I must admit, I was forewarned not to waste my time trying to bring an attorney who was not already REI friendly up to date with the process of wholesaling. However after spending up about ten minutes of a local RE attorney's precious time trying to explain the concept of wholesaling to him, he just straight out said to me that he was very familiar with websites like BP and that with his "30+ years of experience and hundreds of closings under his belt", he could tell me that "you guys (along with the (3) REI courses that I have taken) are only giving newbies like myself half of the story." I asked him if he thought wholesaling was a scam and he admittedly said no but "the process was way more complicated than what I was perceiving it to be." Finally he said that if I would be willing to bring him my seller's information, he would then be able to proof my contract for me. I asked him how did he expect me to extract and record potential clients information without them signing my contract (the one he was hesitating to proof for me). He then stated that he would proof it for $100.00 if I insisted that he proofed them before I brought him my seller's information. However I smell a rat! It sounds to me like this guy wants to try an sabotage my business! My question to you guys is why? Is this a common practice with attorneys that are not REI friendly? Do anyone know of a REI friendly attorney located within a 2hr radius of Manning, SC. As of this writing (as far as I know) Title companies do not close RE deals here, only attorneys. Thanks in advance Reggie.
@Reginald S. - Ask this guy to give you two things:
1. A good, generic, blank purchase and sell agreement. The "blank" for you to write in your name should be long enough for you to also write in the words "and/or assigns". Or, you could do this with a good generic option agreement.
2. A good, blank, "assignment of contract" contract.
I LOLed when I saw your post as I was told the same exact thing by a well established real estate attorney recently.
On the bright side, I see more and more law firm booths at my local REIA :)
Hey Luther after reading your post I was finally able to lol at his response too. Thanks for your post guy I really needed that release. And thanks for adding the bright side comment too.
"30+ years of experience and hundreds of closings under his belt", he could tell me that "you guys (along with the (3) REI courses that I have taken) are only giving newbies like myself half of the story." I asked him if he thought wholesaling was a scam and he admittedly said no but "the process was way more complicated than what I was perceiving it to be."
He didn't say scam artist, he said the above, these are true statements. You are getting only half the story here, and wholesaling is complicated. That's why you see here a constant recommendation to see an attorney, which you are. Nothing is out of line that I can see.
David I hear what your saying. However you and I both know that the concept of "complication" in and of itself is really a matter of perspective. Take your cellphone for instance. Your phone probably has a million functions on it, however you probably only know how to use about (3) of them at the most, (if that). Nevertheless my 16 year old daughter could (more than likely) take your cellphone and (having never seen it before) take you to school! You see to you cellphones (beyond calling and saving numbers) are probably seen as being rather complicated devices ( you know sort of like you seem to see wholesaling)! But to her they are really simple and we are ourselves just old. My point is this, neither you or that attorney know the level of me or Luther's comprehension. I think it was quite arrogant and equally condescending for him to assume that that which he himself perceived to be complicated, was universally that complicated for everyone else. Oh and if I'm wrong about your perception of cellphone functions, I urge you to let that (in and of itself) stand as further proof that we (as fellow humans) are not qualified to tell each other what we perceive the other person can and can not possibly understand.
I'm sure I could be taken to school on cell phone functions:) This particular attorney may or may not be of value to you, I don't know. But isn't it up to you to make him crystal clear as to what you do and don't know so you don't spend unnecessary money?
@Reginald S. , let me see if I am getting this right. You do not have a single legal document reviewed by a lawyer for a function that you intend to make a living on. You have no experience doing your new profession. You have maybe 40 hours of training on the subject of wholesaling, maybe. You obviously have no real experience or time on the job, but you are sure this guy who has an advanced college degree, has taken and passed the state bar exam, has closed hundreds of real estate deals, and has over 30 years of experience has no clue what he is talking about, but you are a bastion of knowledge that he is arrogant to underestimate?
Do you think there is even a glimmer of a chance he could be right and you could be wrong? It is possible that this attorney knows nothing about wholesaling, but he knows what makes a contract legal and what does not constitute a binding contract. He probably knows what a green river ordinance is both in fact and theory. He probably knows the law on reporting closing sales to the IRS, he probably knows if there is a 3 day period when even a land option purchase agreement can be voided. He probably knows that when you sign a no money down option that it is worthless. He knows what a contract of adhesion is and how to address it.
