All Forum Posts by: James Miller

Recommendations from your peer group is what I recommend to people looking for lawyers + the lawyer's experience in an area of law. Someone who's worked with that lawyer before and liked the results for the money. We lawyers can be expensive and not all are created equal. It's also good to find one that you are able to communicate effectively with. I don't mean ease of access; rather, I mean that you understand him and that he understands you when you communicate. 

A consulting agreement is just that; you'd enter into a contract with a third party, they would pay you for advice. 

Hmmm. Don't do it based on a contract alone. Depending on your jurisdiction you may be able to use a business entity or an "exit" trust that takes title to it now but contains your terms. I.e. Trust takes title now for benefit of both seller and you then do the five year deal. If anything goes wrong you litigate the trust document and she can't back out. Talk to a lawyer in your jurisdiction about this. Do not DIY this contract.

You should get some recommendations on lawyers in your jurisdiction and then discuss.

I got started with two condos in Dallas. :) Dallas is great in that it's pretty "built out" and any new inventory involves at least tearing down some existing inventory first. Get yourself a good lawyer that you trust. You want to discuss entity structure, taxes, and asset protection. Yes, even if you're just getting started. The FHA premium is huge now and extends for the life of the loan compared to a conventional's PMI so if you can swing a higher down payment you might net more money in the long run.

Sounds like you'd rather be a secured creditor than a partner. If you want to help the newbies out, you could hard-money lend at a fair interest rate and take a lien. Then, if you want to share knowledge but not step up to partnership level, you could sign a consulting agreement between you and the newbies where they would pay for your advice but also indemnify you if you get anything wrong. 

Check with a lawyer in your jurisdiction first though. 

I'm a Texas lawyer, just not your lawyer. Anonymity really helps in deterring a plaintiff lawyer from taking a case on contingency. If the lawyer, during his asset searches in the public records, can't (easily) find non-exempt assets to seize after winning the case, the lawyer isn't going to be paid. If the lawyer isn't going to be paid, then he's not taking the case on contingency. If the dollar amount at issues isn't huge, the client isn't going to pay hourly. Meaning, lawsuit maybe avoided.

Trusts can help with anonymity. But, nothing is perfect. 

Hattie: If the case gets into litigation, I find it silly to think that the plaintiff won't be able to find out who the beneficiaries are. Who a trust beneficiary is may be directly relevant to the litigation and likely has no privilege preventing disclosure. If I put the trustee under oath in a deposition and ask details about the trust, he'd have to answer or risk contempt of court. 

Matt: you really should talk to a lawyer in your own jurisdiction. What works in TX may not work in CT. Each state really is like its own nation as far as laws go. And most lawyers only know their specific sate. 

Joe: insurance is important, but a properly set up holding company and operations company costs about the same as a year or three of premiums and provides much greater protection for the investor. I've worked as both he plaintiff lawyer and the estate planning and entity lawyer; proper use of planning *before* the risk occurs can make a substantial difference and can really shelter assets. A two or three company structure is usually worth its weight in gold (at least in TX). Most defendants (land owners) make the mistake to try and set up asset protection structures *after* the plaintiff is injured or the risk occurs. Then that makes things much easier for the plaintiff because his lawyer can allege fraudulent transfer act violations. As far as being able to easily sue and win against a holding company, it's really not easy if its properly set up. What you're describing is an improperly set up holding company.