People love to make jokes about attorneys, but a good real estate attorney is no joke. They can play a critical role in getting deals done. Months ago one of my clients bought a triple net asset for cash flow. It was a smart move, but the deal turned into a nightmare. Without my great real estate attorney and the team that I work with, this Eugene commercial real estate deal would not have gone through. They truly saved the day.
Managing dates is critical in real estate transactions, but this is particularly important for a 1031 buyer. My client had sold an investment property and was now buying a triple net property (a national chain dental clinic) in another state as part of 1031 exchange so he had critical dates to hit.
With a 1031 you have 45 days to identify your replacement property. You can identify up to three properties and you have to submit those options in a letter to the exchange facilitator so it is documented. My client had identified another triple net property that was medically related and he was interested in that because it provided better cash flow. So we pursued that property originally for purchase and we were 40 days into the due diligence when we discovered the seller was hiding major property defects. My client realized we had to terminate on that first property due to property deficiencies, so we were committed to going after the second property on the list because the third property had sold while he was pursuing the first. If the second property didn’t work, he would have a big tax consequence.
My client was excited about the second property because it was a newer building and would require less of his involvement in the overall management. We only had a short time period to complete the due diligence, and we needed to be quick and efficient in the process to avoid a tax consequence. We engaged a terrific real estate attorney, 1031 exchange facilitator, and escrow officer—all individuals who were accustomed to dealing with deadlines and making a transaction happen.
The seller was an elderly lady who lived across the country and had no computer or Internet. This meant we had to communicate with her broker, and the communication was slow. To move things along, the real estate attorney took over to ensure that an ALTA survey was completed to be sure the client was properly covered by a title insurance policy, that the purchase and sale contract was enforceable, and that the lease was good for receiving ten years of cash flow from tenant. The attorney was also instrumental in assisting with the review of all the closing documents. The attorney’s actions gave the client peace of mind and reassured him that when the deal was done, money would be flowing to him. In the end, it all worked out.
A Good Eugene Commercial Real Estate Team Makes All the Difference
An experienced broker is a critical component of your team. Brokers are paid to put deals together and get to the word yes, but attorneys remain invaluable. Their role is to look at the legal language of the documents to make sure they’re enforceable. (This is why you should never skip the step of having an attorney review the lease on a property you’re buying. Sometimes investors think they can read it themselves, but then they’re stuck with whatever goes with the lease.)
A good real estate attorney should also be someone who has experience in negotiating and who projects confidence. Without that, there can be a lot of back and forth, slowing down the process and costing you money.
Let me help you put the right team together to get your deal done. You can reach me at 541-912-6583.
Recent Comments