Even someone who you disagree with can teach you a lot. If you really want to be good at this business you need to keep your mind open, even to folks who you perceive as having a closed mind. When you first start playing baseball it is so easy, you swing the bat and throw the ball. A true professional will tell you there is so much more. How you workout and exercise, what you eat, your mental attitude, not the mention the thousands of small techniques to do each action better. You do not know enough in 2nd grade to even understand how complicated parts of baseball are, and you might even think a professional ball player wants to sabotage your becoming a baseball player by telling you how hard it is. The truth is he could care less he is just trying to tell you real facts so you are prepared. That real estate attorney probably makes well over $100K a year, and he has a lot of better things to do with his time than try to destroy the business of someone he just met. Maybe you could have asked him about what kind of things should you know that he thinks you are lacking. Ask him if he knows of a book that would help you learn more, or could he copy some of the state statutes he thinks you need to be aware of.
Don't let arrogance or insecurity make you bypass a chance to learn and grow. Maybe that attorney truly did not know anything, or maybe you just passed up a golden learning opportunity.
Jerry did you read my post? I went to him seeking his expertise. At that point in time the only thing that I was perceiving about him was precisely what you obviously seem to perceive about him now. And as far as my perception of myself (at that moment in time) I was just an inexperienced newbie who could stand to learn a lot from him in addition to the professional services that I was seeking. However this guy (because he seem to have never heard of the concept of "wholesaling") just started ripping me and all RE investors apart! He never even looked at my purchase agreement! He wouldn't even touch it! I am very aware of his credentials. In fact it took me several months to get up the confidence to solicit him for his business as I was suffering from an overwhelming inferior complex as a result of my reverence for both his title and expertise. Nevertheless do you mean to tell me that you don't see him as being even a ted-bit arrogant in his actions? Refusing to even take a glance at my contract? Calling "all RE investors" (especially my new friends here at BP) scam artist? I asked him if he had any experience working with RE investors and he stated "no, because there is none here" What the heck did that mean? And I did ask him to elaborate on his comment that "I was being scammed by my internet friends and the courses and therefore had no real concept of just how complicated RE investing really is." And as one example he shot out (rather sternly), "Most of the properties here in Manning, SC are heir properties and the person in possession of it can not sell you the property!" I responded with, " Are you saying that even after a property has gone through probate the executor doesn't have a right to sell?" I could tell in his face that he was shocked at my response and equally as irritated. As a newbie, I was just seeking some clarification, why did that seem to agitate him so much? Sounding even more irritated he responded with, "well yea they can if it's been through probate!" You may disagree with me Jerry but I think his irritation came from his realizing that (as ignorant as I may still be as far as RE investing is concerned), perhaps I wasn't as ignorant as his prejudice of me told him I was. I am sorry Jerry but I refuse to believe that all attorneys are like him! And like I said in my previous post I personally believed and still do believe that it is his arrogance that is the root cause of his negative actions and bitter perception of RE investors.
PS. I also reverence all of the professionals here at BP! None of the courses that I took came close to giving me the true confidence building nuts and bolts stuff like I find here on this BP site. The wisdom and sound advice that I read on this site to me is nothing short amazing! As a result of feeling inferior to you all, it took me quite sometime to start engaging in the discussions. Jerry please carefully reread my previous post. I never questioned that attorney's level of expertise. Nevertheless he felt it right to prejudge and question mine (as small as it may be in comparison to his) and for that I felt and still do feel that he was wrong.
"Ask him if he knows of a book that would help you learn more, or could he copy some of the state statutes he thinks you need to be aware of."
Jerry I do think that this part of your post is very good advice. If I ever find myself in a similar situation I will be sure to remember this. Thanks!
I've had realtors tell me what I do (buy/sell/manage property without a license) is illegal too. They are incorrect.
