Perform Due Diligence When Buying Real Estate
The Internet is one of the best tools of all time for real estate investors. It is the best place to perform due diligence. This is especially true for investors in counties where property tax schedules are available online. If your county property records are available online, you can quickly find out who owns the property, when it was purchased, how much it costs, and its value for tax assessment purposes. You can almost instantly get the name and mailing address of the current owner, the sale price and dates of the most recent and previous sales, and the taxable value of the property broken down by land and improvements. You can also get a site map showing the improvements to the property, along with the property’s tax account number.
Many investors who perform due diligence on a property do not verify the property owner at the same time. You need to know as much as possible about the owner of the property. You need to determine if there are any unusual factors, such as bankruptcy or divorce, a trial on criminal charges, etc., or anything else that might put you in a better bargaining position.
Google is your friend. Google is the best place to do due diligence on a property. It’s also a good idea to Google the property owner’s name and see what you can find out. While you’re at it, you need to enter the address of the property into Google. Many times you will find all the information about previous listings in the multiple listing service for that particular property.
You should also check with state or local environmental authorities when purchasing property. You certainly don’t want to buy a hidden toxic waste dump. Under current federal law, environmental responsibility is shared by the new owner of the property. Have you ever wondered why you see so many empty gas stations? It’s because the ground beneath them has been contaminated and no one wants to buy the property and accept that responsibility.
When buying a property for investment purposes, trust no one, check everything and assume nothing. Do not rely on the information found on the multiple listing service to be true. This information was placed there for the sole purpose of selling the home.
