What Is a Real Estate Exit Strategy and Why You Need One!

Exit strategy

Exit strategyJust as a great deal of planning goes into crafting a business plan, so too must an equal amount go toward preparing a solid exit strategy. By having a robust exit plan, you can hedge against the occasional bad purchase and maximize the total return on your investment when the time comes to divest.

The more exit strategies you can come up with, the more control you may have over external forces. For instance, if you purchase a house to flip and find yourself stuck with a property you cannot sell at a profit, you may rent it out instead and protect your investment.

In real estate investing, you should hold on to properties that best suit your goals and divest yourself of those that do not. When formulating goals, make sure to follow the time-honored S.M.A.R.T. model, which stands for goals that are Specific, Measurable, Attainable, Realistic and have a Timeframe.

When divesting, the best way to go about it is to spread the sale of your properties over a number of years so as to minimize capital gains taxes. If possible, try to sell assets that are at least a year old so you can qualify you for the long-term capital gains tax rates instead of short-term capital gains tax rates. In addition, by strategically harvesting gains in certain tax years, you can potentially reduce your tax liability. Many investors will purposefully await years in which they fall into a lower tax bracket to realize capital gains on their investments.

Here are some common property investment exit strategies:

Sell and Walk Away: If you go this route, keep in mind that you’ll be looking at capital gain taxes. Investors who can bide their time are more likely to maximize returns as they are able to harvest tax gains, make improvements and repairs to increase home value, and take advantage of favorable market conditions.

1031 Tax Deferred Exchange: To minimize capital gains taxes, some investors opt for a 1031 exchange and move all of their equity into a like-kind property. Like-kind properties are real estate assets of a similar nature that can be exchanged without incurring any tax liability under Section 1031 of the Internal Tax Code.

Lease Option: A lease option is an agreement that gives a renter a choice to purchase the rented property during or at the end of the rental period. This is a great option for investors who want to exit an investment in the near future but do not want to rush.

Seller Financing: Seller financing is a real estate agreement where financing is provided by the seller instead of a traditional bank or lender. These arrangements typically include a down payment of at least 30% and a balloon payment due from two to five years. While it allows move a home faster and get significant return on the investment, it is not without its risks. A buyer may default on the payment forcing you to take the property back.

Cash-Out Refinance: If you have equity in a home, a Cash-out Refinance is a method you might consider that allows you to both refinance your home and borrow money at the same time. A cash-out finance replaces your existing mortgage with a new loan with a higher balance, sometimes with more favorable terms. The difference goes to you in cash so you can perform upgrades to your home, consolidate debt, or for other financial reasons.

Do you have any questions about real estate investing? RLG has the tools and experience to guide you with your personal and investment properties. Call us today to learn more and experience firsthand the dedicated, personalized customer service and undivided attention that RLG has to offer!

How to Find Motivated Sellers

Motivated sellers

Motivated sellersThe primary objective of real estate investors is to find motivated sellers from whom to buy homes at discounted prices. But what is a motivated seller? In a nutshell, motivated sellers are people who want or need to sell their home for a host of reasons. Whatever their motivation may be, these sellers are most often willing to agree to a lower offer price or discount in exchange for a quick close.

Here are some scenarios where real estate investors are more likely to encounter motivated sellers:

Foreclosure

A foreclosure occurs when a homeowner is no longer able to make mortgage payments as needed, which allows lenders to recoup the balance of the loan by forcing the sale of the property. When a foreclosure looms large, homeowners will usually seek to offload the property in order to repay the lender and avoid negative hits on their credit history. This is the best time for investors to negotiate and snap up a pre-foreclosure home.

Delinquent Taxes

When homeowners fall behind on taxes, many will list their home and resort to the sale proceeds to repay overdue taxes. Note, however, that once the local authority places a lien on a property, it cannot be sold or refinanced until the taxes are paid and the lien removed. Investors are allowed to purchase property tax liens from municipalities and collect the payment themselves. If the owner cannot pay the lien by the deadline, the investor has the authority to foreclose on the property and assume ownership.

