Side Business - Real Estate

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Side Business - Real Estate

Postby Anonymous User » Wed Oct 26, 2016 10:16 am

I'm a 3L and will be working in big law after graduation. I'll be in the firm's lit group (if it matters). After talking with a few of my friends from college and having a long time interest in this venture, we decided to explore the possibility of buying a few 1-2 bedroom condos in xyz city. We are going to create an LLC and I personally won't be signing any guarantys.

Not trying to get rich of this, just a way to make a bit of passive income on the side. Will my firm have a problem with this? Do I even need to disclose it to them? Any thoughts or experiences would be helpful. Obviously, if its a no-go, I'll just scrap the idea...not worth risking my firm career.

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Re: Side Business - Real Estate

Postby Anonymous User » Wed Oct 26, 2016 10:44 am

Can't offer much but pending someone else weighing in with more detail...

My firm raised this issue during orientation. To paraphrase what they said: "The firm needs to know when you are engaging in outside businesses, and in some cases may not allow it. If you buy a home and there is an attached condo you rent out, it is no big deal. If you are buying and selling properties regularly or managing a rental empire, it can be a problem. Obviously, many if not most situations will fall somewhere in between."

We are also required to fill out a questionnaire annually noting whether we have received any income from sources other than the firm job.

In short, ideally you should read your firm's attorney manual, and determine whether the question needs to be escalated. I don't know how helpful that advice is, because it would obviously be awkward to call recruiting and ask for a copy while you are a 3L.

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Re: Side Business - Real Estate

Postby Anonymous User » Wed Oct 26, 2016 12:07 pm

I currently own one duplex where I rent out the other side. I'm looking to buy even more rental properties. I'm only a second year associate. I think real estate is great for big law attorneys. It has a high rate of ROI and is something that you need capital for, which we are in a unique situation to possess at a young age (depending if you went straight through).

I told my managing partner over drinks about my duplex and he loved the idea. I don't think there is any policy against this at my firm, although I can't be sure. I've met several biglaw lawyers that invest on the side. They all say that they have made more money from real estate than actually practicing law.

favabeansoup

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Re: Side Business - Real Estate

Postby favabeansoup » Wed Oct 26, 2016 3:46 pm

I would disclose it to your firm just to be safe. A lot of firms have strong anti moonlighting agreements and conflict of interest rules, but just owning a few rental units without doing any outside legal work will never be a big deal. 99% chance your firm will be ok with it, but just disclose it anyway to be safe.

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Johann

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Re: Side Business - Real Estate

Postby Johann » Wed Oct 26, 2016 4:18 pm

youre fine. plenty of people at firms do this.

Diplock1

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Re: Side Business - Real Estate

Postby Diplock1 » Wed Oct 26, 2016 5:27 pm

Anonymous User wrote:I'm a 3L and will be working in big law after graduation. I'll be in the firm's lit group (if it matters). After talking with a few of my friends from college and having a long time interest in this venture, we decided to explore the possibility of buying a few 1-2 bedroom condos in xyz city. We are going to create an LLC and I personally won't be signing any guarantys.

Not trying to get rich of this, just a way to make a bit of passive income on the side. Will my firm have a problem with this? Do I even need to disclose it to them? Any thoughts or experiences would be helpful. Obviously, if its a no-go, I'll just scrap the idea...not worth risking my firm career.



Probably not a problem, but why not disclose?

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Lacepiece23

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Re: Side Business - Real Estate

Postby Lacepiece23 » Wed Oct 26, 2016 6:00 pm

Diplock1 wrote:
Anonymous User wrote:I'm a 3L and will be working in big law after graduation. I'll be in the firm's lit group (if it matters). After talking with a few of my friends from college and having a long time interest in this venture, we decided to explore the possibility of buying a few 1-2 bedroom condos in xyz city. We are going to create an LLC and I personally won't be signing any guarantys.

Not trying to get rich of this, just a way to make a bit of passive income on the side. Will my firm have a problem with this? Do I even need to disclose it to them? Any thoughts or experiences would be helpful. Obviously, if its a no-go, I'll just scrap the idea...not worth risking my firm career.



