5 Practices for Incorporating your Real Estate Business & More with Jeff Love

Looking to learn Who, What, When, Where, and Why to incorporating your real estate business? Here you go! Attorney Jeff Love joins us to teach us about the 5 W's of incorporating your business. If you're new to real estate investing you might not know the detailed processes and considerations you need to take in managing your business. This episode will introduce you to the advantages of incorporating your business and requirements you have to take into account in doing so.

Get in touch:

https://www.gibbsgiden.com/

[email protected]

 

Other Similar Episodes:

Secret Multifamily Systems to Maximize NOI with Anna Myers

Tax Strategies for Real Estate Investors with Ted Lanzaro

Jeff Love's Bio:

Jeff Love is a partner with Gibbs Giden Locher Turner Senet & Wittbrodt LLP. His practice encompasses all facets of real estate transactions, including drafting and negotiating purchase, sale, syndication, and financing transactions in connection with commercial, industrial, and residential assets. He also regularly drafts and negotiates office, retail, and industrial leases for regional landlords and tenants throughout the West Coast. Mr. Love has extensive experience drafting, negotiating, and reviewing real estate loan documents, including originations, modifications, note purchase agreements and other finance-related transactions from structuring through loan closing. He is a licensed real estate broker in the State of California.

Mr. Love also has significant experience in representing clients in a wide range of corporate transactions, including private securities offerings of debt and equity, mergers and acquisitions, corporate governance matters, federal and state securities laws, and asset-based lending and borrowing. He frequently serves as outside general counsel to a variety of businesses, advising on joint ventures, strategic alliances, partnership arrangements, entity formation, and general contract preparation.

Prior to entering private practice, Mr. Love served as general counsel in the private sector, providing him valuable insights into client needs and expectations. Such experience enables Mr. Love to advise his clients on relevant legal issues and balance business considerations to result in effective, but cost-efficient representation while also creating and maintaining positive working relationships with all parties.

Full Transcript

Taylor   0:01  

What's going on everybody? This is the passive wealth strategies podcast. Thank you for tuning in. today. Our guest is Jeff love. Jeff is an attorney. And today we're talking about some super important legal issues that you might not know about important legal issues, prac best practices, things that you need to know, if you're investing in real estate or starting your own company. We're talking about the five W's of managing your company, starting your company, starting your LLC, and what you need to do to maintain that Corporation the corporate formalities. I learned a lot from that. We're also going to talk about important considerations for negotiating a purchase and sale agreement.

I learned a lot from recording this interview with Jeff and I learned a lot going back and listening as well. I find that repetition of these interviews has benefited me greatly. Even though I'm there asking the questions I want to know, I get to go back and listen again. And I learned a lot. So yeah, there's a lot to be learned in this one. So get ready. For those of you who don't know, I'm your host Taylor load. I'm a real estate investor. I'm a real estate syndicator. I buy multifamily properties with passive investors and split return. I love talking about real estate investing, making returns, buying cash flowing properties and giving people a place to live. Thank you for tuning in. Once again, here we go with Jeff love. Jeff, thank you for joining us today.

 

Jeff Love  1:32  

Thanks so much for having me. Pleasure. A pleasure to be here.

 

Taylor   1:35  

Great to talk with you here in the middle of the corona virus quarantine. I for those out there who do not know who you are. Could you tell us about your background and what you do?

 

Jeff Love  1:46  

Sure. I am a transactional real estate attorney. So we focus residential and commercial deals all the way from acquisition buying the property due diligence potentially syndicating a deal finance indios environmental issues and then kind of disposition so the whole lifecycle of a real estate project, oftentimes referred to as a dirt lawyer. No, it's not Hollywood dirt. It's not gossip. Just the fact that we do real estate we do things that deal with dirt. Part of a firm called Gibbs in the Logar Turner Senate in whip wrote, that's a mouthful. But we're a Los Angeles based regional law firm with four offices about 32 attorneys that practice primarily in real estate in construction.