Distressed Property

If a homeowner cannot afford to maintain or repair a property, they will often sell it in its current condition for a discounted price. There are numerous distressed homes available on the market. It is important that investors establish the extent of the renovation far in advance as the repairs may sometimes be too costly.

When determining the maximum price you should consider paying for a property, many real estate investors abide by the 70% rule, which states that the highest price you should pay for the property is 70% of the ARV minus costs of repairs. Imagine the after-repair value (ARV) for your property is $100,000, and it needs $25,000 in repairs, then the most you should pay for it is $45,000.

Relocation

Whether it be due to a sudden job loss, a career change, or to care for ailing relatives, people are constantly on the move. Real estate investors can profit from this opportunity to close great deals. As few people relocating have the means to afford a second mortgage in a different city or part of town, these motivated sellers will put their home on the market and typically favor immediate, all-cash offers.

Are you interested in learning more about real estate investing? RLG would love to help you find a suitable investment strategy for your goals! Call us today to learn more!

5 Ways Real Estate Investors Can Make Money

Real estate investors

Real estate investorsReal estate investors can profit off their properties in myriad ways. The best investment strategy ultimately comes down to individual short- and long-term goals. Some folks chase cash flow while others go for appreciation. Either way, as long as you know the tricks of the trade and your local market, you can generate income in real estate.

Following are some of the most common strategies real estate investors pursue to make more money from their portfolio:

Rent Out

While flipping houses provides quicker returns on your investment, renting an investment property can provide passive income over a long period of time. The key to success is to be able to retain high-quality tenants and regularly maintain the property. If you don’t want to deal with the hassle that comes with being a landlord, you can hire a property management company to take care of everything – from screening potential tenants to completing any repairs and maintenance needed.

Buy and Resell

There is no doubt there is much money to be made in the fix-and-flip market. Investors typically buy a property at a discount because of its condition, get it repaired, and resell it at a higher price. This strategy not only brings tremendous potential for profit but also a great deal of satisfaction from seeing through a makeover.

The best piece of advice here is to understand the costs and process and to have a sound grasp of your local real estate market so you can recognize a good deal and confidently project how much the property can sell for. Overall, an investor should pay no more than 70% of the after-repair value (ARV) of a property minus the repairs needed. The ARV is what a home is worth after it is fully repaired.

Try Short-Term Rentals

Platforms such as Airbnb and VRBO are just a few examples of numerous platforms that allow homeowners to monetize their vacation rentals. To compete against several other properties in your area, it is essential to first understand the ins and outs of the short-term rental industry. While short-term leases may offer less stability than yearlong agreements, rates are oftentimes much higher. When managed efficiently, a short-term rental property can be incredibly profitable.

Invest in Commercial Real Estate

While the risks of investing in commercial real estate (CRE) are typically higher than those of residential real estate, the prospects of large margins of profit can be enticing. It is important to understand that CRE comes in a wide variety of asset types, ranging from industrial buildings to office and retail buildings to mixed-used properties and warehouses. As your portfolio grows, you can beef up your net income through upgrades and renovations.

Hold Events

Another great opportunity in real estate is to monetize vacant properties as event venues. Whether you plan to hold weddings, birthdays or conferences, the location of your property is key if you are considering going down that route.

Are you interested in learning more about real estate investing? RLG would love to help you find a suitable investment strategy for your goals! Call us today to learn more!

Are You Flipping a Home? Read This!

Flipping homes

Flipping homesAs more and more people turn to home flipping as an investment strategy, the risks inherent to this line of business can be daunting if you go it blind. It’s incredibly important to have a solid understanding of your local housing market and costs so you can recognize a good deal and confidently project how much your fixer-upper can sell for. This will set you apart from your competition and put you on a path to financial freedom.

It’s a good idea to work with a real estate agent who can guide you throughout the process and a general contractor to examine the property. As a rule of thumb, investors should pay no more than 70% of the after-repair value (ARV) of a property minus the repairs needed. The ARV is what a home is worth after it is fully repaired.

