Part 2 of 2 Now that we have done with scrounging into the history of our potential property, it is time to learn what else needs to be covered.
Once you have researched the recorded logs of the parcel, due diligence must also be done on the owner of the property, preferably before meeting them.
You want to know as much as you can about this person with whom you may be doing business.
Have they ever been arrested or imprisoned? Have they ever filed for bankruptcy? Do they have a reputation in the neighborhood? Have they been divorced? Are they a known liar? Just type the owner's name into a major Internet search engine and see what comes up, keeping in mind that there may be thousands of people with the same name.
I realize this is something like digging up skeletons in other peoples' closets, and the results certainly should not impact your perception of the individual as a person; you are not doing this for any malicious reasons.
You need to protect yourself and your business.
Furthermore, life events can impact how a person makes their decisions, which may impact you.
It may also help you determine exactly how motivated a seller they are.
Now it is time to go to the property and check it out physically.
This consists of looking around the neighborhood: does it appear that building, safety and health codes are enforced? Are zoning laws adhered to? Is there proper drainage for storm water, or will the streets flood? Is the building in a flood zone? Is it easy to get to from major roads and from different directions? Are the surrounding buildings well-kept? What school district is it in? Does the township keep the roads cleared of debris and snow? You may decide to have a chat with some of the neighbors or business owners in the area to get a feel for the environment.
It is good to know that parcels of land are identified by accessor's parcel numbers, appraiser's folio numbers, and tax identification numbers.
This is particularly useful when you are trying to check up on a property but are not having much luck with just a name or address.
If you can provide one of these numbers to a county clerk or other worker, they may be able to help find information that was hiding before.
All of the public information you will need can be found through your state and city's websites of public records, through the city or county clerk's office, and through a property tax collector.
You also want to be sure to call code enforcement agencies in the area and make sure that the information you have on an address is correct.
They will have the most up-to-date records regarding code violations.
If you are having trouble finding the owner's mailing address on the internet, use your imagination and think of where else their name and address might be registered.
For example, voter registration offices, state and federal inmate records, recreational license records (hunting, fishing, boating), at the DMV, registries for doctors and attorneys, and Social Security Administration Death records are some great places to search for your property owner.
Due diligence is a hugely important step that many investors forget about, or do not perform fully.
However, it can be quite scary if you find that you missed a key piece of information just because you were being lazy.
My advice is to find the websites that pertain to the areas in which you invest, and bookmark them in your Internet browser.
Then you can take just an hour or so every deal and do some thorough research on something which could make - or lose - you thousands of dollars.