Nelson Rockefeller- own nothing, control everything

Here’s Why I Love my Attorney

I just had an incredible learning session with my legal team.  Every time I meet with them, I can’t help but say to myself that they’re worth their weight in gold.  When I first transitioned form being a stock and options investor over to being a real estate investor, it was a huge culture shock.  The biggest difference being that real estate is WAY more of a team sport.  And your attorney is like your center.  The big guy who’s standing between you, and the opportunists who go hunting for high profile lawsuits.

Lawsuit central

Here’s a scary statistic.  The U.S. has about 10% of the world’s population.  And yet we have 90% of the world’s lawsuits.  That gives us an idea what kind of a culture we live in.  Every real estate investor who’s been through enough deals will tell you that getting sued is inevitable.  People know you may be rich, and that puts a bulls-eye on your back.

When I start coaching people, I usually start them off in the stock market because you don’t need a team to get started.  You are buying companies already formed as separate entities with extensive legal and insurance protection.  Research, book keeping, and marketing are already taking place on the front end.  All you have to focus on is finding businesses at a good value compared to their fundamentals.

Level the playing field

But as a real estate investor, your team and your network are your life blood.  My lawyer makes sure that there’s a defensive line between myself, my holdings, and my business.  It’s designed in such a way where if there’s an ongoing matter with one entity, it won’t spill over to affect my other assets.  And more importantly, if it does get damaged beyond repair, you simply detach the entity from your operation, and grow another one.  It’s kind of like when a spider loses its leg in order to escape and recuperate.

Is this fair?  Well let me ask you.  Is it fair when the likelihood of being sued is based on your wealth more than your character?  In a perfect world, there would be no need for separate entities.  But if you plan to get ahead in real estate, doing business in this highly legislated climate, then you have to fight fire with fire.

Hire a lawyer…and do it now

Anyone who has a real estate business, or any other type of private business, should be working closely with an attorney familiar with your industry.  They should know the best corporate entity and the best state to incorporate you in order to shield you from unnecessary liability, and minimize your tax burden, and protect the legacy you are building for your children.  This can further be enhanced by adding a good insurance agent, accountant, and general contractor to your team.  They all play a part in making sure things are assembled in a way that protects you.

Still not sure where to start?  Take a look at how we get people started in real estate investing here.

About The Author

herbertkoehler

I am a college drop out who found my passion as an investor. I love the many facets of finance, investing, and business. But even more than that, I love sharing what I learn with others.

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