Create a Budget

As with any venture, a business plan that includes a budget is a no-brainer. One of the best ways to stay within your budget is to record all expenses and allow enough breathing room for unexpected costs. Consider aspects like how much money you are able to put toward a down payment, how much money you need to borrow, how much you are looking to make from the resale, and how much time you plan to take for the renovation.

DIY Where Possible

While works such as plumbing, electrical, and roof repairs are better left to professionals, there are a number of ways you can cut costs without cutting corners. Some DIY projects anyone can try their hand at include pressure-washing driveway and pathways, repainting front door and walls, and upgrading bathroom hardware and fixtures. Get creative and save money!

Speak to a Contractor

Successful real estate investors boast an ample network of trusted service providers, such as plumbers, electricians, roofers, carpenters, and painters with whom they partner to snag competitive prices.

It is important to put yourself out there and build these relationships over time. Note, however, that pricing is only one factor to consider. You’ll want to make sure that the contractors you team up with have the appropriate certifications and licenses as well as an untarnished reputation.

Are you interested in learning more about real estate investing? RLG would love to help you find a suitable investment strategy for your goals! Call us today to learn more!

5 Must-Know Tips for Home Flippers

Home flipping

Home flippingFlipping properties can be an immensely profitable line of business. Turn on any home or DIY network or browse social media platforms and you will find thousands of folks showcasing their home flips. While the business is equal parts satisfying and lucrative, it requires careful planning and a considerable amount of elbow grease.

If you are thinking about flipping a house as an investment strategy, make sure to follow these tips:

Do Your Due Diligence

As more big-shot players enter the picture and manage to cut down on delivery time and costs, the competition is nothing short of fierce. But even large corporations are prone to misjudging the housing market with Zillow being the latest company to halt its home-flipping business after reporting continued losses.

Be sure to do thorough research of every aspect of the process and the property you plan to flip. This includes ordering home inspections, assessing basic facts about the neighborhood, looking into the history of the home, understanding tax and zoning laws, speaking with an insurer about insurance costs, and staying on top of housing market trends.

Get Multiple Quotes

Don’t settle for the first contractor who claims they can do all the work. Getting multiple quotes from reputable contractors are key to keeping costs down and turning a profit. Additionally, when hiring contractors, it is important to check if the prospective company offers their workers proper liability and worker’s comp so you aren’t held responsible in the future for any alleged wrongdoings or accidents.

Plan for Unexpected Expenditures

No matter how meticulous you are in recording your expenses, there will be some that occur during the renovation that you cannot anticipate. By creating a budget that is too strict, you could be setting yourself up for failure. Make sure that your budget is flexible enough to allow for these unexpected expenses.

Decide on a Strategy

While many real estate investors will sell a house once it’s been renovated, some find that turning the property into a rental may yield more returns. Make sure to weigh your options and select one that aligns with your long-term goals.

Talk to a Professional

Education is a key factor in unlocking the benefits of home-flipping. With a specialty in residential investment property financing, Ridge Lending Group comes to you equipped with a vast portfolio of knowledge and experience suitable for all aspects of real -estate finance. RLG maintains a continued commitment to being the best resource it possibly can to its customers all while setting itself apart from other lenders as a leader in both education and technology within the lending industry.

The overarching goal of RLG is simple but powerful: to educate investors on the options that are best suited for their situation and help them achieve real estate investment success both now and in the future.

Are you interested in learning more about real estate investing? RLG would love to help you find a suitable investment strategy for your goals! Call us today to learn more!

4 Reasons to Buy a New Construction Home

New construction

New constructionFolks looking to break into the real estate industry will often face the question of whether to invest in older homes or new construction homes. While there no hard and fast rules, new construction properties have some unique benefits that may make them an attractive option for real estate investors.

Following are four advantages to new construction homes:

  1. More Appeal

Whether renting or buying, people love the feel of a new home and can more easily see themselves living in the space. In addition, new homes are more likely to be located where a growing segment of buyers want to live – the suburbs. The covid-19 pandemic has also helped accelerate this shift in preference as people have grown increasingly wary of touring occupied homes.

