Part 3, Co-Wholesaling: A Disaster!

Posted by on 1:48 pm in Real Estate Investing, Uncategorized | 1 comment

            You have the opportunity to buy a good property on great terms. You think it would be a great property for you to fix and flip or, if you get too busy, possibly wholesale to another rehabber. I suggest that after speaking with the seller, the first thing you do is make a quick online search by going to the website for the local county auditor or county recorder and verify who the owner of record is according to those public records. The auditor’s records might be easier to access, but they are not as authoritative as what the...

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Part 2, Co-Wholesaling: A Disaster!

Posted by on 7:23 pm in Real Estate Investing | 2 comments

            In my last post, I began telling you about a problematic file on my desk relative to an investor who had a contract assigned to him by two individuals who were “co-wholesaling.” After the deal went sideways, he contacted me and retained my services.             Upon reviewing the paperwork sent to me, another problem quickly appeared. The contract that was purportedly assigned to the investor, now my client, was defective because the seller listed on the contract was not the owner of record. Many times I have seen transactions put...

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Co-Wholesaling: A Disaster!

Posted by on 2:28 pm in Real Estate Investing | 5 comments

            I have been working on a problematic file on my desk relative to an investor who thought he was buying a property from a wholesaler. It turns out that two guys went together to “co-wholesale” to my client a property they did not own. They assigned the contract to my client. Unfortunately, the assignment was flawed because the underlying contract was defective for two reasons. For one thing, it was defective because the seller was not the owner of record, and it was also defective because it failed to comply with fundamental...

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Beware of the Investor

Posted by on 3:10 pm in Real Estate Investing | 2 comments

            Almost all of us have seen the ads about how you can buy or invest in real estate with little or no money down, and many residential real estate investors have come to believe that they can do that in the note investing and commercial real estate world as well. They quite literally are trying to do such deals “naked”. They have no funding, no accounting, no legal team or expertise available to help them with their due diligence. They are just looking to make a quick buck on a deal.             As many of you know, I represent...

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Get It “All In”

Posted by on 1:30 pm in Real Estate Investing | 1 comment

            We rarely see the lawyers in TV shows spending hours carefully writing legal agreements. Getting all of the terms and promises in writing doesn’t make for exciting TV, but it sure makes for good business.             As many of you know, I have the opportunity to get involved in a number of different kinds of real estate transactions. I was brought in on a transaction where apparently negotiations had taken place face-to-face, over the phone, and via email. Much, but not all, of what was agreed to was later incorporated into an...

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Your Investing Parameters

Posted by on 12:57 pm in Real Estate Investing | 4 comments

           When I sit down with investors or talk with them by phone, occasionally one says they are looking for a great deal.             “Jeff, I need to find a great deal. Can you help me?”             “Well, what are you looking for?”             “I don’t know. I’m looking for a great deal.”             “What do you mean by a ‘great deal’?”             After a little give and take, I come to realize they are looking for the once-in-a-lifetime grand slam, the deal where a few thousand dollars become tens of thousands of dollars. Those...

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A False Sense of Security

Posted by on 3:23 pm in Real Estate Investing | 4 comments

            Over the last few years, I have encountered various private lenders who have come to me with tragic stories. The stories go something like this. They positioned themselves as private lenders in either the rehabbing or quick-turn market. They set forth their lending criteria and began to develop their lending standards. They were contacted by prospective borrowers. One of these prospective borrowers seemed to be so agreeable, cooperative and easy to work with. They were quick to do whatever was asked of them by the lender. The...

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Don’t Just Ask “Why?” Ask “Why Not?”

Posted by on 5:32 pm in Real Estate Investing | 1 comment

           It seems to be part of human nature that when something bad happens, we immediately begin to ask, “Why did this happen? Why did I deserve this? What went wrong?” When anything good or bad happens, look at it from the perspective of both why and why not.             A deal closes and you make some money. Analyze why it was successful, but also ask yourself why you didn’t make more money. When a deal fails or something goes wrong, figure out what went wrong. Why didn’t it work? What could have been done to improve the outcome?...

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The Duty to Defend and Indemnify

Posted by on 1:08 pm in Real Estate Investing | 0 comments

            In my two previous emails, I talked about the importance of making sure you have a good business liability insurance policy given some of the concerns regarding the doctrine of respondeat superior and how entrepreneurs can be held liable for the actions of independent contractors. There are two important features of a good business liability insurance policy.             The first important feature is the duty to defend. This is where the insurance company undertakes, at their cost, the representation and defense of you, the...

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Being Liable for Your Contractor’s Actions

Posted by on 6:28 pm in Uncategorized | 4 comments

            In my previous post I briefly explained the doctrine of respondeat superior, which is Latin for “let the master answer.” In today’s vernacular, it means “let the employer be financially responsible for the conduct of employees and agents.” Remember, an agent can be either an employee or an independent contractor.             I’ve seen cases in which the day-to-day operations and performance of an independent contractor were so carefully and precisely controlled and managed by the general contractor or the owner who hired them that...

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