How To Make Sure My Real Estate Investing Business Is Legal


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Make sure that your real estate investing business is legal by following the tips in the video. Stay out of legal trouble and develop a compliant property investment business.

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How To Make Sure My Real Estate Investing Business Is Legal

Joe: Hey, it’s Joe Crump. This video is about how to make sure your real estate investing Business is legal. That’s a big fear for a lot of people. And it should be. You want to make sure you’re not breaking the law. The very first thing to think about, I guess the very first thing is, I’m not an attorney. I don’t even play one on TV. I can’t give legal advice. I’m just going to tell you what I think is real and how I run my business and what’s worked for me and my students over the years.

Joe: The very most important thing in business, if you want to stay out of trouble, and it doesn’t guarantee that you stay out of trouble, but it really helps a lot, and it’s that you have an ethical, honorable business. That you treat people with respect. You treat people with honesty and you try to solve their problems. That you try to have their best interest at heart. That you treat each of the people, buyers, sellers, investors – everybody – employees – everybody you work with. Tenants. Everybody you work with, you treat them as though they were your family member. Someone that you loved.

Joe: And if you build your business around love, and I know this sounds a little Pollyanna, but if you build your business around love, good things will come back to you and you’ll stay out of trouble. Because it’s such a pain in the neck to get into a lawsuit. My feeling is anytime you feel yourself getting angry about a situation, or angry with a particular person and you’re going to lash out and you’re going to do something that hurts them, remember that every time you get angry you need to reach into your back pocket and starting pulling out cash because it’s going to cost you money in order to cover those costs of that fallout. So, you want to try to act honorably in this process.

Joe: The next thing to look at is your contracts. Make sure you understand your contracts. Get contracts that make sense. We’ve spent so many years developing our contracts and you can get them through the Automarketer, you can get them through my mentor program. Those are contracts that we’ve spent hundreds of thousands of dollars in legal fees over the years making sure that they’re right. We’ve used them in places all over the country. So, have good contracts. If you don’t get my program, then go spend some money on an attorney and get good purchase agreements, get good assignment forms, get good disclosure forms, get good deeds and land contracts and all the things that you need. And you can pay for them as you need them. You don’t need to go out and buy them all right away if you’re not going to just get them from me and my programs. If you’re going to go to an attorney, just get what you need. And they’ll tell you what you need. But make sure you have the right disclosures and the right documents and the right purchase agreements and the right assignment forms and make sure you’re able to control the properties in the way that you need to in order to do those deals.

Joe: And you’re going to use different types of contracts for different deals. A subject to contract is different from a land contract, or a contract for deed, if you’re in a different state. Or, multi-mortgage is different. Or if you’re doing an assignment form or if you’re doing a disclosure for a subject to, that’s different from a disclosure for the lease option process. You’re also going to need the forms to make sure you have control of the mortgage and the insurance companies so that you have control of the properties that you’ve got.

Joe: You want to make sure that you understand how to get your properties properly recorded. Working with the title company can usually help you make sure that you’ve got legal title to that property. And you can have a title company go pull that information for you if you don’t know how to do it yourself. You can go to the County Recorded and get that information yourself, or you can have the title company do it. It’s usually $150 or so and they can pull title on a property. If you’re planning on keeping that property for the long term then you want to get title and make sure there’s no other liens or problems with that property.

Joe: So, make sure that you have the right advice as you go through this process, the right help to do it. It doesn’t necessarily have to be an attorney. It can be a title company. It can be a mentor like me. It can be another real estate investor who’s been through it before. It can be somebody who’s just, you know, it could be somebody who understands how to read contracts and knows what to look for in a transaction. Those are things that you need to learn in order to do all this stuff legally and not get yourself in trouble financially or screw up your credit, or screw up anything else, get yourself into a lawsuit.

Joe: Again, if you follow my very first rule of taking care of people and treating them right, if you do make a mistake with the contracts, if you do make a mistake with how things are set up, you can usually go back to them and say, what I meant was this. I’m really sorry. I screwed up this contract. Can you make this modification for me?

Joe: I just closed a deal yesterday and we had to get an amendment on that property because we forgot something that we needed to add to that transaction. It didn’t make it legal or illegal, it just was not attractive to us not to have it. And the seller could have said no, we’re not going to do that, and I would have been stuck with that property with that little problem on there. But, he said, no, it’s no problem, I’ll sign it, that’s exactly what I had in mind. So, we did it and we signed it and we closed the deal. And there was no problem with it.

