© 2008 by Wendy Patton
Some of the largest expenses you will incur as a Real Estate Investor will probably be your attorney bill. As investors we need attorneys for handling evictions, reviewing contracts, setting up our estates, drafting contracts, etc.
I started investing in real estate in 1985. As my investing business grew I built up a network of attorneys, this was something that just seemed to happen over time and thousands of dollars later. I first found an eviction attorney, since I had many rental properties. I then ended up needing to create a few LLC’s (Limited Liability Companies) for my various properties and partnerships. With this need, I hired a corporate attorney.
Over time I ended up with some tough cases against some of my past tenants owing me larger amounts of money. I wanted a “pit bull†attorney, a litigator, to go after them, so I hired a litigator. Over the years, my assets increased rapidly with my real estate purchases, and I found myself needing an estate-planning attorney. I wanted a living trust created. WOW and this is just a few of them.
I realized that legal fees were something that you must incur in any business; however, saving legal fees was even more important to me. I needed experts in all areas of law, but I hesitated to call each of them unless I really had to have their representation. Each call was a minimum 15 minutes I was billed for – at $200/hour – every time I called it cost me $50. Sometimes I would call for a simple question and get a $50 bill.
As a Real Estate Investor, you will have many questions. It is too expensive to pick up the phone and call an attorney for each little question you will have. So, what do we do? We either ask someone (another investor) who has experience, but they might not be giving us a legal opinion, or we do without. Both paths can be very costly or end up disastrous. Kathy Kennebrook has had the same experience in her Real Estate Investing business as well so she wanted me to share this important information with you.
Back in 1997 I was attending a real estate seminar and someone spoke on a service called Pre-Paid Legal. Up to that moment I had not heard of it, but I was fascinated by what it could help me save in expenses. I absolutely loved the attorneys that I had in my network, but I didn’t want to spend unnecessary legal fees either. To this day I still have the same attorneys as I did when I first started in this business, but now I also have the service called Pre-Paid Legal. It has saved me thousands if not tens of thousands of dollars each year!
Pre-Paid Legal has several different components to the plan. The first plan is called the Expanded Family Plan. It offers many services. It is not a be all end all for the real estate investor, but it is so reasonable, that you can’t afford to NOT have it. As a member this plan gives you access to A+ rated law firms in every state, all over the United States and also 4 Provinces in Canada. What you receive with this plan is amazing: unlimited phone calls to your local attorney firm, review of personal contracts up to 10 pages in length (no charge and unlimited), one business contract review per year, representation in court if you are personally sued (the trial and pre-trial hours continue to grow each year you are member up to 335 hours in year five), audit representation on your personal tax return with a tax attorney, drafting of yours and your spouses will (with updates each year), court appearances for moving traffic violations (accidents and speeding tickets), and much more. The great thing about Pre-Paid Legal is that it works in other states, other than where you live, if you need an attorney. I invest in many out of state properties. The attorney’s in my network are not licensed in those states. Pre-Paid Legal will refer me to an attorney in those states for my real estate needs, and also any speeding tickets. The cost for this plan is only $25 per month. You can see why it is a no-brainer if you are serious about investing in real estate, for that matter even if you are not.
There is also a Home-Based Business Rider available in most states. This add on plan gives the real estate investor: 3 business contracts reviewed per month up to 15 pages in length, 3 collection letters per month, and 3 business letters written on behalf of your business per month. As a member you will also get access to a website full of downloadable contracts and also many articles on small business. The website you will receive access to is called: www.gosmallbuz.com The cost for Home Based Business Rider, as an add on to the Expanded Family Plan is only $14.50 per month. If you are in a state that has this plan, you will definitely want to take advantage of it’s availability.
The last plan that Pre-Paid Legal offers and that Kathy Kennebrook and I personally have is the “Identity Theft Riderâ€. This plan will not only monitor your credit daily and tell you of anyone that touches your credit, but the plan will also restore your identity if it is confiscated and misused. Did you know that one out of every four families this year will be affected by Identity Theft? This plan can be added on for only $9.95 per month.
All of the plans are for the entire family: kids to the age of 23 if a full time student, and your spouse or significant other (if you live together). Identity Theft is for both partners.
I use Pre-Paid Legal with my current attorneys to formulate my legal team. For me, this service was, and still is a no-brainer. I could give you countless number of stories on how I have used it over the years and how it has saved me thousands of dollars, I’m sure Kathy Kennebrook can as well but here are just a few of mine:
Example 1: I was refinancing an apartment building and needed a rushed appraisal.
Unfortunately, the appraisal had mistakes in it and was not completed on time. I tried to get my money back. The cost was $2400! The mortgage company and appraiser ignored my many requests for reimbursement. I even sent certified letters requesting a refund. No response from anyone I was utterly and completely ignored. I decided enough was enough and I called Pre-Paid Legal. That same day they sent a letter out to the appraiser (no charge to me) and the mortgage company. Within 2 weeks we had received a check for $2400 returned to us. Amazing that my letters meant nothing, but a letter from a high-powered attorney firm got a response!
Example 2: When my daughter had turned 16 she had 2 car accidents involving other people (4 accidents in all, but that’s a whole other story) I called Pre-Paid Legal for representation for these two accidents and they went to court with us. At 16 years old you can lose your license for this many accidents in a short period of time. At both appearances they were able to get all the points removed and her record is pretty much clean. She did have to pay the fines and attend a 1-day class, but she didn’t lose her license nor did our insurance go up due to potential points on her record. Having an attorney on your team really makes a difference!
I felt the need to share this information with all of you. I wish I had known about the service when I was starting out as an investor. If you like what you have read about the service and would like more information, you can go to www.chooseyourlegalplan.com and review the plans first hand. If you like what you read, you can sign up directly right on the aforementioned site. If you have further questions please call Kathy Kennebrook at 941-792-5390 and she will be happy to answer them based on your specific needs or wants.
To your success,
Wendy Patton