 

Taylor   2:33  

Cool, cool. And you're not the dirt lawyer in Better Call Saul. Saul Goodman sense of No,

 

Jeff Love  2:40  

no, I, you know, it probably be a little, you know, times a little little more interesting with certain things. Not that real estate's not but then No, I leave, I leave, I leave Saul to his fun and in Albuquerque.

 

Taylor   2:53  

Alright, good, good. So, today, I want to talk about incorporating Our real estate business and things that we need to know and you have a very interesting structure to talk about the five W's, of incorporating your real estate business. So let's get into that I need to know these W's.

 

Jeff Love  3:15  

You got the five W's, the who, what, when, where and why. So we'll go through them quickly because I could talk for a couple hours about it. I will bore all of your listeners who anyone that's investing in real estate once the liability protection beyond what insurance offers, you're gonna invest in real estate, Incorporated, incorporate with whatever that edit is going to be. The Why is really simple liability protection. You may have a multi family building, you may have tenants, they might have a party, someone slips and falls. God forbid someone falls off a balcony. There's a terrible tragedy.

Your insurance is only a million dollar per occurrence and they get a judgment for five million, there goes, there goes your equity in your project, there goes your investors returns, that entity is there for a reason. It protects your individual asset. That's, you want to run your real estate investment portfolio, like a business and you're protecting your other business, your other family assets, a lot of other benefits as well. But liability is going to be the most advanced advantage, reason to incorporate. You've also got these potential tax advantages. You know, it'll make you present yourself potentially in a more professional way to vendors, tenants.

I'm not you know, john smith creating the syndication deal, but we're Smith properties, the little black horse, someone but it really does make a difference the way you kind of present yourself, especially if you're a sponsor looking for investors done who we've done, why when you really want to incorporate Before you start signing binding contracts, if you sign a purchase agreement to purchase real estate, your name is now on that contract, whether you assign it later on, you still have personal liability. So to the extent you're starting signing deals, you know, even if you haven't closed yet, you're potentially opening yourself up to risk. So if you don't want to incorporate six months before you're even signing it, you may be your DMA through fall through and you may not need that entity.

But really before you start signing on that dotted line, that's your key to say, let me explore incorporating my business Let me think this project through so I can protect myself and make sure that maybe my other real estate deals or my or my house, my cars, bank accounts, those are protected from this new venture I'm going to enter into kind of the the biggest one is kind of what and where those are kind of that's the meat of incorporating your business. You probably You're, you know, Delaware a lot you may hear Nevada, you may hear Wyoming, I should incorporate in the state that I'm in. It really depends on the circumstances, the states like Wyoming and Delaware, they have in Nevada as well. They have really established corporate law, especially Delaware. So that's why there are more businesses incorporated in Delaware than any other state. And it's for a reason they're business friendly.

Nevada's benefit is really the ability to remain anonymous. Here in California, you actually have to disclose who's the manager of this entity, so people can see it, and that in other places, it gives you a little bit of a leg up if you want to remain anonymous. But really the key for most new real estate investors or those even experienced investors incorporated for the first time is it really money. So you want to think about how much this is going to cost me and for example, let's say that we are going to buy a four unit multi family property In California, and I really like Delaware. But if I incorporate my business in Delaware, I still need to qualify to do business in California. And what that means is I need to register in California as well, because they want their share of tax revenue course, of course. But the problem is now I'm paying Delaware, and I'm paying California. So did it really give me that much benefit to form Delaware? certain businesses maybe.

But for most real estate investors, you know, unless there's a reason not to, it most often makes sense to incorporate in the business where either you're operating or where the property is located. Because then you're not paying not just the you know, the taxes, but the administrative burden of making sure that you've got documents in your filing, you do all your filings in California doing filings in Delaware. So we really recommend you kind of focus on those two states.

