Real estate investing and the amazing profits some very successful real estate investors realize makes some wonder what sets these investors part from the rest of them. Is it their experience, acumen, skills, marketing strategies or the fact that they have a seemingly never-ending supply of motivated sellers? The secret of the success of these real estate investors, among other things, is a good grasp of the technical aspect of real estate investing. They are able to double-check and ensure that deals are agreed on in their favor and can be such experts that they can form contracts and agreements, do the required research, and check title deeds when time is a constraint and hiring an attorney can be a time-consuming deterrent.
If creative real estate investors have technical skills, they can benefit, as not all lawyers know much about the various moneymaking techniques that clever real estate investors use. A like-minded attorney can be a great boon; but if a he uses the services of an attorney who has no idea what creative real estate investing is, the real estate investor will be thankful he has some technical expertise that will ensure that the deal goes through without any problems.
If the investor has some technical knowledge, he will be able to decide which kind of strategy he needs to use to close a deal and ensure that his interests are safeguarded. If you have the basic knowledge, you may sign a lease option; perhaps if you are very knowledgeable, you will know the ways to safeguard your option, such as escrow deed, recording the option, etc. You will become more of a professional real estate investor.
While flipping properties is a technique that is used quite a lot by various investors, it is necessary to be able to draft the contract carefully, ensuring that there are no mix-ups. An attorney who does not understand innovative investing techniques cannot give you much advice, so it will be better if you can check the contract yourself to ensure there are no mistakes that may be costly and hard to recover from. If you are a clever real estate investor, you will ensure that it is an assignment contract, with a
subject-to-approval-by-partner clause that can be used in the event that you do not find any investors to flip the property to. This gives you an exit strategy blaming a partner who did not approve of the deal. If you are a novice, you could be stuck with a property that may be a drain on your resources. If you are dealing with Bank REO properties and trying to flip them, be sure that you have a good assignment contract and that the deal is finalized in your name so you can then flip the property to another investor for a good profit.
Peter had a great property a bank REO that he was keen to flip. He got the contract ready and sent in all necessary paperwork, spending quite a bit of money. While he was mentally spending the profit he assumed he would make, he got a rude shock when the deal fell through because his lawyer had not prepared an assignment contract but had sent in papers drawn in favor of the buyer. The bank refused to do further deals with him because he had earned their mistrust. If he had the know-how, he would have identified this mistake instead of losing out on the deal.
Real Estate Investors, Educate Yourself
The best way to do this will be to get yourself familiar with all basic legal terms. This can be done by doing research on the Internet, getting a dictionary, and studying the way your attorney formulates contracts until you have the confidence that you can do the job in case there are certain time constraints that prevent you from consulting your attorney.
Learn about the various documents and in which situations they are used. There are assignment contracts, deeds, options, lease purchases, etc. You will need to learn about the precautions to be taken while forging a deal such as due diligence, checking title deeds, ensuring there are no hidden debts, and checking for any tax liens. However, be prudent enough to figure out when you are lost and need help from an experienced and capable attorney. It will be an utter shame and a waste to scrimp on attorney fees and lose money big time because of something that you overlooked.
It is better if you watch the way your attorney deals and learn from it by studying the way each contract or agreement has been drawn, the precautions taken, and the terms of the deal. Slowly but surely, real estate investors will acquire the technical knowledge required to frame contracts. Perhaps have your attorney study your contracts until you are confident enough to close deals without using his services.
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