  1. Less Maintenance

While some investors enjoy buying fixer-uppers and taking on large-scale renovation projects, some people would rather invest in a home that may be ready to rent or sell as is. Old homes tend to have a lot more maintenance issues from bad insulation, plumbing, and wiring.

  1. No Upgrades Needed

New construction homes feature modern trends in design and functionality, including open spaces, laminate floors, and brand-new appliances. Replicating the aesthetics and contemporary luxuries in an older home can be prohibitively costly and labor-intensive.

  1. Great Warranties

Most newly built homes come with a builder warranty that covers items that are typically a permanent part of the home, like concrete floors, plumbing, or electrical work. While the length of the coverage varies depending on the component of the house, some builders give coverage for up to ten years for “major structural defects,” sometimes defined as problems that make a home unsafe and put the owner in danger.

Are you ready to plunge into investing in real estate? RLG has the tools and resources at its disposal to get you on your way and not waste a moment of your time. Call us today to learn more and experience firsthand the dedicated, personalized customer service and undivided attention that RLG has to offer!

5 Reasons to Stage Your Investment Home

Home staging

Home stagingHome staging is the process of arranging furniture and décor to showcase a home to its fullest potential. A professional home stager is similar to an interior decorator in that they have extensive expertise in planning and choosing colors, furniture, and accessories. They will also understand how to arrange your belongings in a way that best fits current trends and appeals to buyers. Stagers understand how a buyer will see your home and create a neutral space where anyone can see themselves living in your home.

A home stager begins by examining your home and consulting with you on what will make your house market ready. Their analysis will identify ways to highlight your home’s best features as well as make up for any shortcomings. Stagers will then recommend items that might be removed to create more space and lend advice on personal knick-knacks that may best be packed away during the sales process. Additionally, the stager may recommend repairs that may be necessary before listing your home.

Many home stagers will also have furniture, artwork, rugs, etc. to outfit your home so it will appeal to a wide range of tastes. If you have already moved out of the home you are selling, stagers will furnish it to allow a buyer to imagine themselves living in the space.

Following are five basic reasons to enlist the help of a professional home stager:

It Creates a Good First Impression

The first impression is the last impression when it comes to real estate as most homebuyers only get to walk through a home once before making up their minds. You want to make sure your property elicits positive emotions and imparts a favorable image.

It Makes Your Home Look Bigger

A home stager will help you declutter, remove your personal photos or mementos, and remove any obstacles that could be preventing natural light from coming in. By taking these steps, your home will appear much larger than you can imagine.

Your Home Will Appear Well Cared For

A well-tended yard and a fresh coat of paint are sometimes enough to make your home look its best. After all, no one wants to walk into a home that looks like it needs a lot of work and repairs done.

You Will Learn about Interior Designing

A professional home stager will guide you through the best practices and trends in interior design to make your home stand out.

Your Home Will Sell Faster

Home staging is the process of maximizing a home’s appeal to potential buyers that ultimately generates a faster sale. The numbers back it up. According to the 2021 National Association of Realtor’s Profile of Home Staging, 53 percent of sellers’ agents reported that staging a home decreased the amount of time the home was on the market.

Are you ready to invest in real estate and see the value it can provide? RLG would love to help you! Call us today to learn more.

A Framework For Assessing Liability In Business Email Scams

Wire Fraud – Statistics/Business. Laptop in the office with te

Wire Fraud – Statistics/Business. Laptop in the office with term on the display. Finance/Economics.

Written by Kelce S. Wilson, Ph.D.

Kelce S. Wilson, Ph.D. is a member of Grable Martin Fulton PLLC.

This article is for general information purposes and is not intended to be and should not be taken as legal advice.

 

A Framework For Assessing Liability In Business Email Scams

Business email compromise is a type of scam that targets individuals and businesses who use wire transfers for payments, such as by providing fraudulent instructions over email that result in a payor’s wiring money to a bank account that does not belong to the proper payee. That is, the individual or business who owed money (the payor) did pay, but the money went to a scammer instead of the individual or business to whom the money was owed (the payee).

