I’m playing a game and my opponent is the time thief. So far he’s been winning, but I’ve been observing his strategies for awhile.

I’ve also been calculating my own strategies for some time now, and pretty soon I’m going to gain a very competitive advantage!

Image source: http://absfreepic.com/free-photos/download/game-wood-3351x2589_96539.html

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As law students, we are trained to identify the legal risks of a given scenario and then advise our clients of those risks. That is the essence of lawyering.

As a transaction lawyer, because we can recognize the potential for misconduct within a transaction, we have a fiduciary duty to protect our client’s interests in the transaction by structuring it in a way to optimally minimize such risks. Our three duties, then, are to:

1. Identify
2. Reduce
3. Deflect

Identify the nature and scope of any perceived risks that can disrupt the transaction.

Reduce the probability of loss (i.e., transaction costs, opportunity costs, out-of-pocket costs, or sunk costs) from those identifiable risks.

Deflect, to the extent most possible, the costs of inalienable risks.

Put another way, our goals are to protect our client’s interest (identify, reduce, deflect) & facilitate the completion of their desired transactional interest.

Source: Rick Daley, Real Estate Development Law, West Publishing (2011)

Here’s 5 Advantages:

1. High rate of return, typically better than stocks or bonds;
2. Tax shelter (depreciation, 1031 exchanges, and capital gains exemptions);
3. Hedge against inflation;
4. The power of leverage: making money with OPM;
5. Equity!

Here’s 5 Disadvantages:

1. Illiquid (not a quick cash option);
2. Local market risk (casualty from storms, changes in jobs or government regulations);
3. Requires expert knowledge (contractors, engineers, attorneys, banks, realtors, title insurance);
4. Asset management expenses, and
5. Risks (on-site, local market, regional, national, and international.

The tv shows make real estate investing look easy and glamorous, the reality of it is – it is not easy or glamorous.

Yes, you can make good money if you do it under the right conditions and you should own real estate, especially if you are currently renting.

You’re better off building equity and taking advantage of deducting the tax interest payments from your taxable income, than paying someone else’s mortgage off (rent).

In conclusion, with a decent plan of action, using OPM, you could fund your retirement lifestyle far better than relying on interest from your own savings and depending on social security.

Go, buy some real estate!

This is one of my favorite venues in Jax Beach…the Casa Marina Hotel.

Hi Folks,

Last week we saw an amazing array of properties and the luscious live-work-play community of Downtown Doral, a city within a city (Miami) in sunny South Florida. In today’s Virtual Tour, we’ll be exploring Downtown Jacksonville & it’s hip, urban lifestyle. Here’s a lineup of the places we’ll see on today’s tour:

• Springfield Single Family Residences
• Bayside Condominiums
• The Metropolitan Loft Apartments
• The Strand
• The Carling 11 East
• Churchwell Lofts
• The Broooklyn – Riverside
• 220 Riverside
• Visit Jacksonville Video Tour
• Jacksonville Art Walk
• MOSH – Museum of Science & History
• The Jacksonville Landing
• River City Brewing Company
• The Florida Theatre
• The Elbow – Bars, Restaurants, & Entertainment Venues
• Visit Jacksonville.com
• What to Do in Downtown Jacksonville in 2-3 Hours (PDF)

I hope you enjoy today’s presentation and would love to have you back next Saturday at 10 am for our next virtual tour of another South Florida community. Don’t forget to download your guide and have a fantastic 4th of July!

What to Do Downtown in 2-3 Hours 2014

Cheers!

John W. Tanner, M.S.

Realtor Associate

BHGRE Lifestyles Realty

Step One: Negotiation

This is where offer and acceptance of a purchase price are negotiated between a buyer and a seller, the purchase contract is then signed, and the escrow period begins.

 

Step Two: Due Diligence

Here, an escrow account is opened to hold the good faith deposit until closing. The due diligence period is a timeframe allowed for the buyer (and the lender) to conduct a reasonable inspection of the subject property to ensure that it is in marketable condition. This is done by ordering a home inspection, a property appraisal, title search, and a land survey. If financing is involved in the purchase transaction, the lender will begin the loan qualification process concurrently during this period and will issue a “clear to close” when all of the supporting materials for the buyer’s (mortgagor) loan file have been collected and verified.  Meanwhile, the title company will work with the lender to prepare all of the necessary transfer docs: warranty deed, mortgage, promissory note, and escrow instructions (payoff instructions for the seller’s existing mortgage, if applicable) and other closing costs.

 

Step Three: The Closing

Making it to the closing table is an exciting time for most home buyers. The contract is fully executed,  loan funds are disbursed (usually by wire transfer from the lender),  the buyer pays the remainder of the purchase price and other closing costs  as necessary, illustrated on the Hud-1  settlement statement, and the seller tenders clean title   (and the keys) to the new homeowner. Congratulations!

4 Common Legal Problems That May Arise Prior to Closing

• Statute of Frauds

  • The SOF traces back to the original English Statute of Frauds of 1677. It requires certain types of contracts, such as contracts for the sale of land, to meet 3 requirements:
    • Terms of the Contract (Parties, Price, and Property Description).
    • The Contract Must be In Writing (whether it be a formal contract or an informal note handwritten on a napkin).
    • Signature (the contract must be signed by the party accepting the offer – the “offeree”).

• Marketable Title

  • Almost every contract for the sale of real property, unless the contract specifically expresses otherwise, includes either an express or implied promise that the seller will deliver a merchantable (marketable) title. That is to say that the title will be valid and free of any clouds (encumbrances).
    • Two Types of Unmarketable Title:
      • (a) Less than Fee Simple Ownership (ex: seller has a life estate);
      • (b) Encumbrances on the Title (ex: lot is subject to a “right of way” easement).

• Equitable Conversion

  • During the executory period (the time between the contract signing and the closing) the buyer is seen as the equitable owner of the property once the contract is signed.  As such, the buyer bears the risk of loss should the property be damaged or destroyed.
  • In order to minimize such risk, the buyer may request a provision in the contract that specified the owner bears the risk of loss should the property be damaged or destroyed prior to closing. (This makes the most sense as the seller typically has property insurance coverage already in place.
  • Another alternative is for the buyer to purchase an insurance policy on the subject property during the executory/escrow period. Generally speaking, the liability runs with the land. In other words, whomever is living in the home usually takes liability of loss or damage.

• Seller’s Duty to Disclose

  • Most jurisdictions require the seller of residential real estate to disclose all known defects that:
    • (a) materially affect the property value; and/or
    • (b) are unknown to the buyer and are NOT readily observable by a reasonable buyer.

 

Describing Real Property

 

There are 3 Principal Types of Property Descriptions Used in the Continental United States.

1. Subdivision Map:  Lot & Block Parcel #’s are recorded in public records.
2. Metes & Bounds:  Descriptions are based on topographic features.
3. Government Survey:  Public Land Survey System or PLSS (Section, Township, and Range)