Watch for the Red Flag

Here is a situation for you. Say you have some property that you have bought subject to. You have owned it for a year or two and there is some pretty good equity in it. We will even take it a step further. Now we are going to add to the situation. Let’s say you have a couple of properties like this. In fact many times, you still have to give them a little bit of cash to get moving. But keep in mind, if you used a private lender to do that, that option is no longer available. Now here is what many people question. This is where a red flag should go up in your head. This is where you need to be thinking clearly.nnIf you had a private lender you could not do that. nnIs there some back door that you have if something comes up like that so you could give it back?nnThe answer to that is no. Not unless you can move that private loan onto another property. Think about it. Think about it really hard. Bottom line, either way you have to pay it back. nMakes a case for your diligence before you go putting yourself at risk, doesn't it? nnIn fact by doing that, you are personally guaranteeing. What does this do? That changes the whole deal completely! What you should be thinking about is you! This should be your mantra!nnI want my due diligence done, I want title insurance, I want fire insurance, I want an appraisal and I want to know for sure what my value is, I want to know for sure what my repair costs are going to be. And lastly, I want to know what my marketability is going to be before I go putting myself at risk!n