Real Estate Investing Mistakes
Many real estate investors are savvy and practical, but often, it can be very beneficial to supplement their busy life with an attorney who looks after details and ensures everything runs smoothly.
Below is a list of common real estate investing mistakes to avoid from a Real Estate Attorney’s perspective.
Mistake #1: Moving Property In & Out of a Trust Without an Attorney
Deeding property between family members often leads to title issues when selling, which is something we want to avoid.
An example of this would be property thought to be owned by a son after their father’s death but is actually still in the father’s trust, this means the deed was not executed correctly.
Another example would be family deals in general, a common misconception is that you don’t need a lawyer to draft a deed, especially when you’re a D.I.Y.-er.
Mistake #2: Buying Property on Land Contract Without a Title Company
A common mistake, especially in this market where a lot of land contract deals are going on, is buying on a land contract without a title company. Many people think with Land Contracts that you “don’t need a title company”. In actuality, title companies are recommended so you have a neutral party who will handle title work and hold the deed to be issued after the completion of terms. This is especially important because many people do not know where a seller will be in 10 years, so you will want that neutral party to hold the deed.
Mistake #3: Not Checking Local Registration and Certification Requirements for Landlords Before Investing
We recommend getting a feel of the local laws first. This includes calling local offices to see what permits are required, and things of that nature. Many cities vary in regard to landlord requirements, which can be burdensome and interfere with profits. An example of these is lead clearance reports, registering property, annual rental certificates of compliance, etc.
Mistake #4: Not Checking Condo or H.O.A. Bylaws Before Purchasing
Many H.O.A.s and condo associations specifically prohibit renting short- or long-term, or renting for less than 30 days if operating as an AirBnB, some will enforce more readily than others.
Experienced Real Estate Attorneys | Fausone & Grysko, PLC
If you are a real estate investor and have questions on investing mistakes to avoid in Michigan, we here at Fausone & Grysko, PLC can help. Contact Business and Real Estate Attorney Robert C. Pollock today at (248) 912-3213 or send an email to receive a free consultation.