Do I need a lawyer?

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Do I need a lawyer?

Justin Gray
Lynchburg, VA · Member since 2015 · 3 posts · 0 votes

Hi! This is my first post and I need some help. I'm trying to get into real estate investing and I have been driving for dollars, and last week I found a house that I believe has good potential. It's a out of state owner in their 60s and the home hasn't been lived in for years. I dont know if they are willing to sell, but before I call them I was wondering if I should try to get pre approved for a loan and should I get a lawyer? I would like to try to do seller financing as my credit score isn't great because I haven't had a credit card very long. I grew up in a family that didn't believe in debt, so I didnt get one till recently. So if seller financing is a possibility should I get a lawyer to do the paper work and legal stuff or is it unnecessary? As for the loan, should I just call them and wait to see if they are willing to sell before I take it to a bank? Any help from someone who knows about this would be greatly appreciated!

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Aaron HowellBusiness Member
Real Estate Agent · Crozet, VA · Member since 2014 · 436 posts · 223 votes
10y

You probably don't need a lawyer.  You probably could just work with a local title company to get things moving.  You might go ahead and get pre-approved for a loan just in case the owner won't do owner financing ( that way you learn the process somewhat and get some experience in what they require).

As for the house that hasn't been lived in I would say check what local houses are selling for and that will give you an after repair value (ARV) [basically an idea of what a fixed up house is worth].

If the owner is up for selling the property definitely get a home inspection so you know what you're dealing with.

Hope this helps.

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  • Aaron HowellBusiness Member
    Real Estate Agent · Crozet, VA · Member since 2014 · 436 posts · 223 votes
    10y

    You probably don't need a lawyer.  You probably could just work with a local title company to get things moving.  You might go ahead and get pre-approved for a loan just in case the owner won't do owner financing ( that way you learn the process somewhat and get some experience in what they require).

    As for the house that hasn't been lived in I would say check what local houses are selling for and that will give you an after repair value (ARV) [basically an idea of what a fixed up house is worth].

    If the owner is up for selling the property definitely get a home inspection so you know what you're dealing with.

    Hope this helps.

    Story House Real Estate529 Reviews
    WebsiteView Page
    2Reply
  • Justin Gray
    OP
    Lynchburg, VA · Member since 2015 · 3 posts · 0 votes
    10y

    Thank you Aaron! I appreciate the reply and the information.

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  • Matthew Kreitzer
    Attorney · Winchester, VA · Member since 2015 · 726 posts · 387 votes
    10y

    For once, I'm also going to say you're probably good without a lawyer. At most, a lawyer would just review the agreement and maybe spot one or two nitpicky things that could slightly harm you down the line. Is it worth the consultation fee? Eh, personal choice.

    Disclaimer: Not legal advice. Not agreeing to be your attorney by virtue of posting this information.

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  • Justin Gray
    OP
    Lynchburg, VA · Member since 2015 · 3 posts · 0 votes
    10y

    Thank you Matthew. Im not worried about it if I get a normal loan and use a title company. I was thinking more along the lines of if they will do seller financing and we use a promissory note. I know there are websites and things that you can print them off of, or they show you how to write your own. I just wanted to know if I should use a lawyer to make sure everything is legal and good in my state. Or is it still something that I wouldn't need to get a lawyer for?

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  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    10y

    You probably do not need a lawyer, assuming you are versed in the legalities of contracts, but you won't know for sure unless the situation goes sideways and you end up in court.  I have purchased with sellers holding the mortgage and I use a lawyer drafted 30 page mortgage contract.

    Talk to the seller first, until you know where they stand you are wasting your time moving forward on any other front.

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  • David Beckett
    Surrey, British Columbia · Member since 2016 · 15 posts · 4 votes
    10y

    Hi John... If you are going to be doing RE, you will certainly need legal advice and contract review. Get a membership at Legal Shield.Com, If you use my name, I willget a commission, But it's $19.95 a month and you get unlimited consultation, contract review(up to 10 pages). (D Beckett, Surrey BC)

    I would suggest finding a good mortgage broker, (mine isalso an RE investo)r. The financing is  not the issue, it is do you want to be an investor?Find out if you can get a mortgage, how big, then ask the owner if he wants to sell. Offer... After reno value (use comparable housesin the same neighbourhood) x .75 - actual cost of renovation - legal costs(title search, closing etc) - holding costs(pay the mortgage and electric andheat etc) = max offer= MAX, so start lower (25%?). 

    Get an LLC. Talk to "Veil Corp" in Utah. They can tell you all about asset protection. This is where I set up my international Corporation.

    I do not mean to make RE complicated, it's worth the trouble

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