 

Either where where properties or where you're located.

 

Now the biggest issue is what so you've got a number of different entities, you've got your sole proprietorship, which is if Taylor or Jeff wanted to just start off by real estate business and we're or business. You know, most independent contractors may be operating a sole proprietorship, downfall, there's no liability protection. You have partnerships both general and limited general partnership would be if we entered into business together rather than just one of us. But the problem there again, there's no liability protection so you don't get the full benefit of incorporating your business unless you're getting that liability protection. So the ones most real estate businesses focus on are limited partnerships. Potentially as corporations, though there's some significant tax advantages there. Or LLC s. LLC is kind of new . It's new , it's been around for about 30 years.

But in terms of entities, it's one of the newer ones. And that takes the benefit of, of kind of the corporation and limited partnership. Because both in limited partnership and LLC, they have what's called through as Pastor taxation versus a versus a corporation. So you're not paying Uncle Sam twice, you're not the business is paying tax and then you're paying tax on your dividends that any income flows through to your investors and you're paying tax once. So LLC Limited Partnerships are typically the ones to focus on. They each have their kind of pros and cons Limited Partnership for one if you need a general partner, general partner has unlimited liability. So either you have unlimited liability, or you're creating another entity, like an S corp or a corporation or an LLC to act as that general partner. So it's got a little bit more complexity. Some people aren't, you know, You're big funds are limited partnerships.

But most real estate investments, especially when you're starting out, if you want to incorporate your business, I would explore looking at an LLC, because it's very flexible. If you've got investors looking at kind of waterfalls or special promotions, it allows you to know that the ownership interest doesn't necessarily have to correlate to profit distributions. So it's just a flexible entity and it allows you to run your real estate investments like a business, it gives you liability protection. And in the long term scheme of things, the protection that it offers really does outweigh the cost that it's going to for them, it's going to cost you to actually create it.

 

Taylor   10:41  

So you've said some a bit ago about sole proprietorship, not offering liability protection. And I wanted to make sure I understood that and also that in light of single member LLC and what is the you know, differentiator there because we might have a few single member LLC owners out there listening and I'm one of those so like to understand the difference between those two,

 

Jeff Love  11:07  

of course. So your individual proprietorship, say, Jeff love, I want to go and create a Jeff's taco shop, we'll jump out of real estate for a minute and center. I got a DBA. I'm operating as a business, I can open a bank account, I'm holding myself out to the public as Jeff's taco shop. But I don't, I don't have an entity. I haven't created anything. So if someone gets food poisoning and gets super sick and they decide I'm going to, I'm going to sue Jeff because he made me bad tacos. He Sue's me. All of my assets are at risk, not just my taco shop, your single member LLC. It doesn't matter how many members you have, whether it's one to 10 or 100. You still have that liability protection with a single member.

The difference there is you're really why people are called single members versus multiple Numbers, you don't have to deal with partners. So you're not getting k ones you're not getting, you're not filing a partnership return, everything is just flowing through to your personal tax return. And that's the main difference between those. And it's not just a liability, you when you're exploring your entity, you really want to take in kind of the full picture, because in certain certain circumstances, if you're buying, you know, maybe a two to four unit property, the lender you're exploring with may not allow you to take title in that entity, or you may be able to get a much, much better rate if you take title as an individual.

So for example, when I bought a quad on investment A few years ago, I had to take it in my family trust because the rate was so much better. And eventually I was able to move it over into an LLC. But the risk there was I was trading my lower rate for liability for that interim period, which you know, weighing all the risks. In return, I thought I was able to manage with insurance. But you do want to weigh everything and look at that big picture when you're deciding what I could incorporate as and why.

