Business Opportunities - Real Estate
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The legal definition of real estate implies that it includes land with permanent fixtures attached to that land. Real estate differs from real property, which refers to ownership rights. Real estate has nowadays become a lucrative investment proposition. It needs huge investment and it has taken on the status of a major industry. There are different types of real estate businesses, which have burgeoned. These include appraisers, brokers, developers and property managers as well as relocators. They further specialize in residential, commercial or industrial property.
Many people are investing in real estate in a big way as a way to earn a good income in a short time. As a result, there is a proliferation of fraudulent schemes. Several middle-class investors have frittered away their earnings in dubious real estate schemes. People end up taking loans they cannot pay back and lenders end up with exaggerated mortgages. Real estate investment has turned into a front for money laundering and tax evasion. One must therefore watch out for such shams. A common fraud is property flipping where one buys property at a low price and then resells quickly at a higher price, using false statements to get inflated loans. This can be avoided if one checks prices of comparable properties, using one’s own appraiser. The lender must also guard against mortgages, which are not aged.
Another scheme is to use two sets of settlement statements. One is to the seller indicating the correct value and a second false one to the lender reflecting an exaggerated selling price. It is done to get more loan amount for a lesser value property. Once the loan is sanctioned, the excess amount is divided among the vested parties. Agents also help people to get false credit and employment records to get higher credit. Using false tax returns and giving wrong income details are other types of rackets employed to earn money. Equity skim fraud is committed when a person takes high value loan at a lower interest rate on the pretext that he will be a resident in the house. On the other hand, he will let out the premises on rent and keep the money during the collection and foreclosure action. Real estate is a huge money-spinner, but one must be wary of con men that are ready to make a fast buck from the unsuspecting investor.
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