In this episode of The Real Estate Attorney Podcast, I explain (1) what I think real estate investors should know about LLCs and (2) why you may want a revocable living trust.

Disclaimer - Legal information not legal advice.  For legal advice contact an attorney licensed to practice law in your jurisdiction.

Part One - What I Want Investors To Know About Real Estate Living Trusts Are:

(1) They're super easy to create.

(2) Basic Definitions (Like what is a living trust)

(3) You Must Title Real Estate In The Name of The Trust

(4) Benefits of being your own trustee

(5) Benefits of using an Attorney Trustee.

(6) Generally No Liability Protection.

Part Two - Why You May Want A Revocable Living Trust

(1) Conventional Financing and RLTs

(2) Why You May Want To Keep Your Assets Hidden

(3) Hard Money and RLTs

(4) Your State may charge an outrageous amount of money to form business entities.

(5) Avoiding Probate, Incapacity, & Estate Planning

(6) Management By Absence

(7) It's revocable.

Thanks for listening!  Need a RLT or an attorney-trustee?  Visit tpf.legal to schedule a time for Attorney Pendergraft to call you within 24 hours.

For most of us, I think the answer is yes.  For me personally, I don’t have time to run a law practice and manage properties.  My time is better spent doing other things.  What I’m good at.  Drafting good deeds and evicting bad tenants.  Your time is best spent doing whatever you’re best at too.  Complying with local landlord-tenant laws, housing codes, and unruly tenants is a job in and of itself.  In my opinion, most people are not suited for doing it.  In my law practice, I have had to help many landlords that could have greatly benefitted from hiring a property manager.  However, feel free to manage your properties yourself it is is something that you love to do.

That said, there’s plenty of landlords that have contacted me that want to sue their property managers because they were unhappy with their services.

Although no wisdom from me can stop bad property managers from being a bad property manager.  My suggestion is that landlords need to realize that property management contracts are negotiable.  I’ve seen property management contracts where property managers are only obligated to do an annual inspection.  Well, a lot can happen in a year.  More mandatory inspections will be helpful to the landlord.

Property management contracts tend to hold property managers harmless for the tenant’s negligence, as they should if the property manager is prudent.  However, a landlord should have some recourse if their property manager is not doing their duties.

So in short.  Yes, I think property managers are great.  I think property managers are worth it and it’s worth the expense to have an attorney review or amend your property management contract. Unless you absolutely love property management, then, by all means, do what you love!

If the property management company is not willing to allow you to throw in some terms, then you’ve found the wrong property manager.

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Disclaimer!  This is legal information, not legal advice.  For legal advice contact a licensed real estate attorney in your jurisdiction.

Most States have a Statute of Frauds that require real estate purchase and sale agreements to be in writing to be binding.  Here are the elements of a real estate contract.

Disclaimer!  This is legal information, not legal advice, for legal advice contact a licensed attorney in your jurisdiction.</p>

#1 An Offer

Real Estate contracts must contain an offer.  I’ll buy your house at $X amount of dollars.  The person who is making the offer is called the offeror.  Generally, the buyer is the offeror.

#2 Acceptance

The offeree can accept the terms of a contract by signing it.  If an offeree makes any changes to the contract then it is no longer an offer, it is a counter-offeror.

#3 Offer + Acceptance - Meeting of The Minds

Once we have an offer and acceptance we what is called a “meeting of the minds.” Parties are presumed to have understood the contracts that they have signed.  It's wise to seek legal counsel before signing a real estate contract.

A party can seek to have a contract voided if a true meeting of the minds did not occur.  Such as they only signed because they were threatened by the other party.

#5 Identification of The Parties

A contract must clearly identify the parties. When dealing with businesses, they should be signed by an authorized person.

#6 Identification of The Property

The contract must clearly identify the property.  Generally, the address of the property is clear identification.

#7 Federal and State Specific Clauses

Real estate contracts should contain Federal and State required clauses such as lead paint warnings or disclosure requirements.

#8 Consideration

Consideration is a bargained for exchange.  A large majority of the time the consideration is money in exchange for the real estate.  However, it does not necessarily have to be money.  It can be anything of value, such as my priceless legal services.

Quick recap

• Offer
• Acceptance
• Meeting of the minds
• Identify The Persons
• Identify The Properties
• Federal and State Specific Required Clauses (lead paint stuff)
• Consideration