How to Avoid Getting Ripped Off When Buying Turn-Key Real EstatePosted on April 4, 2014 by
Make money while you sleep…
There’s nothing sweeter than making money while you sleep by owning free and clear residential real estate. Think about it, you spend a third of your life sleeping, imagine how much more income you can make if you have passive Cash flow.
Sounds great doesn’t it…
“Making money while you sleep”, “massive passive income”, “owning free and clear residential real estate”…it all sounds great, still we have all heard the stories of people that lost their shirts trying to make this a reality. You can avoid getting ripped off by asking 12 critical questions. The key to making successful turn-key investments it knowing the questions you need to ask.
Question #1: Do the principals actually invest their own money in cash flow real estate?
Would you buy a Mercedes from a guy who drives a Chevy? Ask them what they invest their money in. It’s quite common in the real estate teaching world to find guru’s that make their money from teaching and not by following their own teachings.
I don’t know about you, but I want to invest with someone who demonstrates the belief in their offering by actually putting their own money into it too. If not, shouldn’t you ask them why not?
Question #2: Does the company make the majority of their profit on the initial transaction?
Upon selling you the house, will they immediately collect most, if not all, of their profits?
It is critically important that you investigate and understand this before you invest. This one question exposes the biggest flaw in virtually every turn-key real estate operation in the country.
Why is this potentially a bad deal for you? Simple, the promoter who sells you the property doesn’t have any skin in the game. They’ve made their money and you’re on your own. They have little or no incentive to see that your investment is successful in the long-term.
Just think about anything you buy. Do you ever see the salesperson after the sale? Not usually, do you?
Think of all the cars you’ve ever bought. You never see the salesperson after the sale, do you? But when you go into partnership with someone, then you see them forever till the partnership is done, right?
So, ask the promoter if they make the majority of their profit on the initial transaction. If they say “yes”, just realize you’re talking to a salesperson and it’s safe to assume once the sale is done, the salesperson’s gone, agreed?
I insist on having a partner with an ownership mentality who’s watching out for both of our best interests all along the way. My partner gets paid when I get paid. Doesn’t that make so much more sense than trying to go it alone?
The other 10 critical questions…
There are 10 more critical questions you need to ask to ensure you don’t get ripped off. We will be hosting a free webinar in April that will go over all 12 critical questions. We are finalizing the date and event time now and will be announcing it on our events page soon. Please watch the webinar section of our website for details about this free webinar: www.AmericanIRA.com/Events.