It's clear @Reginald S. has the wrong guy. That's part of the learning process, and he will most certainly search for other legal professionals. Not all attorneys are a good fit. Period. Find someone who specializes in what you need. Example: in NC if you are buying at the courthouse steps, it's best to have legal guidance from someone who knows every detail of Chapter 45 of NCGS. The average closing attorney doesn't know the nuances of foreclosure statute. My personal reference is 07SP107 (see also my post in http://www.biggerpockets.com/forums/41/topics/89570-trustee-rescinding-sale---california) which has all the grotesque details.
Regarding "30+ years experience and hundreds of closings under his belt" what I often see is 1 year of experience done 30 times. I can give examples of eyebrow raising attorney blunders and missteps. Same with RE brokers. Same with REI gone wrong. No one is perfect and few people know everything there is to know.
From purely a legal perspective, I agree with Account Closed comment "You are getting only half the story here, and wholesaling is complicated. That's why you see here a constant recommendation to see an attorney..." Just get a qualified attorney you can work with.
Closing attorneys perform the duties of what escrow officers and title officers perform here in California. The attorney examines documents, reviews title abstract, renders an opinion of title and prepares to receive funds to close once all conditions of the transaction are satisfied.
It may be more complicated in your state due to the custom of parties physically meeting in order to execute documents and exchanging money.
Therefore, if the counsel you seek is a "closing attorney" the opinions and advice is going to be heavily biased by their experiences. People being people, only know what they know, attorneys included. They are not as likely to be as confident when treading in unfamiliar territory. That makes sense.
It's also the reason why industry people prefer standardized forms most suitable for they types of transactions that typically engage in. After all, they have certain parameters that they legally must operate within.
And yet another reason why a closing attorney (or escrow officer) is biased can be their (negative) experiences with wholesalers and deals that don't close.
I suggest that you buy the forms disk intended for CA transaction from First Tuesday in Riverside, CA and modify/adapt to your purposes.
Thanks Chris and Rick. I found both of your post to be quite informative and they both made a whole lot of sense.
@Reginald S. , next time you get someone in that position, try asking the string of questions, why, how, what, etc. It is so irritating when small kids do it, but you soon realize how complex some topics are. That attorney may have been a jerk, or he may have truly been trying to help you either rightly or wrongly.
That is one of the dangerous things about posts on a forum, some advice is amazing. Some is dead wrong. if you have the explanation of why you should do or not do this it helps a lot in knowing if they actually have knowledge or if they just have an opinion with no basis.
It is true that not all attorneys are like that, but unfortunately a pretty high percentage of attorneys are unpleasant people. I don't know if the profession attracts them, or if it just encourages them to become that way.
Hopefully what you had was a lack of communication with this guy, but maybe not. When you talk with professionals try to get them to explain their advice, not just give it. It will pay off greatly in the long run.
Also, never use a form from one state in a different state without having it reviewed in writing by an instate attorney. Real estate laws differ a lot from one state to another. Good luck, I hope you do well in your investing.
In my experience I have found that "personality fit" in attorney - client relationships is just as important as attorney knowledge. If you are uncomfortable with any attorneys personality, approach or knowledge simply interview another attorney. However, from what you quoted I did not see that he called BP or anyone else scam artists. If he did he may have been referring to the infomercial gurus selling free seminars that end in $40,000 "lifetime" training sessions.
@Reginald S. , I am sorry I was pretty sick with a cold when I answered your first 2 responses. I am only coughing now, not feeling like someone is pounding a spike through my head. So,
Did I read your post? Obviously. You say the only thing you were perceiving about him was what I was perceiving. Not true. You said you had been warned you were going to waste your time, perhaps you did have a preconception, a self fulfilling one. He also said he was familiar with websites like BP (note you did not say he was familiar with BP) There are websites like BP that are rip offs that mislead folks on how easy it is to wholesale. You will hear the exact same thing said by many here on BP, and even @Joshua Dorkin on the pod casts. The attorney said you were only getting half the story, that to me says he thought you needed more information, that is not ripping that shows he is trying to be helpful to you in pointing out a possible lack of knowledge, that is not ripping all RE investors.