 

Taylor   13:11  

So I'd like to talk about, you mentioned by actually, I know you didn't. So I'd like to talk about piercing the corporate veil. And so there's this thing out there where people think, well, you start your LLC and then you say, I'm just taco shop, LLC, and I'm gonna go, well, wholesale properties in a taco shop, but I'm just gonna have this LLC, and it's just gonna protect me from any liability, and I'm good to go. where, you know, maybe I'd like to talk about best practices around maintaining that corporate veil and some of the bigger mistakes that you see people making. We don't need to stick with real estate. But you know, those of us that are not lawyers need to know these important lessons on maintaining our Corporation and not making those big mistakes. stakes. What do you see people you know, doing screwing up their LLC these days?

 

Jeff Love  14:07  

That is a terrific, terrific point, especially when we're talking about especially true. I mean, especially when we're talking about a single member LLC. And it's just me, it's, you know, I don't get I don't have partners so I can kind of maybe look at that LLC as a piggy bank or maybe move money in and move money out and piercing the corporate veil. It is a senior, mostly lawyers like us because we think it sounds cool. Here's piercing the corporate veil.

But what it essentially means is, when you create a company, whether it's an LLC or a corporation, it's a separate entity. You as an individual are different than that Corporation. It has a separate legal existence. So you are separate and apart. So what you don't want to do is you don't want to start commingling assets. So we'll stick with Jeff's taco shop because I think that sounds cool and That's gonna make me hungry, but tacos. I don't, I can't take the business. You know my money that I'm making from Jeff's taco shop and put it into my bank account when the income that I make as a lawyer and then take my income from a lawyer and put it into Jeff's taco shop and take Jeff's taco shop and use that money to go buy groceries at the grocery store for myself personally, I'm commingling the money between the two. I need to keep just a taco shop, a chef's taco shop, and essentially bring in when I distribute money to myself, that's fine.

But I need to any money I'm spending in that entity needs to be for that entity. I can't make the money back and forth. Because if you do, and you end up getting sued by a disgruntled investor or a Trump customer, they can go and try to pierce that veil. What that means is they're going to go into court and say this entity is not a real entity. It's really just Jeff, you know, operating a business as himself. He has In respect to the corporate formalities, he hasn't treated it as a separate entity. So we're going to disregard that. And we're going to disregard the liability protection that it offers, and we're going to be able to go after him personally. So that's a great point, especially if you are a single member LLC, you need to treat that LLC as a separate company, and make sure that you keep your assets, especially bank accounts, separate from the two different ones.

 

Taylor   16:29  

Interesting. So you said something there that really struck me that I think we should try to remember is corporate formalities. And, you know, for the busy professionals out there, you know, we might know your corporate formalities from having a job, you know, you know what that's like, but from having a real estate investing business that you maybe run out of your house, you don't have a separate office like and knowing what say counts as commingling. assets and commingling monies I think it's maybe hard to gauge the the risk of You know what, what's your what is working on your business in your home office imply Are you generally safe there or you know if we're not taking money out of the bank account to go buy groceries for home and we're expecting those like, where some of those gray areas falling for us in terms of respecting the corporate formalities.

 

Jeff Love  17:31  

When you're in the gray, it's not as bad so you know, you can work on your LLC, you might be doing records from your home. That's not a problem, what they're really getting at in court when they're talking about piercing the corporate veil is you're taking money directly out of your LLC, and you're using that money for personal expenses. You maybe you have maybe you have one bank account, and you're using that bank account for your your real estate project and then you're taking that and you're doing home renovation and then you're using it To go on a trip, well, how do we know what money really belongs to the corporation and what money belongs to you?

Because if I'm a plaintiff, and I'm suing you, I don't know what belongs to the corporation and what doesn't. So I'd say the number one thing and keeping it separate is really money, you know, create and create a bank account for your LLC or your company. And that bank account should be used to pay expenses for the company. When there's profit, you move it over to your personal bank account. And, you know, if the company has additional money, and there's no need to raise capital, you can always put money in. But you want to document that and that would be an additional capital contribution to the company. Obviously, let your kind of accounting be No. But do you want to treat it like it's a separate company?

