An Investors Opinion About Real Estate Attorneys
by John Cash Locke
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 ettorney 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.
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 legaleze) 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.
Bio:
John "Cash" Locke is a private real estate investor specializing in Subject To
investing; which lead to his authoring the training manual, Subject To "that's
what I do", as well as his e-book, Big Bucks Bird Dogging.
His background ranges from co-ownership of radio and television stations, which
encompassed advertising, marketing and sales as well as many avenues in between.
Real estate investing has allowed John "Cash" Locke to spend more time with his
family and friends not allowed in the daily grind while working for someone
else. He feels any person with the correct knowledge and willing to apply this
knowledge can become a successful creative real estate investor.
His personal commitment to each of his students is to see them become successful
as well. This is why he feels it is important that they can contact him via
e-mail, fax or personal phone call in order to advise and direct them. No
question is unimportant to him.