The attorney then asked for your seller's information to review your contract, he obviously thought you had a seller already lined up, the fact you did not and wanted to have the contract reviewed now before you had a buyer, caused him to offer to review your contract for $100 which is a VERY reasonable price. Attorney fees in my area are usually much lower than other areas and $100 buys you about 30 minutes of my time. Yet you claim he never looked at your contract, and you say he refused to look at it. Which statement is correct? You never mentioned in your post he claimed you were being scammed, but we often worry about that happening to folks who meet gurus over the internet. It is a reasonable fear. You said you smelled a rat and thought the guy wanted to sabotage your business but not one single thing you posted suggested that, perhaps it was a misconception on your part. The things he told you about the person in possession in a probate not being able to sale was true, and he admitted it could be sold later.(It can also be sold during probate with permission of the court but courts want to see close to fair market value so getting a great deal is tough). You say his voice was stern and he seemed irritated, that describes 80% of the lawyers I know.
You could be absolutely right that the guy was a jerk, and @Don Konipol is dead on that you need an attorney that you are comfortable with. Please do not go with the same preconception to the next attorney you go to see. It is very common to dislike something you fear, or those who disagree with your beliefs and do it strongly. Do not let that dissuade you from getting your contract reviewed by a good real estate attorney. My perception was that you over reacted and passed up an opportunity to have your contract reviewed for $100, which is dirt cheap.
Next time think how you would address it if a potential seller threw you the curve ball. How would you deal with that without offending him or losing out on a potentially great wholesale deal for you? Find out the motivation, find the problem, find a way to solve the problem that works for you and the seller. you obviously had already done the work to get an appointment and meet with the lawyer, kind of like the call from a letter campaign. You were 80% there then turned and left without making your purchase offer.
I honestly did not see anything in your original post that I thought justified your thought that this guy was out to sabotage your business. He could have been nicer granted. Do not let this or anything like this step between you and your dream, I actually wondered if you intentionally walked away mad to justify your fear in going there or as an excuse to not go the next step. I am not trying to offend you in any way. I wish you luck in achieving your goals. I again apologize for being so disjointed in my response, I am feeling much more human now.
@Reginald S. Dont let this guy put you off. We all have more to learn, thats one of the reasons so many of us spend time here on BP. Sometimes the best way to learn is by doing, you will make mistakes, just try to keep them small and carry to knowledge to the next deal, If you can, find a mentor to run your first deal or two by. With todays internet it doesn't have to be someone local, although that helps.
Sounds to me like you are on the right track getting your contract reviewed and getting ready to roll. Good luck, hope you knock it out of the park.
Wow thank you Bob Estler for the encouraging words! Your honest words of encouragement balanced with a little caution was just what I needed to hear! I took a break from this sight as a result of some of the negative rebukes and premature accusations that I got from some of the posters (not all). I started believing that maybe I wasn't ready for on the job training out in the fields. I starting becoming convinced that perhaps I needed to take a lot more courses before venturing out the door to further my RE-education out in the trenches. However I would like to tell you that I am back on track now! I have a mentor now (thanks 4 the advice) and I am confident that through my faith in God and both my many mistakes and successes, I will be almost as smart as you guys are some day... Need more like you Bob! - God bless!
Hey @Reginald S.
Palmetto State Title and Escrow handles mine. They're in Columbia off Bush River Rd. They've done several double closes on HUD wholeslae deals for me. Ask for Dawn
Hey thanks Chris, I really appreciate the referral and I'm sure Palmetto State does too. However through much prayer and belief we found a local attorney who called his tittle company to verify if wholesaling was legal. They responded back to him with a thumbs up and we've been up and running ever since. Thanks again though, we need more like you man!
Good deal, probably a lot closer to you I hope. Manning to Columbia is a hike. Just to make your life easier make sure the title company will let you use the end buyers funds to close your end. It makes life so much simpler and you won't eat profits for transactional funding. Alot of attorneys and title companies don't it won't, just be sure.
Hey thanks Bob for the very encouraging words! I'm up and running now and I don't think that I could have gotten where I am today without the encouraging support that I received from people like yourself. Thanks everyone for all of the encouragement, guidance, and support.
It sounds to me like he just wanted your money for wasting his time and could care less about your protection. Also, sounds like he wanted you out of "his" pool (wholesaling or re investing).
Of course, I could be wrong. :)
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