Unfortunately the real estate world has and will continue to attract those are willing to take advantage of the good, honest, hardworking bunch that live in this space. In our 15ish years in the industry, we’ve seen them come and go and have noticed there are distinct patterns that many of them hold…we’ve gotten to the point where we can see them coming. Here are some things to watch for, just to alert your radar to be a little more diligent when dealing with this type of person. This applies to those soliciting JV Funds and Second Mortgages as well as any number of scenarios.
Have you ever had a conversation with someone who is talking so fast and jumping around from one subject to another that by the time there is a break to ask your questions the topic has changed? Make sure you understand and aren’t falling behind in the conversation.
Notice if when you ask a question, do they answer it? Or do they start to then switch the topic so fast and then talk on so long that you don’t even remember what you asked? Don’t assume because they can talk faster and flip subjects faster that they know more than you do. Those who really understand what they are doing can explain it in the simplest of terms.
Length of time Investing – How long has this person been investing?
Now this does not have to be a barrier. A newbie with their drive and passion to succeed is nothing to be afraid of and definitely not a reason not to invest. It seems hard to believe when first starting out but getting into real estate is not the hard part. Its staying in that’s difficult. So, if they are just starting, thats ok, but do they tell you that? or do they talk as if they are the experts on every subject, knowing just the right answer, yet don’t have any actual time proven success to back that up?
The key here is honesty. Are they being honest about their experience and knowledge level? Ask them outright to see examples (paperwork such as Purchase and Sale contracts, Title to properties, photocopies of cheques from deals, etc) or if they don’t have that, speak to third party professionals (Accountants, Lawyers, Realtors and Mortgage Brokers) that can vouch that they know that this person story is real, if there is no paperwork that can back it up. You don’t need to doubt everyones story but, as the saying goes, if something seems too go to be true, it most probably is.
We will explore two more in our next post, stay tuned.
Written by Leticia Casanova for Investor Life