If you have, as a definition, that a "successful" real estate transaction is one where you have closed an escrow on a property at no more than a fair market price, and there are no "surprises" after you have owned the property for a year, you are destined to be a successful investor. Unfortunately, many of the "surprises" dramatically effect the ultimate purchase price of the property are not discovered until it is too late to make adjustments to the purchase price. Consider the investor who believed that he was "stealing" a mobile home community at a price of $2,000,000 only to be surprised by having to spend another $150,000 correcting HCD violations and another $60,000 replacing sections of the sewer system. Now the transaction has lost much of its attractiveness. This example is just that, an example. But variations of this unfortunate situation occur on a daily basis on every type of investment property. These types of surprises are, for the most part, normal.
Anyone who has purchased a home in California is familiar with the many disclosure forms the real estate agent is required to furnish to the buyer. It is very seldom that a home buyer experiences any "surprises" after close of escrow. This is not the case when buying and selling 4 or more units. California law requires full and complete disclosure to the buyer of 4 or more units, and this can be done verbally. However, there are no required forms by the State (regarding seller disclosures) and few commercial firms that provide them. In fact, one of the Nation's largest investment broker firm has absolutely no disclosure forms for the seller to complete, regarding even the most obvious deficiencies.
Listing agents are are required to disclose to a buyer only those deficiencies about which the seller has informed him, or those about which the agent has personal knowledge. however, a listing agent cannot disclose that of which he is unaware, and the seller may forget about identifying some problems to him. Selling brokers, in most cases, know even less about a property that the listing agent. Accordingly, the selling broker may be the least reliable source of deficiencies in the property being sold.
Litton/Fuller Group provides proprietarily disclosure forms which have been field tested for over ten years. This routine practice offers the best chance available for a buyer to avoid "surprises". Combine the availability of these copy written forms along with the average experience of our agents (over 20 years) and there is the highest possible chance for an investor to have a successful transaction.