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Minimizing Risk In Investing: Real Estate Fraud In 2014

by blogger1
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on Thursday, 01 May 2014
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While often underestimated, minimizing risk in investing is just as important as striving to make gains. So what can real estate investors do to minimize risk and ultimately increase their overall potential?

Choosing wholesaling as a real estate strategy and niche offers natural protection against risk. It really lowers risk as far as it can be hoped to do so. This is especially true when using leverage in the form of transactional funding and double closings.

However, property investors are also wise to defend themselves with LLCs, tax structures, and having good real estate attorneys on retainer in advance. Too many are leaving these elements to being an afterthought or only when they run into trouble. This is too late.

Preserving wealth in real estate investing is the number one financial rule of wealthy and sophisticated investors. Preserve your capital and you’ll be able to continue to see gains. However, more important than protecting capital is preserving freedom to keep generating income year after year. This is sadly where so many have become victims over the last decade.

There have been many victims of bank and real estate fraud over the last decade. While many might not feel any sympathy for those jailed for their parts, they certainly have become victims too. As the new real estate boom grows so apparently are real estate scams. Daily investors, Realtors, mortgage brokers and title reps go to jail, often leaving children without parents.

This makes one of the most important factors in minimizing risk as avoiding being caught up in fraud. There is no short cut or amount of money worth it.

Popular online real estate forums are packed with poor advice, people seeking advice on how to circumvent the law, and even boldly and foolishly bragging about how they have gotten away with it. Don’t just do it because everyone else is, or because you might get away with it. Don’t do it because real estate agents or bankers say it’s okay. They’ll be the first to throw you under the bus when they get busted.

With transactional funding, legitimate double closings, continued availability of so much undervalued property and rapidly rising home prices, there is plenty of opportunity to make incredible money from wholesaling houses with little risk. So enjoy it, but do it right and preserve your wealth and wealth making abilities.
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