Like it's not you as an individual, it is a separate company. It has its own books and records. Maybe you're tracking your profit or loss, whether it's an Excel spreadsheet or hire QuickBooks wherever you're doing it. It's just really maintaining those separate records, separate bank accounts. Treat it like it is a separate company from you as an individual.

 

Taylor   19:04  

Okay, and before you take those funds to go on a vacation or something, maybe treat it as a distribution and talk to your account about how to properly document that, you know, because we, ultimately we form these companies because we want to make money, we need to get that we need them to make money, and we need to get that money out so we can use it. So we need to know the right way to do that.

 

Jeff Love  19:28  

Exactly. And you've said it, you know, you'd make yourself a distribution, you document it, there's a check going to your bank account, and it goes into the kind of the off at a loss of the company so you can see it and you can track it. So if there ever was a problem, you know, this was a distribution of profit that I was taking for myself because I wanted to go to Tahiti for a week and my business is successful. I'm a great real estate investor and listening to either write podcasts and you know, I know what I'm doing and I'm getting that profit

 

Taylor   19:59  

nice Nice. So, there's another thing that you brought up that I really wanted to, I really wanted to learn about honestly, you know, you, you mentioned you, you'd want to talk about this the top 10 issues, syndicators need to focus on when negotiating a PSA and I think especially right now, during the coronavirus, pandemic, you know, I'm sure a lot of people are scrambling with their their psats to see Do I have an out I actually noticed. I don't know whether you know this or not. I looked up on Google Trends, force mature. I think that I looked that up on Friday. It is at all time highs right now by dormice margin.

 

Jeff Love  20:41  

Oh, yeah, that is and I've gotten I can't tell you how many calls that happened last week. It depends on how that provision is written because a lot of times with tenants, it doesn't exclude the payment of rent, and a lot of times it's written more for government shutdowns or casualties. Events like an earthquake, fire tornado, it doesn't always include a pandemic, which is what we're going through now. So it doesn't exclude that, you know, but it's something to consider.

We'll do it so you can talk about the top 10 really from the buyer's or seller's side that they want to be a little bit different. But sometimes you hit the same issues, from really from a buyer's perspective, negotiate a purchase agreement, whether it's, you know, you're buying a single family home, you're buying a commercial warehouse, you buy 100 million hundred unit multifamily property, the number one thing in or maybe not 100%, legal in nature, something to watch out for us. Read the agreement. You may have your lawyer do it, but you really want to kind of understand what you're getting into, especially if you actually if you're buying you know, let's call it a call. We're going to buy a duplex as an investment. As you know, we're starting to invest.

I found a great duplex In California, for example, we still use a form by the California Association of Realtors, the same form you use to buy a single family house. And it's something that's prepared by brokers really, for brokers, since they can't prepare legal documents, and it doesn't always include the things you'd want, like an estoppel certificate, and you may not know what you're missing, or know that, you know, there's something that I'd like to have to read the agreement, make sure that you understand and if you don't, whoever your advisor is whether using just a broker or an attorney, have them explain the provisions that you don't understand. From there, I mean, the second issue is probably looking at the representations and warranties when you're buying a property. A lot of times it's glossed over and it's never important until there's an issue, but when you're doing due diligence, you may have 10 days you may have 30 days, 60 days, but there are things that will not come up in that 60 day, even 60 days. Hear that you may discover six months or a year later.

So your representations and warranties. That's how you protect yourself against going against a seller. And maybe it's maybe I'm buying a duplex and next door is a gas station. And there's underground underground contaminant water contamination that's flowing underneath my property. And I wasn't able to learn about that until later on. Maybe in my purchase agreement, because of that specific concern. I'm asking the seller for, you know, to really represent that he has no knowledge of hazardous materials or any environmental issues with the property. Without those representations, I've got no recourse against the seller, because most commercial deals, you know, five units and above, the seller is going to disclaim all conditions with respect to the property and say, I'm only liable for my representations, you're doing your own due diligence. So without those representations, I have no recourse.

