Estate Lawyers Transitioning to Landlords Forum

[RobertGolddust]

Is it common for a real estate attorney to get sick of doing paper work, and then switch over to the life of luxury that is a landlord?

[Magic Hat]

If you've practiced real estate long enough you know that being a landlord can suck just as much.

[favabeansoup]

If you've practiced real estate long enough you know that being a landlord can suck just as much.

Yeah I would think that few people consider being a landlord a luxury life. It's not just collecting a check every month. OP go read some horror stories online about bad tenants and see the shit landlords have to deal with.

It's also not like real estate attorneys have some special in to being a landlord. All it takes is buying a property and renting it out, anyone can do that with enough money. Real estate lawyers might know eviction processes better, but anyone can learn those.

[UVAIce]

If you've practiced real estate long enough you know that being a landlord can suck just as much.

Yeah I would think that few people consider being a landlord a luxury life. It's not just collecting a check every month. OP go read some horror stories online about bad tenants and see the shit landlords have to deal with.

It's also not like real estate attorneys have some special in to being a landlord. All it takes is buying a property and renting it out, anyone can do that with enough money. Real estate lawyers might know eviction processes better, but anyone can learn those.

Do you even real estate?

[1styearlateral]

Being a landlord is easy when you have a management company do all the heavy lifting and deal with the scum. So essentially yes, you just collect a check at the end of the month.

[ruski]

Being a landlord is easy when you have a management company do all the heavy lifting and deal with the scum. So essentially yes, you just collect a check at the end of the month.

never understand how this is profitable on a small scale (maybe its not, but everyone seems to do it). from rent after you subtract maintenance costs, management costs (assuming you use per above advice), property tax, and rental income tax, what are you really left with? there has got to be better places to put your money. I guess if you assume 10% appreciation every year maybe it works out..

[favabeansoup]

Being a landlord is easy when you have a management company do all the heavy lifting and deal with the scum. So essentially yes, you just collect a check at the end of the month.

never understand how this is profitable on a small scale (maybe its not, but everyone seems to do it). from rent after you subtract maintenance costs, management costs (assuming you use per above advice), property tax, and rental income tax, what are you really left with? there has got to be better places to put your money. I guess if you assume 10% appreciation every year maybe it works out..

Yeah, I don't do real estate but I have looked into owning rental property. Having a management company can pay off if you own multiple properties, but for first time landlords that is unlikely. You are usually better off just putting your money in the market.

I'm not saying the idea itself is dumb, because it can definitely work for people. It's just not a luxury life and you don't just dip your toes in.

[UVAIce]

So I know a number of lawyers who have investment properties, but there are 0 associates or partners from my firm that have left to become "professional landlords."

There is a pretty good rate of return on real property when you're leasing it out, but it depends on your cost of capital, your rental market, tenants you attract etc. But being a residential landlord can be a tough game because unless you're a larger institution it's easy to be burned by an outlier tenant (i.e. if you get that 1/100 idiot tenant you don't have 99 other units to absorb that hit).

But i don't think being a real estate attorney is any advantage in the residential market because you're generally limited by statute on what you can do and your remedies will be tightly constrained. Commercial real estate is a different matter, but that takes a lot of money up front.

[Lacepiece23]

I just bought my first rental property. I will let you know how it goes. If you want to learn more about real estate investment go to biggerpockets.com. It is like a happier version of TLS for people who want to invest in real estate. I spent my whole 3L year reading up on it and listening to their podcasts. I probably will make some mistakes because I don't have time to properly source properties like people working a 9-5, but I can afford to make some mistakes because I make more money than most people who attempt to invest in real estate as a self-made person.

Also, the ROI should be somewhere like 15% cash on cash in a good cash flow market. Think secondary rust belt markets. This is not including equity that you are building in the homes. Thus, you can easily beat your loan payments with real estate. It also provides a good tax haven as you are now eligible for a lot of deductions.

[1styearlateral]

Most of the richest people on the planet are business and building owners.

IMO, commercial real estate is where the real money is at.

[ruski]

Most of the richest people on the planet are business and building owners.

IMO, commercial real estate is where the real money is at.

you're doing it wrong. you're looking backwards to see how to make money in the future - worst thing to do as an investor (i.e. judging future performance based on historical returns). most of these people made their riches in the 90s and 00's when real estate was soaring and appreciated in the double digits. They also got in the game when it was much more affordable. the market is very different now. the market is saturated with real estate investors and due to advances in technology it's much harder now to find a "steal", especially without connections. maybe if you got in at 2008 would be different story but back then you would have to be a cash buyer

[UVAIce]

Most of the richest people on the planet are business and building owners.

IMO, commercial real estate is where the real money is at.

you're doing it wrong. you're looking backwards to see how to make money in the future - worst thing to do as an investor (i.e. judging future performance based on historical returns). most of these people made their riches in the 90s and 00's when real estate was soaring and appreciated in the double digits. They also got in the game when it was much more affordable. the market is very different now. the market is saturated with real estate investors and due to advances in technology it's much harder now to find a "steal", especially without connections. maybe if you got in at 2008 would be different story but back then you would have to be a cash buyer

There is a still a lot of money to be made (and is being made) on real estate. Borrowing costs are so low and prices for real estate assets (depending on the market) are not that inflated. Across the rental market they are making market beating returns. Development is getting tougher in certain parts of the United States (most of the markets that need additional housing, which makes it a great market to rent to people.

But, to be fair, I'm a contrarian at heart. When people are running away from something I run at it and vice versa.

And real estate returns looks great as an individual until you run into your first real costs (i.e. it's all fun and games until you run into serious capital costs). Years worth of profit go poof when you realize the roof needs to be replaced, half the appliances don't work and and you have to deal with mold damage because your tenant didn't tell you about the leaking water (not to mention the ensuing plumbing bill to fix the leaking). This is all fine when you have a reasonable handle on the long-term costs and rent at an appropriate price point to cover those costs and have the liquidity to deal with emergencies. Many people will not do this right. Many people will lose money, come out even, or at best have returns that don't beat the market.