Are you worried about potentially getting scammed by a real estate investor? It’s smart to be cautious. There are many scam artists out there who can be quite convincing. Nevertheless, there are also many real estate investors who could represent a real opportunity for you or could be offering you the deal of a lifetime. How can you tell the difference between the con artists and those there to help you? Well, there’s no foolproof method, but there are a few things you can look for.
A good investor understands that investments take some consideration, even when the deal may be time-sensitive. They want you to make an educated decision regarding your finances and they will give you at least enough time to discuss the transaction with your personal advisers. A con artist, on the other hand, will urge you to make a decision immediately.
A solid investor will make sure that the transaction is handled appropriately from start to finish, as a means of protecting themselves and you. This includes putting down everything in writing, closing through a title company and using standard forms such as a Texas Real Estate Commission (TREC) contract.
Real estate markets are surprisingly small places. If your investor has absolutely no presence within your market and does not come with any personal references or recommendations, it is possible that there is something they are hiding. If your investor, on the other hand, has had multiple prior transactions that completed smoothly, you likely have little to worry about.
A proof of funds will show you that the investor has the amount they need liquid to complete the transaction. Without a proof of funds, you cannot be certain of the investor’s intent nor whether they are serious about their investment.
Choosing an investor does not need to be a fearful process. As long as everything is handled properly and your documents are reviewed by professionals that you trust, you should be fine. Just remember to trust your gut and to conduct your due diligence.