Real Estate Investors Beware! Those of you who are investing in bank foreclosures (REOs) or purchasing properties at auctions, you must be vigilant with regard to illegal squatters and renters. There are two categories involved in these frauds. Those who illegally squat and those who pretend to own property so that mislead people into renting the properties from them.
These fraudsters are researching foreclosed properties, especially those that are abandoned. Some squatters break in and move their entire family into these locations. When the new owners show up to gain access and show the property to bona fide prospective purchasers, they justify their existence by claiming to have leased the property from an person claiming to be an owner.
The other type of scam is when the fraudsters act as the owner and rent the property to unsuspecting tenants in an effort to steal their deposit and their initial payment of rent. By the time the rightful owner is made aware, the crooks made out with tenant’s cash and two parties remain to deal with their conflicting situation.
Unfortunately, for you the investors, in both scenarios, the most likely solution would be to perform a tenant eviction. This means more unexpected costs and more importantly, loss of time.
In order to avoid, these situations we recommend that you place additional security at your properties by making sure that all locks are renewed. Perhaps, activate an alarm system, and re-secure the doors with additional bolts and locks. Some investors are immediately renting these properties to transient tenants. At the very least, investors need to highten their awareness and prepare for these potential issues. It could make the difference between a good investment and a terrible one.