Examples include requesting that a payment be made by wire transfer in lieu of a check, changing the bank account to which money is to be wired and, in some situations, identifying the bank account in the first instructions. There are multiple classes of BEC scams of which to be aware. These include misdirected wire transfers, bogus invoices and internal fraudulent requests, often ostensibly from company leadership, and some that steal data rather than money.

According to Federal Bureau of Investigation data, the number of BEC-related incidents and the amount of losses is increasing. In 2017, the FBI’s Internet Crime Complaint Center received 15,690 complaints with reported losses of $676 million [1]. By 2018, the numbers climbed to 20,373 complaints with reported losses of $1.3 billion [2]. In 2019, the numbers climbed even higher to 23,775 complaints with reported losses of $1.8 billion [3].

This is a greater than 50% increase in the number of complaints in only two years, with the financial losses more than doubling. More information is available from the FBI.[4]. BEC is a rapidly growing threat, so if you have not yet heard about it, or already know someone who has been victimized, it is likely that you soon will.

Many contracts do not specify responses to BEC events, although hopefully that is changing, and guidance from the legal system, such as via case law, is sparse regarding assignment of liability. Under what circumstances must the payor pay twice, under what circumstances does the payee lose the funds, and are there any circumstances in which the payor owes the payee a reduced amount?

Based on my own experience, which is admittedly not a scientific study, it appears as if the party with the greater bargaining power is the one that prevails, independently of whether it was the payor or the payee, and independently of who (if anyone) was hacked.

For example, if a large multibillion-dollar business is tricked into paying the scammer, rather than paying a small business that has already provided products or services, the larger business may just refuse to pay, thereby depriving the small business owner of a significant percentage of expected earnings.

Meanwhile, if an individual is tricked and fails to pay a business, the business may refuse to provide the product or service or turn the individual over to a debt collector that will motivate the individual to pay twice.

If settling liability always in favor of the party with greater bargaining power does not seem palatable, a framework for analyzing the degree of each party’s failure may be preferable for assigning degrees of liability.

A framework is proposed below, identifying six primary scenarios and the mistakes made (or not) by each party. The scenarios will be better understood, however, after explanations of why the scam is so easy, in some of the scenarios, and steps that maythwart a scammer’s BEC attempt.

Why It Is So Easy and How to Avoid It 

Scammers may use detailed transaction information, if they are able to obtain it, in order to make the fraudulent email appear to be coming from the payee. In some scenarios, BEC does involve actually hacking into the payor’s or payee’s email.

However, in many situations, no hacking is required at all. This is because the “from” field in most email apps is misleadingly named. The “from” field can be easily changed by the sender to display nearly anything, allowing nearly trivial spoofing of the apparent sender’s name.

For example, a hacker with the email address hacker@hacker_email_server.com can edit an outgoing email so that, when you open it, you see a name that you recognize, such as John Banker. If you do not look any further than the name that you recognize, it is possible to miss the incorrect email address following the name, e.g., JohnBanker<hacker@hacker_email_server.com>. Of course, you would need sufficient familiarity with the proper email address to become suspicious, even if you did see it.

The easiest prevention against a BEC scam is to not follow instructions received only over email regarding a bank or account number to which you should wire money. Instead, there should be at least two separate paths used to communicate payment instructions and changes to payment instructions.

So, if the payor receives an email with payment instructions, either original instructions or a change to a prior account, the payor should call the payee to verify the instructions using a phone number that the payor already had (i.e., not a phone number provided in the email with the payment instructions).

Hopefully, the payor will recognize the voice of the other person and will have previously used that same phone number in order to have confidence that it is valid. For large amounts of money, a physical letter may be warranted.

Using the second channel for payment instruction verification works for both the spoofed email “from” field situations and also situations in which the payee’s email actually is hacked in order to send the fraudulent instructions (so that there is no mismatch identifiable in the email address). If the payor identifies a spoofed email, and obviously declines to follow the fraudulent instructions, alerting the payee may still have value.

The scammer may also be targeting the payee’s other accounts, and alerting the payee enables it to alert its other payors to be watchful. If the email “from” field is not spoofed, the payee is then alerted that at least one account of its email system has been hacked.

