In the summer 2024, my wife and I made a trip to southern Arizona. While the primary purpose of our trip was to visit family, we also did a little sight-seeing there. One of the places we visited is Kartchner Caverns State Park near Benson Arizona. While the caverns there are not as well known as places like Carlsbad Caverns in New Mexico, they still are a beautiful sight and worthy of a visit if you are in the area. One of the things that was fascinating was a truth that our tour guide shared with us: there is a large mountain behind the visitors entrance. When we were inside the caverns, the tour guide revealed the truth that we were under that mountain peak.
I share that story to make a point: you never know what is under something, whether it be a thing of beauty or a thing of ugliness, unless you look.
I think that point is true when we look at any piece of real estate or any real estate note. While the picture of property or the numbers on a real estate note might peak your interest, you need to look deeper. As the old saying goes, “You can’t judge a book by its cover.” Go deeper and look deeper. Look below the surface. Here are a few things I think are important to look at beneath the surface for either a real estate note or a piece of real estate property:
THE NEIGHBORHOOD AROUND THE PROPERTY- Whether you are considering the purchase of a real estate note or a piece of real estate property, take a look around the house. Is the property in a good, safe neighborhood? Is it in an area where the crime rate is high? Do the area property owners take pride in home ownership?
THE PAPERWORK OF THE PROPERTY OR NOTE- If you are considering buying a real estate note, does the property have an unclouded chain of title? Does the current borrower of the note have a good payment history? Are the property taxes current or are they delinquent?
THE PROPERTY ITSELF- Whether you are considering buying the property or purchasing a note, do you have a recent Broker Price Opinion on the property? Have you or an agent recent rode by the property to at least do an exterior extension of the property to see what is the condition of the property?
Yes, you cannot always judge a book by its cover. That is true not just for books, but also for real estate property and real estate notes. Do look beneath the surface. Best wishes in all your real estate pursuits. – R.L. Wall