Attorney costs for contracts

[Anthony B.]

I have been calling around inquiring how much it cost to form contracts necessary for wholesaling. The least expensive rate so far is $175 an hour at 3 hours minimum charge. I called another attorney who was more savvy with the wholesaling process. He will charge me $2,000-$5,000 to draft the LOI, Purchase Agreement with Owner, and the assignment contract with the investor.

At the moment I do not have enough funds to pay an attorney that much money. If anyone knows of a more effective/efficient way please chime in with your knowledge. Until then, I will keep calling attorneys up and get more information.

[Account Closed]

You are in CA. Deal size will likely be on the larger side and the state is prone to law suits.

That said most everything you need has been done before so there are pretty standard contracts. The key is knowing what the details in the contracts really mean and when to adjust.

If you use a lawyer you will get a set of contracts that are tailored to what you want, you might be getting an education in what to watch out for and you will have the lawyer's insurance policy if there is a contract flaw that can be proven.

Do search around and ask others to see what they are using. I have been involved in a number of deals where someone picked up something from the web or from another investor. The scary thing is when the person does not really understand what the contract means.

If you can get one deal down you will have some working capital.

You could get a second job for a few weeks to cover the legal costs.

You could ask the lawyer to partner. You split the deal or agree to pay them after the deal closes. Expect to pay a significant premium if they work based on the results and not on an hourly basis.

You could go to Prosper dot com and borrower money if you have an OK credit score. Finance companies and other sources exist also.

There are many ways to sort out the issue. Just remember that you have to understand the contracts and what they really mean no matter where you get them from. I do not care what you pay. If you do not understand the tools you are using you will end up paying for the education later and it will cost more than you can imagine.

John Corey