Miami has a hot real estate market and many people are trying to get into it and profit. If you are looking to invest in property in the US you should beware of some of the scams that look to lure in off shore investors that can leave you without your money and even no property.
A typical sales pitch starts out with a statement from the scammer like “This is a great market and I can buy a distressed property at auction with a secret bidding process. We’ll then create an LLC (Limited Liability Corporation) that will be the owner so your government will not know your identity or that you are involved with ownership and protect you from tax and currency issues.” The scammer continues by saying “I know contractors that can fix it up to attract lots of buyers and we can sell it at a big profit very quickly. You can get a 30-40% return in 6 months to a year.”
This should set off alarms for you as an investor. Often someone discovers later that there is no connection between the LLC and the investor. Worse, the scammer takes the money and doesn’t buy a property. Or they disappear entirely thinking no one will try to get the money back. A rate of return of 30-40% is also very high even in a hot market like Miami.
While there are some great investment opportunities in Florida in real estate you need to protect yourself before you give anyone your money. Problems can be avoided from the start when you get an attorney involved. Legitimate companies or individuals that are offering to sell properties or other investments expect this and will not be averse to dealing with a lawyer. This will help ensure that you control the contracts, agreements and the company that’s buying property with your money.
Giacomo Bossa is an attorney/partner with Baraka + Bossa and specializes in Real Estate law.
