In our series, Finding the Right Property for Your Goals and Budget, you’ll learn how to find a property that is the right fit for your portfolio. We take you through every single step and show you how to avoid a bad deal.
You’ve probably seen properties being sold “as is.” What does that mean exactly?
There can be vast differences in the conditions of “as is” properties.
They can be a good deal, especially if it gets you into an area you’ve been priced out of. However, some “as is” properties come with troublesome issues that could cost you more in the long run.
If you do make an offer on such a property, you need to take certain steps to protect yourself. Here’s how:
Understand What “As Is” Means
Basically, “as is” means the buyer will purchase the home from the seller in its current condition. The seller has no intentions to do any repairs to the property before they sell it.
The home could be in pristine condition or it could be a major “fixer-upper.”
Understand Disclosure Requirements for Different Jurisdictions
Some states require sellers to disclose any defects they know about in a property for sale.
If sellers know of something but don’t disclose it, that is considered fraud and the sellers would be liable. Sometimes it is difficult to prove if sellers really were aware of any defects or questionable conditions.
That’s why it is important to get any disclosures in writing to protect you in the long run from fraudulent information.
Steps to Take if Seller Is a Nonoccupant
If the property was owned by someone who didn’t live in the home recently—whether it was a landlord who had been renting out the property, an estate selling for a deceased family member, or even a bank in a foreclosure sale, they can’t disclose something they didn’t know about. So be more vigilant since there could be more wrong with the property than what has been disclosed.
Take It, Or Leave It
Overall, an “as is” property could be a fantastic deal as long as you take the proper steps to protect yourself and do your due diligence.
You’ll also want to completely understand what you’re getting yourself into if it is a property that will need lots of work. Make sure you will have the time and the money in your budget to undertake any major repairs and still get your targeted return.
I hope you’ve enjoyed this Finding the Right Property for Your Goals and Your Budget series. Here’s a recap of the topics we have covered:
Week 1 — Questions to Ask Yourself Before You Start the Search
Before you do anything, evaluate your wants and needs for your portfolio. This will be the very first, but most important, step on your journey. Your answers will set you on the right path!
Week 2— Are You a “Property” or a “Location” Person?
Usually, people tend to lean toward one or the other — being a “property person” or “location person.” The reason we ask this is that it’s rare to find the perfect property in the perfect location within budget. So you need to figure out where you’re willing to compromise.
Week 3 – Steps Investors Skip When Purchasing a Property
To make sure you end up with the property that best fits your plan and budget, you need to make sure things are done correctly. This article will go over steps you need to take that can lead you to that “right property”.
Week 4 – How to Finance Your Purchase
Most investors are not newbies when it comes to mortgage loan options, interest rates, credit scores, and financing in general. This article will go over why it’s important to get funding, whatever type you choose, lined up so that you can move forward quickly if you want to make a serious offer on a property.
Week 5 – Putting It All Together
These three factors – budget, location, and criteria — are intertwined and play a key role in finding the right property. This article explains how these factors influence each other, and how “putting it all together” is essentially your roadmap for your property search.
Week 6 – What You Need to Know About Schools, Crime Rates & Demographics
This article is a great starting point on how you can best search for properties based on school, crime, and income rankings of certain areas and why that is and is not always a determining factor for the success of your property.
If you are thinking about purchasing over the next few weeks, months, or even a year or two from now, I’d love to help you find the right property.
Email me and let’s get started on adding the next (or first) property to your portfolio!