Today, David Pelligrinelli discusses what areas of the real estate investing should be done by a professional and also what you can handle yourself.
Legal advice and accounting are some of the key specialties that it can help have a professional or at the minimum, ask for advice regarding your deal. Find out other areas that you can handle yourself and who should be doing due diligence within your investment deals.
Mike: Welcome back to the FlipNerd.com REI Classroom where experts from across the real estate investing industry teach you quick lessons to take your business to the next level. And now, let’s meet today’s expert host.
Dave: This is Dave Pelligrinelli from AF. Welcome to another edition of the REI Classroom. We’ll start very quickly after a brief message.
Mike: This REI Classroom real estate lesson is sponsored by VirtualStaffNow.com.
Dave: Okay. We’re back. This is Dave from AFX. Welcome to the FlipNerd world and another edition of REI Classroom. Today we’re going to talk about what to do yourself and what to hire a professional for. It’s very tempting to want to DIY things in the investment world. The more things you can do yourself, you might think you’re going to save some money, and you also want to feel like you’re doing something in your business, and your business is investing. You want to do things in that business, but don’t make the mistake of doing the wrong things.
For example, getting good legal advice is something you don’t want to do yourself. Reading about other people’s advice online about legal things may not be the best way to get legal advice. There are a million blogs and websites and real estate investment platforms that have other investors that will give you legal advice. That wouldn’t have worked out too well for OJ Simpson in his trial, you don’t want to do the same thing. You want to get good legal advice from an attorney.
That doesn’t necessarily mean you have to hire an attorney for every deal. If you have an attorney that you can go to with an example deal that you’re doing to get good advice, maybe to get a contract set up, to get good suggestions on how to structure the deal or even what the risk might be, you can carry that over to your other deals if they’re similar.
However, if a year from now or two years from you’re doing a different type of deal, a different type of structure, a different transaction, maybe engage that attorney again or another qualified attorney to get some really good advice about how to structure that deal and what the risk might be. As time goes on and your deals become more complex, or maybe even the laws change or the market changes, again re-engage that attorney for legal advice.
Legal advice is not the only place that do it yourself may not be the best way to go. Accountants can be a good resource to structure your deals for tax purposes or maybe even to leverage the profits so that it might be good to delay some profits, even if the amount is higher up front.
Another place for do it yourself, unless you’re qualified that may not work is property inspections. Unless you’re a contractor or really know how to look for defects in things like a foundation, or defects maybe in workmanship or even electrical, those are things that you might not want to do yourself. All it takes is one expense for a few hundred dollars that can ruin your whole world if it burns the place down or the foundation shifts and you have cracks. There are many stories about properties that have become almost invaluable where there’s not any worth to them anymore because of something that could have been discovered in an inspection. So do it yourself works in some places if you want to paint or if you want to do some carpet, that might be a do it yourself item that works.
The last area where we see a lot of mistakes made is do it yourself due diligence. Checking title, making sure there are not liens, making sure there are not judgments. That’s something that professional title examiners and abstractors have decades of experience and training to know where to look. In most counties, there are four or five different courthouses that could have a title cloud that could affect your property.
So picking when to do it yourself and when not is an important part of the real estate investing business, and it can save you a lot of hassle and make you a lot of money. Thanks for watching another edition of REI Classroom. There are many more on the site at FlipNerd and we’ll see you next time.
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Please note the views and opinions expressed by the individuals in this program do not necessarily reflect those of FlipNerd.com or any of its partners, advertisers or affiliates. Please consult professionals before making any investment or tax decisions, as real estate investing can be risky.
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