Another issue kind of related to representations of warranties is how long do they last? A lot of agreements, they may last, they may merge with the deed at closing. And once you close the representation goes away. Another deal, it may be for three years, or somewhere in between in every document, especially form documents, they're different. And just because someone presents you with what looks like a pre printed form, doesn't mean it's not negotiable. If I'm the buyer, and it says three years, I'm excited beyond belief, and I'm going to leave it but if I'm the seller, I'm crossing that thing out and I'm going to write you know, underwrite three months. That's it. You got three months to figure it out, or I'm off the hook. Because as this I'm a seller. I want to be able to, I want to be able to kind of pick up and walk away. When I'm done with the property. I'm done. Yeah.

 

Taylor   24:53  

You want that liability hanging over your head.

 

Jeff Love  24:55  

Exactly. I do not want that liability. When I sell it. I want to be done. But it's the best I want to be able to get in there and kind of get my feet wet and see if there's anything I missed. Again, representations and warranties, you know, one issue, but kind of many issues within that the next one I look for, especially this year bigger deals, you know, if you're talking, you're gonna buy 10 unit property, or a commercial warehouse and industrial building, as a seller put in a lot of time to sellers going to prepare the purchase agreement. So have they put in some type of cap on their liability? A lot of times you may see a 1% or 2% cap, and maybe I'm talking about a $10 million deal and a 1% cap on a $10 million deal.

How much is that going to get me if I'm really damaged, that doesn't offer me much protection. So you really want to get someone experienced in your market and see, is that 1% reasonable or should that really be three or 5%? So I understand really, what's my recourse again? against the seller, if this goes with this goes poorly. And really how long do I have to go after him? And how much can I go after him? So those are, those are kind of the 123 issues with reps, reps and warranties. Another issue you probably want to look out for, look at your estoppel certificates and make sure you're able to get one that's a really important item that's often overlooked, especially with new real estate investors would want to stop or certificate is is it's, you're asking the tenant, whether it's a residential unit or a retail space to honor and tell you what's in their lease. So it may say I'm paying this much in rent, there's no default.

And when they sign that certificate, they can't deny what's in that certificate later. And the word of stumble there a stop there is stopped from denying that so they can't come to you in six months and say hold on buyer. I had Deal with your seller. And he said I could live here for five years and only pay $100 a month. Without that estoppel certificate. You can fight the tenant and say no, but now you're incurring litigation cost. And if the seller didn't make an agreement, and you didn't see that side agreement, if it's a piece of paper that wasn't disclosed, maybe you're already past your deadline with the seller. You could be stuck. If you've got that installed a certificate. You hold that up and you waive that the buyer and say, No, no, no, no, you You said that right here.

And there goes that argument. Even if you were unable to get one from the tenant, a lot of times you can get it from the seller as well, and they'll sign in a sample certificate, which is another way to keep them on the hook. Oftentimes, it may not be as good as the tenant because a seller especially if it's an LLC, as so many people are creating and they've distributed all that money from that LLC. What's left over, you may have a shell of an entity

 

Without many assets to kind of go after.

 

Those are I think we've covered five that, you know, those are probably the ones that are probably the biggest ones that I kind of be worried about, for your kind of run of the mill purchase agreement. Other things you want to pay attention to kind of maybe on a smaller scale, you want to maybe maybe look at the notice provision, make sure because it's really important when you're sending notices, especially if it's waiving contingencies. You want to make sure you're sending it the right way, and you understand how you're sending it. So that's one you may not think gets negotiated, but some it often does, especially with our you know, day and age when we're talking about technology, when I'm sending an email.