Joe: You can keep good relationships with the people that you’re working with. If you’re working on a property that’s subject to, you’re going to be sort of married to that person for many years down the line. You’re not going to be talking to them, they’re not going to be calling you, you’re not going to be calling them. None of that is going to happen until it’s time for you to finally sell that property. And even then it’s probably no absolutely necessary that you contact them, but we always like to contact them at the end and say, hey, we’re paying off your mortgage. We’ve had it for ten years now and we’re paying it off now. You’ll notice that we’ve paid it on time the entire time you had it and they’ll say to us, oh, thank you, I’m so glad it’s finally paid off. Thank you for paying it on time. You actually helped my credit. My credit score went up because you guys made your payments and that was great.

Joe: So, those things make a difference and they make a difference in your business. So, build those relationships because that will help you stay legal in this process. Make sure you use the right contracts. Because that’ll help you stay legal in this process. Pay attention to what’s going on in your particular town, if there’s legislation that’s there that’s not in other places. I’ve pretty much seen what goes on in almost every town and every state in this country, so I have a pretty good idea of where the problems are with some of the things that we do that have to be addressed. Nothing that’s out there, no legislation out there has prohibited us from doing deals.

Joe: We’ve always been able to do deals and we’ve always been able to find a way to comply with legislation that happens, that comes about every once in a while, typically because of other investors who are working in bad faith and legislators come in and say, hey, we need to protect this particular class of buyers because they’re dealing with investors who are taking advantage of them. Which, if we didn’t do that as a group, if we treated everybody well as a group, that kind of legislation wouldn’t be necessary and we wouldn’t have those kinds of problems.

Joe: So, treat everyone with respect and with honor and with honesty and you’ll say out of 99% of the problems.

Joe: But that brings us to the 1%, because every once in a while you’re going to get sued. Somebody’s going to get upset with you for some reason and you’re not going to be able to calm them down and you’re not going to be able to get them to back off. Or, they’re doing something that’s reprehensible. Maybe they’re trying to steal from you. And you have to go back and you have to fight them to avoid that. I don’t ever want to get into a fight. But I’m not afraid of a fight, either. I’m willing to go into a fight because I know that the way I treat people and how my documents are set up, I’m in the right most of the time.

Joe: And if I screw it up, then I’ll take the consequence and I don’t have to get in a fight. I’ll solve the problem because occasionally I’ve screwed something up and it’s cost me money and I made that payment and moved on in my life. But, if I get into a lawsuit because it’s something I feel I have to protect, that I feel that I’m in the right, and you know, my documents say that I’m in the right, then I’ll go in, I’ll have that fight, and usually I’ll win. Not because I’m representing myself, because I hire an attorney to represent me in that transaction. And that can be expensive. So, that’s another reason to protect yourself with having some reserve money in the bank while you’re doing these deals. So, you may not be able to do that at the beginning of your career because you’ll be stretched a little bit to make that happen.

Joe: But as you start to build your portfolio, as quickly as you can, build a reserve so that you can get yourself through hard times, get yourself through vacancies, get yourself through unexpected expenses, and that way you’ll be able to have a long term, sustainable business.

Joe: My big crash happened in 1991 when I didn’t do those things, when I didn’t have reserves, when I was heavily leveraged and using banks. After that happened, when I was no longer able to use a bank, when I was no longer able to have cash to invest, I had to learn how to do it with zero down. And that’s how I built my business from there on out. And I built my business in a way that I could structure it so that they can’t take my money away from me again. They can’t take my assets away from me again, at least they can’t wipe me out.

Joe: The stuff that I do was safer and easier and more likely to succeed.

Joe: All right. I hope that helps. Subscribe to the channel. Go to and sign up for the free newsletter. Go to That’s where we do all the automation. That’s where we get our leads. That’s how we structure our business and automate and systematize our business using that software. Ninety percent of our business is done with that software. The other ten percent, nine percent of it is done by outsourced workers, and one percent of it is done by me. And then also go to That’s my mentor program, six month mentor program. It’s expensive. It’s like going to college for a semester, so not cheap. But I think it’ll pay off for you in the long run to have my personal help walking you through this process and helping you with your deals and helping you get moving forward.

Joe: All right – Good Luck to you.

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