Do you listen to lawyers?

11 Replies

Would you listen to a lawyer who tells you not to try an investing strategy that other investors have proven to work despite warnings from a lawyer who says it is too risky?

Originally posted by @Tony Marcelle :

Would you listen to a lawyer who tells you not to try an investing strategy that other investors have proven to work despite warnings from a lawyer who says it is too risky?

 Lawyers give opinions they don't decide law. Ask him for case law showing that it isn't legal. I'd check with a second lawyer. Keep in mind that what others can do in some other state doesn't mean that it is legal or wise in the state you want to do it. Also, if it is that "risky" then it is best to team up with someone already doing it to learn the specifics. A lot of people THINK they know how something is done but miss some important details and get themselves into trouble. Use lots of disclosures if it is "risky" investing.

The fact you don’t mention the strategy leads me to believe you already know it’s unethical at best and criminal at worst. Lots of unethical ways to make money in real estate. Sells trash on contract to poor people. Wholesaling houses from widows and uneducated people stealing their only assets equity. Selling trash turnkey properties to dumb out of state investors. Happens everyday and makes money. Does that mean you should do it? Course not. Hard work makes lots of money too. Plus you can sleep at night.

In this market you could buy any run down house in a good neighborhood. Watch you tube videos on how to do the work yourself. Do the work nights and weekends. 4 months later you’ll have 40k in profit.

I got started this way with another job, a working wife, and kids. Broke my foot, got metal shavings in my eye, broken a ton of fingers, got burned every which way and still made it happen. That’s just the attitude you need. It’s not forever like that, just to get a bankroll. How to screw people is the wrong attitude.

Good luck

Ask the lawyer why the strategy is considered too risky (the lawyer could be right). Other investors doing the strategy may be living in a Fool's Paradise that will end without warning (the economy softens, the authorities crack down, whatever). Also remember Warren Buffett's observation that risk comes from not knowing what you are doing.

the lawyer maybe sizing up your experience level or our business acumen.. I have been on both side of this coin.

Lawyer says I am fine I end up getting nasty gram from state.. Lawyer says we can beat this person or that and we lose.

If you want just is it legal or not that should be pretty easy discussion.

OK I see in another thread your asking about lease options.. and probably sandwich lease options and your lawyer is sizing up your financial ability to execute on your contract when the person you lease to stops paying you which is highly probable.. so that's probably good advice unless you have deep pockets and can cover a mortgage or lease payment for the time it takes to evict have the money to rehab the house once the tenant trash's it and then lease it again.

most who try these schemes do it because they lack capital and undercapitalized investors fail most every time.

this is what the lawyer is thinking.. how to you get through a default. And what is your liability when it happens that's what you pay them for .. not blue sky ra ra .. but reality check.

@Josh C. The strategy is lease options or sandwich lease options.

@Jay Hinrichs That is correct Jay. That is his reason for saying it is risky. I have heard most investors say a large non refundable down payment is supposed to somehow offset the risk if and when the other tenant buyer defaults. I can see how that can happen because imagine if the other tenant buyer loses their job, die, or have something else bad happen to cause them to stop making payments. Anything can happen.

If lease option or even subject to is not the right path to investing in real estate because of the "risks," what else is there besides wholesale? I am trying the wholesale thing and no deals has been closed yet. I need other options to close on a deal in case wholesaling is not the right solution to the seller's situation. The investing strategy needs to match the seller's reason for selling their house.

Originally posted by @Tony Marcelle :

Would you listen to a lawyer who tells you not to try an investing strategy that other investors have proven to work despite warnings from a lawyer who says it is too risky?

 Lawyers are like your accountant. They look at things in a vacuum based upon their area of expertise. They will always lean towards the side of caution as well. You should absolutely weigh what they say to you but know that overall business strategy is not a vacuum. Sometimes additional risks are necessary for career advancement.

I'm reading this thread while listening to the news channel is running in the background talking about Trump and his lawyers. I said to myself "some people don't listen to lawyers, or go out get 2nd, 3rd, 4th opinion till he gets one he likes".