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Uploaded by: euinvest101 on May 1, 2012
Shaan Stevens -Why Real Estate Options Are Less Risky
Why Real Estate Options Are Less Risky, More Profitable
to finance and close the deal. The reason for this intense scrutiny is that
lenders and title and escrow agents are constantly on the lookout for fraudulent
property-flipping schemes, which cost them millions of dollars annually. Most
of the property-flipping shenanigans involve collusive relationships among
investors, property appraisers, and mortgage brokers. In a typical property-
flipping scam, a dishonest investor:
1. Buys a low-cost run-down property in a low-income neighborhood.
2. Buys an inflated property appraisal report from an unscrupulous property
3. Steers an unsophisticated buyer to a crooked mortgage broker, who prepares
a fraudulent loan application to obtain a mortgage or deed of trust
loan from an unsuspecting lender to finance the purchase of a grossly overpriced
This type of fraudulent property-flipping transaction usually ends up in
foreclosure because the new owner cannot afford to make the loan payments and
pay for needed property repairs, too. And in most cases, the American taxpayer
winds up getting stuck paying off the government-backed loan that was used to
finance the scam.
Five Obstacles That Investors Must
Overcome When Flipping Properties
To read most of the property-flipping books, you would think that flipping a
piece of property is as easy as changing clothes. I hate to be a spoil sport, but in
reality nothing could be further from the truth. The fact of the matter is that
most authors fail to point out the potential deal-killing obstacles that investors
must overcome when using conventional property-flipping strategies. And they
never bother to mention anything about:
1. Title seasoning.
2. Loan seasoning.
3. Property appraisals.
4. Overzealous scrutiny from lenders and title and escrow agents for possible
5. Stringent f
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