Want to learn about the behind the scenes. Any advice?

Question

I am a beginner investor. My partners and I got incredibly lucky on our first property, everything went without a hitch. We are close to closing our second deal and it has been an uphill battle. Things got stalled and we almost lost the deal over a tax lien, but we are finally nearing closure. The experience made me realize how little I know about the legal aspect of deal making. I've read about deal valuation and land lording (and have been learning through experience), but my attorney has handled everything in between. Any beginner friendly book recommendations to learn about the processes between analysis and closing (contracts, due diligence, title, legal, etc.)?

I know nothing beats learning by doing, and my current deal has taught me so much, but I want to be even more knowledgeable on the next one.

Thanks!

I know nothing beats learning by doing, and my current deal has taught me so much, but I want to be even more knowledgeable on the next one.

Thanks!

Mohammed Rahman · Answer

Hey Zach,

It might be helpful to start by getting familiar with general real estate legal concepts through whatever books or textbooks resonate with you. You don't need to go deep, you just need enough to understand the vocabulary and the framework (things like how title works, what due diligence is actually looking for, how contracts are structured, what liens are and how they attach to a property).

Once you have that foundation, go read your state's actual laws. Reading the actual statutes sounds intimidating but once you have the general concepts under your belt it starts to click, because you're matching the legal language to things you already understand conceptually.

Then bring that knowledge to your attorney and use them as a sounding board. Ask questions, get them to explain what they're doing and why, and connect it back to what you've been reading.

Feel free to reach out anytime, happy to be a resource wherever I can.

Ashish Acharya · Answer

Hey Zach! You’ve gotten some great responses so far. Just wanted to add a couple of thoughts from a tax perspective.

I don’t think you’re missing anything major on the legal side. One thing to just keep in mind is that tax liens can come up during title work when the title isn’t clean, and sometimes owners don’t even realize they’re there until the lender runs title. They’re usually tied to unpaid obligations, so having a solid system early on to stay on top of property-related bills and deadlines can save a lot of headaches.

Zooming out a bit, one thing that’s really worth getting familiar with early is how the structure of the deal ties into your overall tax strategy, because a lot of those decisions actually get set before you ever close. Things like how the property is titled, whether you’re using an LLC or a partnership, how contributions between partners are documented, and how depreciation gets allocated can all have a big impact later on.

A lot of newer investors naturally focus on valuation and financing (which is definitely important), but another key aspect in scaling is the entity structuring and tax planning behind it all. And as you continue building out your investment goals, it’s also worth understanding that different types of investments have different tax treatments and opportunities, especially when it comes to passive vs. non-passive income. Getting clear on how those interact can make a big difference in how effectively you’re able to offset other income and build a more tax-efficient portfolio over time.

But honestly, you’re right on the money; nothing really replaces the experience gained in doing different deals. Each closing teaches you something different, and after a few of them, you start to see how all the pieces connect and how your tax strategy either aligns with or falls short of the bigger picture. Good luck and happy to connect!

Abel Curiel · Answer

Hello Zach,

What state are you investing in?

Contracts, due diligence, and other aspects of the sale process can vary by state, especially in New York.

@Adam Leitman Bailey has written books on purchasing property/finding deals, as well as RE Law and title. I've interviewed him in the past and later did a deal with his firm. Great guy and a wealth of knowledge.

I'd recommend checking out his site and finding his books on amazon.

All the best!

Abel

Jason Wray · Answer

Zach,

Attorney's can be great but they do nto specialize in mortgage financing or programs.  In addition to that you find these things out when the actual bank orders teh chain of title which is supposed to be done prior to underwriting and appraisal if possible.  This allows you and the bank team to review for liens, judgments, floating debts, IRS issues, mortgages, probate etc.

My exerience as an FDIC Baker is attorneys drag feet and they have a short work scheduel in most cases Mon through Friday from 9-4PM and they hand it off to their paralegals or office help.  So things tend to be reactive rather than practice preventive maintenance.

Feel free to add me to your network I usually run the Reports, Rental options, check for STR, MTR restrictions, ARV, proposed rents, renovation costs etc.  But always a chain of title prior to the midway mark to avoid lost time and money.  You can also check out my profile and send me an email.

Want to learn about the behind the scenes. Any advice?

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