Law Office of

HENRY B. LaTORRACA

Civil Trial Attorney

Real estate investing is not easy money

| Feb 18, 2016 | Uncategorized |

There are a lot of people who have gotten rich by investing in California real estate. However, success in this field requires a lot of research and a big time commitment. A person who is drawn into real estate investing after hearing about other people’s success stories could end up making expensive mistakes.

Many people get into real estate investing thinking that they will make money through rental income. Others plan to turn a big profit by selling a property that they bought for a price that is well below the market value. While both of these investment plans can work, finding a good deal on a property is harder than most people think. Because there is a lot of competition in real estate investing, good deals are usually found by word-of-mouth rather than advertisements. If an investor is planning to resell a distressed property after fixing it up, it is crucial that they don’t overpay.

When a person is investing in rental properties, the expected cash flow is very important. Some people believe that the monthly rental income for a property should be around 1 percent of its purchase price, but others say that 1 percent won’t be enough to cover expenses and earn a profit. Though it generates income, a rental property has many costs like property taxes, insurance and utility fees as well as repair bills.

A person who is considering a real estate investment opportunity may want to meet with an attorney in order to get an assessment as to whether it has a good chance of becoming profitable. Legal counsel can also see if there are any issues that could be problematic, such as title disputes.

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