Real estate development has become a more common financial investment for the entrepreneurial minded in recent years. There are numerous benefits to buying, renovating and reselling a property at a profit. However, there are also numerous challenges, as well.
In 2020, the housing market has been giving mixed messages to “house flippers”. On the one hand, property prices are high and there is tremendous competition amongst buyers in the current market. This can be a deterrent for a lot of potential flippers because of the high cost of entry. On the other hand, the higher cost can ultimately benefit the investor: Although it costs more to get in, you could stand to make more on the sale, as well.
Some potential challenges in real estate development
Some of the common challenges you could face in today’s real estate development market include:
- Purchase price: As mentioned above, the rising purchase prices of real estate can be a roadblock for developers, especially those who are just starting in the business.
- Title issues and liens: As the economy continues to struggle as a result of forced shutdowns and curfews, short sales and foreclosures become more prevalent. This results in an increased need for quiet title actions and other solutions to the various problems that arise.
- Construction problems: The construction industry is struggling these days like most industries. Construction delays and defects have always been a part of the process, but these issues are more prevalent than ever.
These issues are common for real estate developers, and they are real, but they are not the end of the story.
This is still a good time for developers
Although there are some challenges, this is still a good time to flip a property. Most of the issues noted above are issues that are always lurking as potential roadblocks. They might be more prevalent today than they were a year ago, but they are not any different.
Further, an experienced attorney already knows the solutions to these problems and knows how to get results efficiently. With the appropriate legal help from a lawyer, you could overcome these challenges and still profit from real estate development.