A Suggested Checklist for Some Prevention Steps

  1. If you are an individual, do not follow instructions for wire transfers that you receive in an email. Pick up the phone and call the people whom you are to pay, using a phone number you already have (not one from the email), and speak with a person whosevoice you If you don’t know anyone there, that’s not a good position in which to have put yourself. Be proactive about speaking with people with whom you do business or expect to do business.
  2. Consider using digitally signed email and secure document delivery systems. Most information technology staff members will be familiar with these. If you are an individual, then ask your bank what systems it uses.
  3. Update your contracts and purchase orders to require that verification of payment instructions and changes be made over a separate channel than the one over which the payment instructions were For example, if the instructions came over email, make a phone call. If the instructions came over then phone, call back and/or send an email.
  4. Businesses should train their employees to do follow those contract clauses, and regularly test the employees, to ascertain whether the training is effective.
  5. The recipient of the instructions should initiate the verification, using contact information already known to him or her. If feasible, verify in person.
  6. The payor and payee should exchange contact information for each other over multiple channels (e.g., email, phone and physical address).
  7. The payor and payee should have enough familiarity with each other, prior to any fraudulent payment instruction changes becoming a possibility, that they can recognize each other.
  8. Update your contracts to identify BEC remediation steps, possibly using the scenarios identified below to allocate liability in order to calculate the amount of a second payment(if any).
  9. Create an email rule to flag email communications for which the reply to emailaddress is different than the from name or email address that is displayed.
  10. If feasible, two different people should look at all payment instructions, in case the initial recipient missed a clue that the instructions might be a BEC attempt.
  11. Businesses should register as many domain names as possible that are slightly different from the actual domain name, so that scammers/hackers cannot use an email with an easily missed misspelling, g., substituting the number “1” for a lower case letter “l”.
  12. Minimize public dissemination of organizational and personal information, when feasible, in order to prevent scammers/hackers from using the correct job titles or other convincing details in the fraudulent
  13. If you are the payee, either shortly before or immediately after making a wire transfer, contact the payee (using prior-known contact information) to request confirmation of receipt of the payment. If you do not receive timely confirmation, follow up. If the payment was not received by the proper party, there may be a problem to

Six Primary Scenarios 

Six common scenarios are enumerated, and a real-world scenario may be a combination of more than one. The scenarios reflect that there are two primary things of value and five primary acts that may indicate negligence. The two primary things of value are (1) email account access and (2 ) transaction information.

The five primary acts are (1) permitting hacking of an email account, (2) permitting hacking of a computer holding transaction information, (3) improperly leaking transaction information into the public domain, (4) lacking proper vigilance to identify that the name and email address in a received email do not match, and (5) failing to confirm the instructions via a separate channel.

By assessing which party made which mistakes, it may be possible to form a reasoned opinion regarding comparative negligence. Not all acts should necessarily have equal weight for determining negligence.

First, though, an important point is worth mentioning. During a prior career, working as an engineer in a military cybersecurity testing project,[5] it became apparent to me that being hacked is not necessarily proof of having been negligent. This is because businesses must necessarily make compromises in order for their employees to be able to use data processing systems, and no system that is useable by employees can be impervious to hacking.

A determined hacker, with the proper resources, can break into even reasonably well-protected systems. Also, some real-world situations may be so complex that assessment becomes challenging, far beyond using these model scenarios.

Scenario 1

The payee is hacked for email account access. In this case, the payee has at least one fault, permitting hacking of an email account. This is in addition to other possible payee faults.

Scenario 2

The email is spoofed, rather than the payee’s email account being hacked. In this case, the payor has at least one fault, lacking proper vigilance to identify that the name and email address in a received email do not match. This is in addition to other possible payor faults.

Scenario 3

The payee is hacked for transaction information. In this case, the payee has at least one fault, permitting hacking of a computer holding transaction information. This is in addition to other possible payee faults.

