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The Winning Edge: A Real Estate Investor’s Guide to Finding the Right Lawyer | Antonio DiMinno

Overview

Toronto real estate investing lawyer, Antonio DiMinno, of DiMinno Rizzi Lawyers, provides an insider’s guide to choosing a lawyer.

If you’re a real estate investor of any kind, finding a great lawyer is a tall order. Being a real estate investing lawyer involves in-depth knowledge of multiple areas of law, a strong understanding of the industry & investing strategies, business-savvy, and strong sales & negotiation skills, just to name a few.

At the end of the day, though, you don’t just want a lawyer – you want a trusted legal advisor who is going to be in your corner through good times and bad, every step of the way. So, let’s dive into what to look for to find one!

How to Find a Lawyer Requirement #1: Legal Expertise

Of course, the first factor to consider is the lawyer’s legal knowledge. A real estate investing lawyer needs to have an understanding of the following areas of law:

Real Estate Law

The primary area of focus is real estate law, which involves understanding contracts for buying and selling land, conducting thorough property due diligence to secure clear title, facilitating property transfers and registrations, arranging financing, and more.

Commercial Real Estate Law

This is a subspecialty of real estate law. Many lawyers practice residential real estate transactions, but do not touch commercial real estate or leasing (see below). This is because commercial real estate involves many more complex legal and business issues and there is often much more money at stake! Commercial real estate generally includes multifamily (residential buildings of seven or more units), industrial, retail, office, short term rental (e.g. hotels), and recreational real estate. 

Leasing Law

This is a subspecialty of real estate law that deals with commercial leases between a landlord and tenant. Commercial leases can be very complex, ranging from 20 pages for a convenience store to 200+ pages for a shopping center!

Land Development Law

This area of law deals with the planning, construction and use of real estate, including: combining or severing plots of land, rezoning land, obtaining permits, and various contracts between parties involved in developing real estate.

Business/Corporate Law 

You will want a lawyer who knows how to create legal entities and structure transactions to maximize your tax advantages and minimize your legal liability. You will also need a lawyer who understands commercial agreements, such as joint venture, co-ownership, and service agreements, to name a few.

Securities Law

This is one of the most specialized areas of law. Securities laws are in place to protect investors and govern how you can raise money for your real estate projects. Get this right, and you can have an endless supply of OPM (other people’s money) to scale and grow. Get this wrong, and you could end up in jail. Seriously.

Tax Law

Your tax related questions should generally be answered by a tax accountant. However, your lawyer should have broad understanding of taxes that apply to you, such as Land Transfer Tax (in Ontario), HST, Capital gains, and income taxes.

Landlord and Tenant Law

For your residential tenancies, you will likely hire a paralegal to evict tenants. However, your lawyer should have a good understanding of these laws for your residential properties.

Civil & Commercial Litigation

Your lawyer should have a solid understanding of the implications of all the parties’ actions, what you can do to protect yourself from being sued, and what your rights are to sue another party for breaching a contract or backing out of a deal.

 

How to Find a Lawyer Requirement #2: A Deep Understanding of Real Estate Investing and the Real Estate Industry

Seek a lawyer who walks the walk – one who is a real estate entrepreneur and investor himself.

For example, if you tell your lawyer that you want to do a BRRRR, and he gives you a confused look, find another lawyer! You want a lawyer who understands real estate investing strategies, like fix & flip, wholesaling, rent-to-own, BRRRR, seller financing, etc.

This can be a real challenge, because most lawyers aren’t entrepreneurs and don’t have an entrepreneurial mindset. Lawyers are often trained to be extremely risk-averse, and unfortunately, this mindset often persists in their professional lives. What’s even more concerning is that many lawyers view unfamiliarity as a sign of inadequacy rather than a chance for personal development. Consequently, when faced with something they don’t understand, they are quick to label it as “too risky” and discourage pursuing it, instead of acknowledging their lack of comprehension.

Another issue is that, even if the lawyer takes on your file, you’ll be spending double in legal fees just to get them to understand what you’re trying to do. Better to hit the ground running with an investor-savvy lawyer!

Finally, birds of a feather flock together. An investor-savvy lawyer will be able to connect you to a strong network of investor-savvy professionals, including  accountants, brokers, development consultants, tradespeople, and more. 