Probably not a problem, but why not disclose?


Better to ask forgiveness than permission? Unless they told you in orientation not to do something like this why disclose on the off chance they have a problem.

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Re: Side Business - Real Estate

Postby Anonymous User » Wed Oct 26, 2016 6:07 pm

Thanks for the input all. Definitely will disclose if we go forward with this idea. And, of course, would not attempt to do any of the associated legal work.

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Re: Side Business - Real Estate

Postby Anonymous User » Wed Oct 26, 2016 11:15 pm

Be careful. I had a colleague who was canned (in part) for this. It wasn't that he was doing it per-se, but it was causing a lot of absences during the day when he would go to close on new properties or deal with tenant issues.

Probably not a big deal for one property, but if you have a few, things can get complicated quick.

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Re: Side Business - Real Estate

Postby Anonymous User » Thu Oct 27, 2016 10:22 am

Anonymous User wrote:Be careful. I had a colleague who was canned (in part) for this. It wasn't that he was doing it per-se, but it was causing a lot of absences during the day when he would go to close on new properties or deal with tenant issues.

Probably not a big deal for one property, but if you have a few, things can get complicated quick.


Fair point. My goal is to be as passive as humanly possible... but idea doesn't always equal reality.

Anonymous User
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Re: Side Business - Real Estate

Postby Anonymous User » Thu Oct 27, 2016 10:27 am

Anonymous User wrote:
Anonymous User wrote:Be careful. I had a colleague who was canned (in part) for this. It wasn't that he was doing it per-se, but it was causing a lot of absences during the day when he would go to close on new properties or deal with tenant issues.

Probably not a big deal for one property, but if you have a few, things can get complicated quick.


Fair point. My goal is to be as passive as humanly possible... but idea doesn't always equal reality.


If you're that busy with real estate that you're constantly missing work for closing, then chances are that you have enough properties that you don't need to work biglaw anymore and don't care if you get fired.

Anonymous User
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Re: Side Business - Real Estate

Postby Anonymous User » Thu Oct 27, 2016 12:06 pm

Anonymous User wrote:
Anonymous User wrote:
Anonymous User wrote:Be careful. I had a colleague who was canned (in part) for this. It wasn't that he was doing it per-se, but it was causing a lot of absences during the day when he would go to close on new properties or deal with tenant issues.

Probably not a big deal for one property, but if you have a few, things can get complicated quick.


Fair point. My goal is to be as passive as humanly possible... but idea doesn't always equal reality.


If you're that busy with real estate that you're constantly missing work for closing, then chances are that you have enough properties that you don't need to work biglaw anymore and don't care if you get fired.


Not necessarily. The guy in question had about 20 properties, but they were only slightly cash flow positive and he didn't have that much equity in them. He still needed a day job.

Anonymous User
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Re: Side Business - Real Estate

Postby Anonymous User » Thu Oct 27, 2016 12:39 pm

Anonymous User wrote:
Anonymous User wrote:
Anonymous User wrote:
Anonymous User wrote:Be careful. I had a colleague who was canned (in part) for this. It wasn't that he was doing it per-se, but it was causing a lot of absences during the day when he would go to close on new properties or deal with tenant issues.

Probably not a big deal for one property, but if you have a few, things can get complicated quick.


Fair point. My goal is to be as passive as humanly possible... but idea doesn't always equal reality.


If you're that busy with real estate that you're constantly missing work for closing, then chances are that you have enough properties that you don't need to work biglaw anymore and don't care if you get fired.


Not necessarily. The guy in question had about 20 properties, but they were only slightly cash flow positive and he didn't have that much equity in them. He still needed a day job.


Yeah, I agree, but 20 is a lot. If he holds for 30 years, then he's easily a millionaire; thus, he doesn't need to aggressively save for retirement. I did not mean that he doesn't have to work, but he could very easily be making 40k passive a year and not need to work biglaw anymore. Maybe he could take a more 9-5 job and focus on growing his RE portfolio.



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