Most Title Problems Are Correctable
A valid strategy in real estate investing involves the purchase of properties at a discount because they have title problems or a clouded title. The investor can hopefully purchase the property below value, correct the title problems and then sell it at a profit.
These clouded title issues could involve:
- Federal, state or local tax liens
- Liens for work done on the property
- Missing heirs with possible claims on the property
- Boundary or survey disputes
- Other claims on ownership
The critical aspect of this investment strategy is to be sure that there is thorough research into the title problems, preferably by a title or abstract company or attorney who specializes in title searches. Once you've identified the problems, then you need a qualified attorney to give you an accurate idea of the cost to correct them. If doing so still leaves you with a property you own below its real value, then you probably have a good investment.