Contracts And Attorneys

[Frank (OH) 0]

I have not followed up on my first call. Why? Because I have not had the contracts in MC's course reviewed by an attorney. So I ask the president of my REIA, who is a realtor, for some recommendations. She gives me the name of two attorneys that the REIA uses. I called them yesterday. The first guy needed me to explain in depth what we are trying to do here. He says it sounds interesting, send the contracts over and I'll look at them for you. I hung up and thought to myself "I just had to explain a basic SLO to this guy...WTF?" So I called the second guy. I had to explain it to him what we do also. He tells me that anyone can get a mortgage these days and that he doesn't think there is a market here for this type of investing. WOW!!!! What's wrong with these people????

 

Any thoughts?

[Doug Pretorius (ON) 9]

I take it your REIA isn't overly creative in its approach?

 

This is the same "advice" I've received from most lawyers. Chances are they're still capable of reviewing the legality of the contracts, and that's really ALL you should be looking for from a lawyer. I've learned not to take investment advice from them, afterall if they knew how to invest they would be investors instead of lawyers

 

If it's any comfort, even though I'm actively doing this and have more buyers than I know what to do with, many "profesionals" (lawyers, mortgage brokers and especially realtors) tell me that there's no market for it. I just smile and say: "Hah hah, yeah I knew this stuff sounded too good to be true!" And move on to the next.

[JerseyJeff 0]

He tells me that anyone can get a mortgage these days and that he doesn't think there is a market here for this type of investing.

I've heard this one a few times as well...I've since gotten my first deal with a seller, so hopefully I'll put a TB in there and prove them wrong.

 

Also, with the market turning, and interest rates rising, and gas rising, loans will not be as readily available as they have been in recent years. Also, with many people buying their homes with ARM's and interest only loans to maximize their buying potential and thereby maximizing their monthly payments, as the interest rates rise, and these loans need to be adjusted after the initial interest period or refinanced, many owners will be unable to afford the new payments, and foreclosure proceedings will follow. This will also force lenders to be more stringent with their lending requirements.

 

I hung up and thought to myself "I just had to explain a basic SLO to this guy...WTF?"

I agree. You want someone who is at least familiar with the concept to review the paperwork. Do a search for RE attorney's in your area on Google (soon to be owned by MC) or Yahoo! and just start cold calling them and seeing if they are familiar with RTO's/LP's.

 

Jeff

[MichaelC 160]

Haha! I got a good chuckle out of your post, Frank. Can't say I'm surprised by the attorneys lack of familiarity with what we do. I hear similar tales from other new investors frequently. The surprising part for me is that these two you spoke with were affiliated with your REIA. Usually, those attorneys are the ones who are also investors, or at least are familiar with a real estate investors needs.

Keep shopping until you find one you are comfortable with. You might be better off attending the REIA meetings personally. Glad hand a few other members and ask around. You'll get some additional names.

[Frank (OH) 0]

I do attend all the meetings MC, and one of those attorneys told me he's done all types of investing. BULLSHIT!!!

 

Anyway, I have a few more contacts to make. I want to be sure I'm on the up and up before I make a costly mistake.

 

Thanks Guys.

[transactionsengineer 0]

IF you are still seeking an attorney, I would suggest looking at The Martindale Directory

 

http://www.martindale.com

 

Daniel

[Adam King (MI) 1]

Frank,

Make this easy on yourself. You need to find out four things.

 

1. Your state specific renter laws or rights

2. Dealer laws (When and if you need to be licensed or use a broker buying and selling "how many" houses and even if an option applies to that. Which in my opinion it usually doesn't because an option only controls and not owns. This is why to me the Due on Sale's Clause issue with LOs is flawed.)

3. Disclosure laws. What needs to be in the agreements like lead paint disclosure, seller's disclosure etc. This information will help your seller if you do a CA.

4. Find an attorney that is a real estate attorney that understands all the above. It's nothing more than a straight option attached to a lease with disclosures for safety and purchase. If the attorney says gee, that sounds interesting, then just stand up shake his hand and let him get back to his job as a divorce attorney or whatever he does.

 

MC's contracts are good they just need to be applied to your state. That's all.

 

In my opinion, Pre-Paid Legal covers all of this. I would probably get in trouble saying this since I'm an associate, but if you're a new investor and broke, you'd be acting foolish knowing this plan exists and not taking action on it. It is seriously a mandatory service for the new investor in my eyes. You can keep spinning your wheels with $250 an hour attorneys and uneducated REI clubs, or you can spend the $26 (The price of a book at borders) a month (Which is also tax deductible if you're self employed) to get your questions answered from the right counsel.

It's up to you.

Just my two cents,

Adam

[Frank (OH) 0]

Dan and Adam...... thanks for the advice. I will look into both.

[Guest Guest_Brad_*]

Doug, who do you use as a lawyer in the Toronto or surrounding area? Seemed everytime someone asked MB that question he always danced around it. Especially regarding his Sub 2/ LO paperwork.

[Doug Pretorius (ON) 9]

Brad, I use Victor Hussein at 30 Duke Street West Kitchener (519) 744-8585.

[Craig 0]

So I called the second guy. I had to explain it to him what we do also. He tells me that anyone can get a mortgage these days and that he doesn't think there is a market here for this type of investing. WOW!!!! What's wrong with these people????

 

Any thoughts?

 

Thats why he is a attorney. Who is he to say there isn't a market for this. And he really cares about if there is a market for this. Just pay his bill to review the contacts.

 

Second thought, my nephew who is a attorney said, you call a hand full of attorneys and tell them you want to intereview them. Puts them on the other side and if you don't like them tell them NEXT.

 

Trust your instincts. STRAIGHT FROM THE GUT...

 

Craig

[Frank (OH) 0]

Well..... I found an attorney to review 5 different contracts from MC's manual. He came recommended by John Hyre from reiplace.com. He will charge a flat fee of $275. How do you all feel about the price?

[JerseyJeff 0]

Well, it doesn't matter how we feel, how do you feel about paying it?

 

It's $55 per contract which seems pretty good.

 

He probably charges $275 an hour and plans on only spending an hour on your stuff, which means he has 12.5 minutes per contract.

 

Jeff

[happyardy 0]

Well, it doesn't matter how we feel, how do you feel about paying it?

 

It's $55 per contract which seems pretty good.

 

He probably charges $275 an hour and plans on only spending an hour on your stuff, which means he has 12.5 minutes per contract.

 

Jeff

 

 

After a contract is reviewed & OKed by an attorney, what kind of a guarantee does the investor buy with this ? Does the attorney take all responsibilty if any of the wording in the contract is challenged tomm. ?

Can someone elaborate ?

thanks

- Ardy

[JerseyJeff 0]

There is usually a statement in the contract holding the preparer harmless so I don't think there is any guarantee.

 

Jeff