Does that count as notice? Does it count today or does it count tomorrow? When, when and how, when and how does that work? Another issue that may come up from time to time is the ability for a buyer to assign the agreement. If I'm entering as myself and I create my LLC later. No, I want to make sure that I'm able to sell it to that LLC and especially if I've got a great deal and I don't want to have to drop out of the property, but I don't want it to affect my financing. I want to be able to have that flexibility to essentially move this purchase agreement where I can other issues, you know, heavily negotiated, you want to look at obviously due diligence time period is very critical.

And to the extent you think you may need more time, you kind of want to weigh the risks, you don't want to be you know, you don't want to be annoying and hard to deal with with your seller. But at the same time, you do want to protect yourself when you're negotiating it because what I see a lot as an attorney is buyer, you know, let me just sign the deal. I can always back out if you know, in a month if I don't like it, but what happens is the buyer goes out and they may get a phase one and do environmental tests.

They may underwrite it, they may form an entity they may start shopping to their investors. All of a sudden they need two more weeks for financing. They go to the seller and the seller says no, well, what do I do? I can't close. But if I back out, I lose all my money. I'm kind of between a rock and a hard place where if I had tried to negotiate a little bit more upfront, I might be able to soften that and maybe, maybe we're cutting extension for a little bit of a fee, but something to protect myself because on your bigger deals, your due diligence costs are going to increase, especially if you have, you know, you have a broker, maybe you have an accountant looking at something you've got other team members, maybe you haven't, you know, hopefully you have an attorney looking at it.

Those costs kind of go up in that due diligence period. Those I think those are the major issues to consider. every deal is different. But if you kind of focus on those kind of top 10 issues that will get you leagues ahead of Where you would otherwise and you kind of understand the deal, you understand the timing, and know that I've got x amount of days to kind of go out and raise money if that's what I'm doing X amount of days, go talk to my lender to review stop loss certificates to review due diligence. So I understand the process of the purchase and enabled to have kind of a smooth transaction,

 

which are rare, you know, smooth transaction, you know, that's

 

the golden egg that we're looking for. But they do make they do make it easier if you're able to kind of work those things out up front, and kind of take the bird's eye view approach when negotiating a purchase and sale agreement,

 

Taylor   31:38  

nice. If you know, it's funny, you bring that up. The recent deal I'm involved in, we got a free extension, because our financing contingency required the seller to provide documentation to our lender by a certain date. They missed that date. So we got 30 days where normally you can pay to an extent And that'll be in the contract as well. But in a commercial real estate deal, that extension could cost you $50,000. Now, it's not a cost, it's a deposit, but it's still 50 grand out of your pocket that you really rather hang on to, right.

So it can be in your favor to really negotiate that well, as well, because delays on the seller side can lead to extensions that can lead to your benefit, because interest rates severely came down during those 30 days as well. So, you know, that ended up working out well. So kudos to the lawyer on that one. But these things can be very beneficial. So right now, we're going to take a quick break for our sponsor. All right, Jeff, I've got three questions. I asked every guest at the end of the show. Are you ready? I'm ready. Let's do it. Great. First one, what is the best investment you've ever made other than in your education?

 

Jeff Love  32:53  

I'd say it's that first real estate property I've helped investors for so long kind of investing in their own deals, and I was never able to do it. And the first kind of four year apartment building I bought was scary beyond belief, not knowing that

 

I knew all the legal side but the business side and actually just jumping in and doing that first one.

 

No question that that's the first one. The first deal is always the hardest, but once you look back, you will never regret it. If you know, just just make sure you're being conservative in you know, in your approach, but buying that first deal.

 

never regret it.

 

Taylor   33:31  

Yeah, if you're good deals the first one, it'll be your best investment you ever made. Not even necessarily from the numbers on the other side of that. We have the worst investment you ever made. What is the worst investment you've ever made?

