power of attorney.You want to stay in control as much as you can.You should be able to sign all of your paperwork, even if you are out of state.Faxes are available in all 50 states.If you are in a war zone, you may want to consider giving somebody power of attorney, but you should give it to somebody you trust like a spouse or sibling or even your attorney.This will prevent a partner from taking advantage of your absence.

In summary, no real estate investment is without risk, but you can limit your risk.Make sure you understand all aspects of the deal and have an attorney or trusted and knowledgeable friend review your documents.