Scenario 4

The payee is not hacked for transaction information, but does improperly leak transaction information into the public domain, where it is found by the scammer. In this case, the payee has at least one fault, which is in addition to other possible payee faults.

Scenario 5

The payor is hacked for transaction information. In this case, the payor has at least one fault, permitting hacking of a computer holding transaction information. This is in addition to other possible payor faults.

Scenario 6

The payor is not hacked for transaction information, but does improperly leak transaction information into the public domain, where it is found by the scammer. In this case, the payor has at least one fault, which is in addition to other possible payor faults.

In all six scenarios, the payor has at least one fault, failing to confirm the instructions via a separate channel. The degree of negligence for this failure may be affected by the payor’s technicalsophistication and experience in financial transactions.

For example, an unsophisticated consumer should likely be attributed a lower level of negligence than a large business’ employee who has a job function of regularly paying suppliers via wire transfers. Upon analyzing the six scenarios, a count of faults may be possible for both the payor and payee. Hopefully, this provides a defensible basis for assigning liability among the payor and payee, and will replace resolving liability based upon which party has more power.

What to Do If It Happens to You

It is a good practice, after making any wire transfer, to find out whether you are involved in a BEC event. It is critical that you act quickly. If you are the payor:

  1. Contact the bank you used to make the outgoing wire transfer, and alert it that theremay have been a fraud. Ask for the funds to be returned. In some cases, it may be possible to recover some of the money, although the likelihood of recovery drops precipitously after the first 24 hours.
  2. Then, without delay, contact the FBI through the IC3. [6]
  3. Have your IT staff carefully examine the email containing the payment instructions to identify from where it was sent. Note that law enforcement may request a copy also.
    • If the instruction email was sent from the payee’s email server, then inform the payee of a suspected breach of their email system. Work with the payee to identify a new communication method, possibly one using a code word or other secret.
    • If the instruction email was sent with a spoofed email address, then your employee training is That needs to be addressed now.

If you are the payee:

  1. Alert the payor, if he or she does not already know.
  2. Contact the bank at which you are expecting to receive the incoming wire transfer, and alert it that there may have been a fraud or the funds may have been misplaces. Ask for an immediate alert if the funds arrive or are located.
  3. Work with the payor to provide complete information to the FBI’s See [6] for where to make the report.
  4. Learn the details of the email containing the payment instructions, such as sender, time and date, subject line, recipients and names of attachment.
  5. Have your IT staff carefully examine your email system to ascertain whether your email system was used.
    • If the instruction email was sent from your email server, then you may have experienced a breach. You may have a larger set of problems. Hopefully, your IT staff has a decent incident response plan in It’s time to break it out and start using it.
    • If the instruction email was sent with a spoofed email address, then suggest that the payee become familiar with the prevention steps checklist above. And did your contract specify how the payment instructions were to be verified?

Additional steps for both the payor and payee:

  1. Go to the prevention steps checklist above, and figure out what went wrong and what you can do better in the future.
  2. Check your insurance for possible coverage of the loss.
  3. Review your contract to determine what is requires regarding a second payment and continued delivery of products and/or services.
  4. Consider reviewing and updating the following items to reduce the likelihood ofanother occurrence or, if there is another incident, you will have a clear plan and expectations:
    • Your employees’ training and testing for prevention;
    • Your insurance coverage; and
    • Your contracts

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  • Federal Bureau of Investigation, “2017 Internet Crime Report,” 2017, available at https://pdf.ic3.gov/2017_IC3Report.pdf.
  • Federal Bureau of Investigation, “2018 Internet Crime Report,” 2018, available at https://pdf.ic3.gov/2018_IC3Report.pdf.
  • Federal Bureau of Investigation, “2019 Internet Crime Report,” 2019, available at https://pdf.ic3.gov/2019_IC3Report.pdf.
  • Federal Bureau of Investigation, “Business E-Mail Compromise the 12 Billion Dollar Scam,” Public Service Announcement I-071218-PSA, July12,2018, available athttps://www.ic3.gov/media/2018/180712.aspx.
  • S. Wilson and M. A. Kiy, “Some Fundamental Cybersecurity Concepts,” IEEE Access, vol. 2, pp. 116- 124, 2014.