 

Jeff Love  33:45  

Oh, that one, that one that sounds tougher one. The worst investment I ever made was probably the first car I bought and I know, not only overpaid for it, but I just thought that Mustang was the coolest thing ever. And all it did was leak oil and breakdown from one thing after another and it taught me a good lesson though is listen to your dad when he tells you not to do it because sometimes our parents have had experience with these things. And that could have saved me a lot of

 

heartache and money.

 

Taylor   34:23  

Wow. Wow. Nice. My favorite question at the end of the show is what is the most important lesson that you've learned in business and investing?

 

Jeff Love  34:36  

Have it

 

Jeff Love  34:38  

it's two parts, know what you don't know, and have the team around you to be able to help you. Not even just a real estate business, but as a lawyer. No lawyer can know everything about every aspect of life in real estate. So having no partners around where you can bounce off a question or investing in a real estate deal, where I've got a good broker that knows the area I've got a good accountant that can help me, you know, make sure I'm doing every correctly or be cost segregating on a building and saving money in my pocket, a good attorney that that that can protect me and I never know his value until the end because the stings never went wrong.

Good insurance brokers, you know, you can't understate insurance because it's a cost. And you won't appreciate it until you need it. And then once you have it, and you had that good broker to Wow, they're going to cover me for this and I should pay this deductible. I've seen it too many times. It's just having that team in place is gonna put you, you know, in a great position and you're able to rely on these people with their own expertise, so you can focus best on what you do.

 

Taylor   35:46  

Nice. I like that. I like that. Well, thank you for everything today. A lot of a lot of great lessons. Um, I go back and listen to all the interviews and I'm really going to enjoy this one because there's a lot of information to go back and digest. And I always catch things that I didn't catch the first time around. Even though I'm here for the discussion, I always catch up. And I know I'm going to learn more going back and listening to this one more time. So I'm looking forward to that. Thank you for everything today. If folks want to learn more about you more about your business, where can they get in touch with you?

 

Jeff Love  36:20  

First place I'd go is to check out our website. It's https://www.gibbsgiden.com/ . My email is [email protected] or you can give me a call as well. Always happy to talk to real estate investors.

 

Taylor   36:35  

Nice, nice. Well, once again, I really appreciate it. Thank you for taking some time today. I hope you stay safe and healthy. They're in the LA area during the coronavirus pandemic. And to everybody out there and thank you for tuning in. If you're enjoying the show, please leave us a rating and review on Apple podcasts. very much appreciated, helps other people learn about the show, and it helps me out so I appreciate it. You know anyone who could use a little bit more Passive wealth in their lives. Please share the show with them and bring them into the fold. Thank you for tuning in. I hope you are staying safe and healthy. And your family is all doing well here during this coronavirus pandemic. And we're all going to come out on the other side, hopefully better, smarter and healthier. Thank you for tuning in. I hope you have a great rest of your day and a great week. We'll talk to you on the next one. Bye bye

 

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About the Host

Taylor on stage

Hi, I’m Taylor. To date I’ve acquired or partnered on over $250 Million in Commercial Real Estate Investments. I help busy professionals invest in multifamily and self storage real estate through my company NT Capital

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Real Listener Reviews

Extremely useful podcast
Extremely useful podcast
@thehappyrexan
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Short, impactful with excellent guests. If you have a full time W-2 job or business and are looking for ways to get involved in real estate on the side, this is for you.
Simple & effective information!
Simple & effective information!
@jjff0987
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This podcast is worth listening to for investors at all levels. The information is simplified for the high level investors but detailed enough to educate seasoned investors about nuances of the business. I recommend!
Awesome Podcast!!!
Awesome Podcast!!!
@Clarisse Gomez
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The host of Passive Wealth Strategies for Busy Professionals podcast highlights all aspects of real estate investing and more in this can’t miss podcast! The host and expert guests offer insightful advice and information that is helpful to anyone that listens!
Great podcast!
Great podcast!
@Owchy
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Love all the information and insights from Taylor and his guest. Fun and entertaining. Highly recommend.
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