If you’re a Real Estate investor in Georgia, you’re faced with a lot of moving pieces. Do you have partners? Lenders? Multiple properties? Vacancies? Contractors? Depending on your risk preferences, working capital, and experience level, you probably have a lot of plates spinning at the same time. As we prepare to move into the new year, take a few minutes to assess what “administrative” loose-ends you can tie up, and who you need to get on your team in order to meet your goals for next year.
- Leases: If you have multiple tenants, make sure all leases are currently unexpired. If you’re in a “month-to-month” situation after the expiration of the lease, plan to have good tenants sign/renew their lease, while preparing to replace non-performing tenants.
- Entities: If you haven’t placed your property into an LLC or other corporate structure, make a couple of phone calls to your accountant and an attorney (or two) to see if you should. In general, placing a property into a corporate structure allows for cleaner accounting, as well as some liability protection. If your entity is holding too many units, consider forming a separate company and transferring a portion of the properties into that new entity (don’t forget to update your leases).
- Partners: If you have investment partners (but are not set up as a corporate entity of any kind), spend 10 minutes putting together a year-end summary of income, expenses, and how those will be allocated for tax purposes. Once you’ve done that, please contact an accountant and attorney about setting up an entity to hold the property.
- Be especially careful with partners. They may be friends, they may be family, but relationships can get strained when money is involved. Always remember that “good fences make good neighbors,” and make sure that you have everything in writing. Partnership agreements, letters of intent, joint venture agreements, etc…; They all sound very intimidating and expensive, but you’d be surprised at how accessible/affordable these documents can be, and they’re worth every penny. Even if you don’t hire an attorney to write everything up, at least put your agreements down on paper so that no one can later claim that “that wasn’t what we agreed.”
- Liquidating: If you’re selling properties, consider whether you wish to sell the property or the holding company itself (including that company’s assets).
- Your team: Though you’re used to being a “Jack of all trades,” as you progress with your real estate investment, you’re going to need a team. You don’t need to get too elaborate, either.
- Find an accountant you can trust.
- Find an attorney who won’t nickel-and-dime you.
- Find a good handyman.
- Introduce them all to each other. Let everyone help. Not only will you be better protected and more efficient in your investments, but as your network grows, so will your leads and opportunities.
As always, if you have any questions about setting up your real estate investments, feel free to contact us. Let us know if we can be of any assistance! If you would like assistance evaluating specific documents before deciding what changes might be needed, consider booking a paid one-on-one consultation session with one of our attorneys.