The FBI Internet Crime Complain Center (IC3) has a crime report portal, for BEC and other internet- related crimes, at https://www.ic3.gov/complaint/default.aspx/.

Five Important Inspections for Investment Properties

Home Inspections

Home InspectionsReal estate investors may sometimes be willing to shrug off the need for professional inspections as they plan to renovate their properties. A home inspection, however, can save both residential homebuyers and investors serious headaches and money down the line.

Licensed inspectors will thoroughly examine the house for issues and conditions that sometimes are not apparent to the untrained eye. Armed with a detailed report, investors are more likely to make an informed, financially sound decision on the purchase and have more latitude to negotiate the price with the seller.

As an investor, there are some areas that you should pay careful attention to during the inspection to ensure you’re investing in the right property. Following are five of these areas of concern:

Structural Components

Inspectors will examine the foundation of the house as well as the attic space to search for any damage or water leaks. Should there by an foundation repairs necessary, many real estate investors will choose to walk away and look elsewhere for a property as these repairs can be exorbitant

Roofing

Roof inspectors examine roofs and ceilings for leaks, damage, mold, rotting wood, and more. If the house you are purchasing has a roof that is 20-25 years old or shows visible signs of damage, you may want to consider a roof inspection. Replacing a roof can be almost as expensive as some structural repairs, so investors should thoughtfully take inspection findings under advisement.

Plumbing

Inspectors will examine pipes, drains, vents, and waste systems to ensure they are free of leaks and obstructions. As plumbing is something that requires professional expertise, expenses can quickly add up. A proper inspection can save you quite a bit of cash!

Appliances

While you may expect to upgrade dated appliances such as fridge, stove, and dishwasher, there are other appliances that you are less likely to replace. These include heating and air conditioning units, hot tubs, and electric fireplaces.

Mold

Mold inspectors visually assess the house for mold and test surfaces and air. If your general home inspector picks up any mold during their inspection, it is a good idea to have the home inspected further for mold issues. Fungal growth not only poses a health risk to residents, but also weakens the structure of your property if left untreated.

Are you ready to invest in real estate and see the value it can provide? RLG would love to help you! Call us today to learn more.

How to Rent Out an Apartment Fast

Apartment

ApartmentAs real estate prices in large cities continue to skyrocket, the popularity of apartment living is on the upswing. If you are considering getting into the apartment rental business, there are a few ways to ensure your property remains occupied. Read on to find out how to rent out an apartment posthaste.

Place an Ad

Start out by placing a classified ad in your local newspaper and online. The key here is to create a rental listing that tells prospective tenants about basic information such as rent price, address, number of bedrooms and bathrooms, and highlights the best features – that could be amenities or nearby attractions, for example.

Be sure to take high-quality photos of every room so tenants can easily visualize the space and see themselves living in your property. If the apartment complex has a social media presence and a website, these could be great places from which to advertise vacancies for free.

Lastly, remember to put up a “For Rent” sign, where permitted, along with your contact number. Sometimes, the simplest solution is the best.

Be Responsive

As tenants look at multiple properties to decide which one is right, the ability to effectively manage inquiries cannot be overstated. To avoid losing out on opportunities, make sure to reply to prospects as quickly as possible, ideally faster than your competition.

With that said, the speed of response does not mean that you should gloss over the screening process. It’s important to filter out good potential tenants from the sea of applications you might receive as troublesome tenants can cause you more issues and cost more money than if the apartment sat empty for a few months.

Hire a Professional

Hiring an experienced property manager can be a great avenue to explore if you’re looking to save on the time and hassle involved in renting out and managing the daily operations of being a landlord.

Not only will these professionals take charge of your marketing efforts, but also captain tenant screening and background checks, collect rent, conduct inspections and repairs, communicate with tenants, and more. If you have lots of rental units, live far from where the apartment unit is located, or don’t have much time on your hands, a property management company is a no-brainer.

Are you ready to invest in real estate and see the value it can provide? RLG would love to help you! Call us today to learn more.