Click on
Laurex Hot Deals
for pre-screened real estate opportunities
ALWAYS use an attorney when getting started in real
estate investing. When I first started in REI, I realized houses are easy to
purchase and homes are easy to sell. I have purchased houses with no equity,
houses with $100,000 equity and houses with equity everywhere in between.
Before I purchased my first property I went to the top real estate attorney
in my state and had her prepare all the documents required to legally
purchase and sell properties to protect both the buyer and the seller. Then
I took this paperwork to several escrow companies (title companies) and had
them review the paperwork to see if they would accept the paperwork when the
time came for the buyer to re-finance the property or for me to sell the
property outright. They accepted the paperwork without question.
Click Here to
Pre-Qualify
for Commercial Financing
No matter which state you live in, you have elected
legislators that pass laws in your state. The state statutes contain these
laws passed by the legislators. These laws vary from state to state. In
other words, what works for me in my state may not work for you in your
state for “true “protection. You could use what I call “generic paperwork”.
However, I do not know if this paperwork will protect you and the new buyer
or your seller in your state. Maybe some of the attorneys that post here
would have an answer.
I was reading an article where the seller wanted his attorney to review the
paperwork. Occasionally you will run into this situation. One person used
his sales skills to overcome the objection by saying, (I will paraphrase
here) “is your attorney going to live here and make your payments?” He got
the deal. What I use is, “This paperwork was prepared by the foremost real
estate attorney in our state. I am sure your real estate attorney knows her.
It will only take a few minutes to call your attorney and have them talk
together now on my dime.” What do you think the chances are that someone has
a real estate attorney? Besides I had the best and that was enough to close
the deal.
There is a military base where I live. I purchased quite a few of their
properties, which had V.A. loans. Made my life easier. Military bases are a
good place to prospect for motivated sellers, as military personnel are
transferred quite frequently. I found that military people would say, “I
will need to have your paperwork reviewed by the Judge Advocate General's
(JAG) office”. For one thing it is free; so why wouldn't they use that free
legal advice. The JAG office never turned down my paperwork. I received a
call one day from the Colonel in charge of the JAG office. He explained that
he had just received orders and needed to sell his house quickly, would I be
able to help him? I asked him if he needed to review my paperwork. He
laughed and said, “it would not be necessary.” I purchased the house.
When one of my buyers was in default, I obtained a simple Five Day Eviction
Notice. When I went to court the buyers had an attorney. He said something
about an “Equity Issue” and then recited a state statute I never heard of.
The judge said this should be in District Court not Justice Court , no
simple eviction. I went to the state statutes and read that law. Wait a
minute here; this statute referred to a “Trust Deed” not a Contract for
Deed. In my state, a Contract for Deed (CFD) is a stand-alone document.
Meaning the way the contract reads is how it is interpreted by the court
system. It contains the wording stating if the buyer defaults then the
seller (that's me) becomes the landlord and the buyer (that's them) becomes
the tenant. When I went back to court and their attorney brought up “equity
issue”. I replied “the court system recognizes this document (CFD) as what
is says is what it means (not very legalese) and has nothing to do with
State Statute XYZ which is an equity issue concerning trust deeds”. The
Judge took a fifteen-minute recess, came back and said “can your client be
out of the house in 48 hours?”
I just read where a young lady just starting out in REI was charged with
selling real estate without a license. She was selling a house she just
purchased and was turned in by a real estate agent. Her T/B's (I think this
means tenant / buyers) moved out because they became panicked. A real estate
investigator talked to her so she sought legal advice. Two attorneys advised
her to plead guilty and said it was just a misdemeanor. One attorney said it
was a novel case and would take it for a charge of $1,500. She doesn't know
what to do. I do not know what the outcome of this case will be. I would
bet, if she started with an attorney, she would be suing the real estate
agent for filing a false criminal complaint, “torts” and other charges. I do
feel empathy for this lady.
Also, when you get ready to sell your portfolio of houses, when you are
ready to retire or just want out, your buyer or buyers will have the
paperwork on the houses you own reviewed by an attorney. If the paperwork is
in order, it's an easy sell. It worked for me.
I'll say it again, when you are first starting out in REI, I would advise
that you also consult with an attorney in your state or see if any of the
attorneys who post on this board can prepare the “proper” paperwork you will
need. I have often said, “I am not fond of them (attorneys)”, however I'm
not crazy enough not to use one when necessary.
