Is it illegal to flip houses?
Website design By BotEap.comAny new real estate investor will be tempted by the idea of moving house. This is a quick method with the prospect of huge returns for anyone who has time to invest. However, wholesale real estate is also a place where scammers can set up shop and start illegally selling homes.
Website design By BotEap.comAs a new real estate investor, it is very important to be aware of the methods used by scammers so you can protect yourself and your clients. Just about anyone can also be scammed when selling real estate, leading many to wonder: Is it illegal to move? It’s not, but mortgage companies, homeowners, investors, and even buyers have been duped by a scammer with a fraudulent home investment from time to time.
Website design By BotEap.comIt’s in your best interest to learn about these potential scams so you don’t inadvertently enter one into your home remodeling business. First, let’s look at some ways to avoid scams.
Website design By BotEap.comTips to avoid moving houses illegally
You can become a successful wholesale real estate investor without falling victim to scammers in any way. You just have to be aware and make sure you follow these tips: Website design By BotEap.com– Perform due diligence. You’ll find most property problems this way and create your own appraised value.
– Obtain your own separate mortgage to purchase the property. Don’t let anyone get the mortgages for you.
– Don’t give out your social security number. Even when working as an investor, it’s important to discern who is getting your personal information. However, the bank might need it and will probably use it on paperwork with the title company. Website design By BotEap.comFlipping Houses: Illegal Twisted Appraisals
This scam involves hiring a corrupt real estate appraiser to appraise a property’s market value well above or below its actual value. This type of scam is used by homeowners, investors, and even corrupt mortgage companies to make a bigger profit on the sale of a property. Website design By BotEap.comThe buyer is the person who loses here and ends up with a property that they paid too much for, or the mortgage company that accepts a short sale price that is grossly undervalued for a property. Website design By BotEap.comDon’t let anyone convince you that they can ‘appraise’ the property in your favor for a few extra dollars. It’s a great idea and it may cause problems in the future. Website design By BotEap.comIllegally busting houses with good deals
This is a scam that attracts many new investors who like to attend free home exchange seminars. Investors may receive an invitation from a company that claims to be hosting a free real estate seminar with free food. Quite a bonus, right? Website design By BotEap.comFree seminars are very common in real estate and it is usually a good idea to attend. However, the scammers who host this free seminar use it to make home swapping illegal and will ask you to register with your name, address, phone number and social security number. Don’t give them your social! It is not necessary to register for a free seminar. Website design By BotEap.comOnce scammers have your social security number, they look at your credit report and see whether or not you have a good potential mark. The higher your credit score, the better, because it means you can get a very large loan. Website design By BotEap.comMembers of the ‘investment company’ approach those with better credit scores with a potential deal on a million dollar house they claim is worth $2 million dollars. Website design By BotEap.comThe investor who enters the deal is forced to take out a jumbo mortgage loan for a supposedly low price of $1.5 million and the ‘investment’ company will do all the work. They claim that they can negotiate the sale price of this house from $2 million to just $1.5 million. Once the deal closes, the investor should be able to sell the house for its full value of $2 million dollars and make a nice profit. Website design By BotEap.comHowever, scammers won’t tell you that the house they agreed to buy from you is only worth $1 million at full market value and that’s what it’s actually selling for. The investment company takes your loan and buys the house for $1 million and then gets away with the excess $500,000. The brand gets a house that they overpaid $500,000 for and the scammers only had to buy him lunch. Website design By BotEap.comSimultaneous closing scams to illegally move houses
There are a few ways that scammers can make fraudulent sales with a simultaneous closing. You may have already heard that title companies are refusing to accept simultaneous closings due to recent real estate scams. Website design By BotEap.comIt’s best to avoid using a simultaneous closing these days when investing in real estate. You will still be able to make a profit without a large investment using other real estate wholesale methods. Website design By BotEap.comDon’t worry too much about whether or not your process makes home swapping illegal, as long as you do your research, follow the letter of the law, and avoid these scams. Please note that these scams listed are just a few of many that scammers have come up with over the years. If there is a way to do it, scammers will find it and take your money.
You can become a successful wholesale real estate investor without falling victim to scammers in any way. You just have to be aware and make sure you follow these tips: Website design By BotEap.com– Perform due diligence. You’ll find most property problems this way and create your own appraised value.
– Obtain your own separate mortgage to purchase the property. Don’t let anyone get the mortgages for you.
– Don’t give out your social security number. Even when working as an investor, it’s important to discern who is getting your personal information. However, the bank might need it and will probably use it on paperwork with the title company. Website design By BotEap.comFlipping Houses: Illegal Twisted Appraisals
This scam involves hiring a corrupt real estate appraiser to appraise a property’s market value well above or below its actual value. This type of scam is used by homeowners, investors, and even corrupt mortgage companies to make a bigger profit on the sale of a property. Website design By BotEap.comThe buyer is the person who loses here and ends up with a property that they paid too much for, or the mortgage company that accepts a short sale price that is grossly undervalued for a property. Website design By BotEap.comDon’t let anyone convince you that they can ‘appraise’ the property in your favor for a few extra dollars. It’s a great idea and it may cause problems in the future. Website design By BotEap.comIllegally busting houses with good deals
This is a scam that attracts many new investors who like to attend free home exchange seminars. Investors may receive an invitation from a company that claims to be hosting a free real estate seminar with free food. Quite a bonus, right? Website design By BotEap.comFree seminars are very common in real estate and it is usually a good idea to attend. However, the scammers who host this free seminar use it to make home swapping illegal and will ask you to register with your name, address, phone number and social security number. Don’t give them your social! It is not necessary to register for a free seminar. Website design By BotEap.comOnce scammers have your social security number, they look at your credit report and see whether or not you have a good potential mark. The higher your credit score, the better, because it means you can get a very large loan. Website design By BotEap.comMembers of the ‘investment company’ approach those with better credit scores with a potential deal on a million dollar house they claim is worth $2 million dollars. Website design By BotEap.comThe investor who enters the deal is forced to take out a jumbo mortgage loan for a supposedly low price of $1.5 million and the ‘investment’ company will do all the work. They claim that they can negotiate the sale price of this house from $2 million to just $1.5 million. Once the deal closes, the investor should be able to sell the house for its full value of $2 million dollars and make a nice profit. Website design By BotEap.comHowever, scammers won’t tell you that the house they agreed to buy from you is only worth $1 million at full market value and that’s what it’s actually selling for. The investment company takes your loan and buys the house for $1 million and then gets away with the excess $500,000. The brand gets a house that they overpaid $500,000 for and the scammers only had to buy him lunch. Website design By BotEap.comSimultaneous closing scams to illegally move houses
There are a few ways that scammers can make fraudulent sales with a simultaneous closing. You may have already heard that title companies are refusing to accept simultaneous closings due to recent real estate scams. Website design By BotEap.comIt’s best to avoid using a simultaneous closing these days when investing in real estate. You will still be able to make a profit without a large investment using other real estate wholesale methods. Website design By BotEap.comDon’t worry too much about whether or not your process makes home swapping illegal, as long as you do your research, follow the letter of the law, and avoid these scams. Please note that these scams listed are just a few of many that scammers have come up with over the years. If there is a way to do it, scammers will find it and take your money.