Just sentenced to six years in prison for real estate fraud was Richard Osty of Waukengan, as reported in an article in The Chicago Tribune by Clifford Ward. Ward's Tribune piece, "Waukegan man gets 6 years for real estate scam, must pay back $760,000"Active or Passive Real Estate Investing starts with the woeful tale of investing in real estate that,

"Richard Osty solicited hundreds of thousands of from investors who thought they would profit by building houses in low income neighborhoods." 

The article goes on, stating that, "According to prosecutors, Osty allegedly told investors he would purchase, on the investors' behalf, vacant land from the City of Chicago for $1 per lot in low income neighborhoods.  Investors would then secure loans and give Osty money to buy modular "green" housing on the lots.  He told investors that his company had procured buyers for the houses via two Chicago entities that provide mortgages to certain low income applicants."

There could not be better advertising for why turnkey rental real estate properties are ideal for those looking to profit from investing in real estate, particularly in Chicago!

Turnkey properties are those that have been selected to be fixed up by experienced real estate professionals.  After the purchase, those properties are then rehabbed.  From there, a suitable tenant is found, with the management provided by companies such as EquityBuild, a real estate investment firm headed by Jerry Cohen, its President and Founder.

Cohen, who has been principal in more than two thousand real deals since 1984, also provides financing for the buyers through EquityBuild Finance, the funding unit.  For the buyer, not only does that remove the burden of obtaining financing, it also demonstrates the commitment and confidence that EquityBuild has in the turnkey rental properties is processes.

Thorough due diligence and research is required in all investing.  Certainly there is a degree of faith involved as if someone is determined to commit fraud, it is going to happen.  But when buying turnkey rental properties, this is impossible as the tenant is in place.  Documentation will be there in the form of leases, utility bills, and plenty of other paperwork.  If the party to the deal has the extensive track record of Cohen with EquityBuild and EquityBuild Finance, there are plenty of satisfied clients to talk with and answer questions about their experience.

It is tragic to read about so many losing so much money to a criminal in real estate.  

But this is a lesson to other potential buyers about the appeal of investing in turnkey rental properties.  Due diligence is satisfied by visiting the property and the tenant.  Research can easily be completed by questioning previous clients. Little has to be taken on faith.

Another advantage of turnkey real estate investing is there is not a government program that provides the backing.  While that can be attractive, that should not be considered a positive in business dealings when there are plenty of turnkey real estate properties that are very appealing based entirely on its fundamental appeal as an investment.  Real estate investing in low income areas can also be more challenging than buying turnkey properties in better neighborhoods.