Real estate scams can sink their claws into even the most experienced real estate investors. Seasoned scammers can use tried-and-true tricks to reel you in before you know what is happening to you. Then, they run off with your money while you stay behind, paying the price. Watching money go down the drain that could have gone places.
Luckily, it doesn’t have to be this way. You can take steps to protect yourself from real estate scams that lurk just below the surface. The property managers in North Virginia will help you navigate the murky waters of real estate investing below.
Types of Real Estate Scams
Unfortunately, real estate scam artists have multiple tricks up their sleeve to get you at your most vulnerable. Luckily, we’ve singled out the most popular ways they try to cheat you below.
General Investment Training Scams
Investment training scammers usually promise their “patented,” “proven” expertise will show you all you need to know about profiting from investing, as a general practice.
Such real estate scam artists often claim that their “secret” investment knowledge will completely change your life, so much so that you can quit your job altogether. They boast success stories of graduates who are swimming in money.
However, in reality, many of these courses just give you beyond basic, untransferable skills. Also, the success stories that attracted you to the training in the first place are often fake, spun-together tales.
Real Estate Investment Training Scams
Real estate investment training scammers try to sweep in as the solution to all your real estate investing problems.
They swear up and down that their training and coaching programs will transform your investment into a guaranteed breadwinner. Even more, you’ll purportedly earn that dough without experience, effort, or investment money. Sometimes, they promise to coach you throughout every part of the process, but they usually don’t follow through.
Their ads or websites may have convincing testimonials to back them up, even from celebrities and the organizers themselves. Like other real estate scam testimonials, these are usually fake.
To supposedly boost your earning potential, real estate scam artists often push further services or products that “guarantee” your success or high profits.
Many people who spend their hard-earned dollars, even thousands, on this training find that it is worthless. Wide-eyed investors never see their funds come to fruition. Most people never get back the money they invested.
While we listed the most common types of real estate scams above, it’s critical to note that other scams can, and do, adopt similar tactics.
Real Estate Investment Scams
Real estate investment scammers often say you simply must buy into their effusively described property development. They can boast that it will be a cash cow, luring you in with a shiny billboard promotion, telemarketing call, website, social media post, or other types of ads.
However, the shine fades when you invest in the project and find that it takes years to finish or doesn’t finish at all. Or, in the best-case scenario, it is built with paltry facilities that you wouldn’t want to show off in your portfolio.
Additional Signs of a Scam
No matter what type of scam different con artists try to pull, many of them have the same, old, tired tactics. Be on the lookout for several tactics they’ll try to use against you.
Claims of “Guaranteed Results”
Each investment comes with an amount of risk, and your estimated return on your investment reflects this. As such, investments that seem absolutely destined to succeed can have predictably bland returns. On the other hand, investments with high risks may have high returns—or losses. It’s always a gamble. If a scammer tries to instill in you black-and-white thinking, you should be concerned.
Scammers Hide Crucial Details About the Investment
If your point of contact refuses to share details or documentation about your investment, that means they’re hiding something sketchy. So, you should always ask questions to clarify their true intentions.
The Other Party Uses High-Pressure Sales Tactics
If the other party pressures you to strike while the iron is hot, now or never, and claims the clock is ticking, that’s an investing red flag. This means they don’t want you to think your decision through.
They Try to Come Across as Overly Friendly
Real estate investors can have their gut instincts deactivated by the “halo” effect. Here, a real estate scam artist does their utmost best to come across as likable or reliable.
However, people can put up personas with little substance behind them, so you should check out objective qualifications. Even if you already know the person on a social level, you should always find out whether your connections are truly licensed or have encountered issues with regulators or investors.
Reciprocity-Encouraging Endeavors
Real estate scam artists often try to entice investors through free investment seminars. Their logic is that, if they do you a small favor to help you, you will want to return the favor. They bank on your goodwill to move forward – but don’t give in.
You should always try to separate your emotions from your decision, and it might take time to cool off. Furthermore, always ensure their offerings are a good fit, and that you comprehend the extent of what you are buying into.
They Use Peer Pressure
When you see pitches that emphasize how everyone is getting involved, and you’ll be missing out if you don’t, too, groupthink can take over your brain.
Don’t let it. Before making any big moves, consider whether you are genuinely interested in the product, or just the hype surrounding it.
How to Avoid Scams
There are simple steps you can take to avoid money-stealing scams. A little due diligence can go a long way in protecting yourself. A few best practices can save you a lot of misery.
Investigate Investment Initiatives
Browse online for the company or program name, as well as keywords like “review,” “scam,” “fraud,” or “complaint.” Other peoples’ stories of company encounters can signal to you to potential issues.
Verify Positive Testimonials Yourself
Never channel funds into an investment based solely on an individual’s claims or reviews from a newsletter or blog. After all, real estate scam artists can fabricate stories or testimonials about non-existent clients’ successes. Or they can cultivate the impression that their investment opportunity is state-of-the-art. These may sound like appealing pieces of proof but don’t believe them until you can verify them.
Stay Skeptical of Unsolicited Offers
You should be particularly skeptical if someone comes up to you, unannounced, and offers an unsolicited pitch to invest in a property.
If you can’t find recent financial materials about the project from independent sources, it could be a ghost operation, where they get your money and go off into nowhere. Also, if they offer foreign investments, be careful before opting in. With these projects, it’s harder to trace any misdeeds that might occur.
Go with a Trusted Property Manager
Once you are ready to lease out your properties, property management can be one less thing you have to worry about. With our years of experience and proven track record, investors can rest assured they are partnering with an expert in the real estate industry. Best of all, we can handle the logistics of rent collection, move-in and move-out reports, and so many other everyday nuisances. We can take these burdens off your shoulders. Contact us today to take back your time and energy.
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