How to Find a Lawyer Requirement #3: Avoid a Deal-Killer

There is another reason why you want an entrepreneurial lawyer who does real estate investing himself: you will avoid a deal killer. As noted above, most lawyers have a knee-jerk aversion to creative solutions or anything outside the norm. They will avoid transactions that are slightly more risky from an investor standpoint. They will also kill deals by spooking their clients from moving forward, filling their minds with all the worst things that could possibly happen. 

Of course, advising a client of risk is a lawyer’s job. But, there is a fine line between managing risk and helping your client secure great business outcomes. Most lawyers err on the side of extreme caution and super financial conservatism. 

How to Find a Lawyer Requirement #4: Experience

While experience is valuable, it is often misunderstood. What truly matters is the lawyer’s percentage of time spent working with real estate investors like you, rather than their overall years of legal practice. For example, consider two lawyers you interview. One has 10 years of experience in divorce law and 2 years in real estate, while the other has dedicated 5 years exclusively to real estate and business law for investors. The first lawyer may boast about having almost double the years of experience, but the second lawyer is undoubtedly better equipped to serve you.

Therefore, it is crucial to ask the question: “How long have you been serving real estate investors as a lawyer?” This inquiry focuses on the specific expertise that directly aligns with your needs.

How to Find a Lawyer Requirement #5: Personality

It is not uncommon to hear stories of individuals who are dissatisfied with their lawyers.

You don’t want a lawyer who makes you feel dumb because they’re speaking what seems like another language! That’s why you want an advisor who is a good listener and who provides feedback in understandable layperson’s terms. You should feel comfortable with their personality in terms of their confidence in their skills, their objectivity, trustworthiness, integrity, and concern about you and your needs. If you don’t feel comfortable speaking to your lawyer, you’ll resist contacting them, possibly compromising your interests. 

How to Find a Lawyer Requirement #6: Accessibility

If you have a hard time getting in touch with your lawyer, you should reconsider the relationship. You should be the priority. If you are shunted to a junior lawyer against your wishes, your lawyer is likely culling clientele to focus on his most lucrative clients. This is very common in large and mid-sized law firms, especially in downtown metro canters. You will often get far better services and fees from a smaller law firm that focuses on clients like you. Bigger isn’t better, unless you’re a multinational company who needs 50 lawyers working on their matters. 

How to Find a Lawyer Requirement #7: Fees

There is another common complaint clients have of their lawyers: their fees. Lawyers typically bill by the hour from $300/hr to up to $1000/hr!  Too often, when you ask a lawyer what his fees will be, he won’t give you a straight answer – it “depends” on what he needs to do, blah, blah, blah…[enter long, vague answer here]

Worse still, many lawyers will give you an estimate to get you in the door, and then hit you with an invoice that is many times higher than that. I’ve seen this happen a lot in mid-large sized firms. In fact, many of our best clients have left larger firms to come to us for more value and transparency in their legal services. 

Here’s the thing: it’s true that some cases can take months to resolve, even if everyone thought they would only take a few days. That’s just how business works, and it’s impossible to predict every little thing that might happen.

This brings us back to the importance of having an entrepreneurial lawyer who invests like you. Your lawyer should be able to estimate the work needed and give you a range of costs if they charge by the hour. They should also offer a fixed fee option if you desire more predictability. Lawyers who only say “it depends” usually don’t get how business works and aren’t entrepreneurs themselves. As a real estate entrepreneur on a tight budget, you don’t want legal fees eating up all your profits.

Having said all this, the timeless saying remains true: you get what you pay for. The right lawyer provides specialized skills that can save you hundreds of thousands of dollars. When they understand real estate investing, they can save you even more than that. They will also prevent you from making costly mistakes that can cost you big or even end your real estate investing career permanently. So, avoid the “Do It Yourself” approach – it’s cheaper in the long run!

How a Real Estate Investing Lawyer Can Help

Business can be tough, but finding a trusted legal advisor shouldn’t be. If you’ve got questions related to real estate investing in Ontario, please don’t hesitate to reach out to us.

Your real estate investing lawyer will work closely with your team to protect your interests and be your trusted strategic advisor as you build your empire.

 

Antonio DiMinno

647-205-9128

antonio@drlawyers.ca

Contact us today for a free strategy session!

 

Disclaimer: All number figures are approximate only and may be subject to change. Like all material on this website, this is not financial, legal, or tax advice. Contact a professional for your specific situation. 

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