Are you on the brink of making a move on a corporate real estate venture? If so, it’s highly likely that you’ve encountered a myriad of questions and your research has quickly tripled or quadrupled in size. We’ve prepared some information that should help.
Contacting a Corporate Real Estate Attorney
One of the first issues you may face is deciding when to contact a corporate real estate attorney. Trey Chancellor of the Caiaccio Law Firm suggests to “bring us in when you’re comfortable you may have a deal so you can have us draft an early access agreement”. Named partner Kevin Caiaccio cautions about dead deal costs, “you don’t want to get into a deal, run up a legal bill and then it doesn’t pencil out the way you expect it and have to terminate.”
There’s no question about it, legal issues related to acquiring and disposing of properties, entity structuring, and tax strategies tied to real estate syndication can be quite complex.
Entity Structuring
Although there are some common characteristics such as dealing with LLCs; when it comes to entity structures “it’s certainly not one size fits all” explains Mr. Caiaccio. “Every structure has some nuances and unique qualities.” As a limited partner in a deal, Mr. Chancellor advises following the simple but extremely important step of “knowing who the syndicator or general partner (GP) is.”
Avoiding Legal Issues
From a legal expert’s perspective, “we approach when we are buying as if we could sell the property,” says Trey Chancellor. With this strategy in mind, plan ahead to mitigate any legal issues that may arise when it comes time to sell. Verify that titles, zoning, surveys, etc. are all clearly defined, accurate, and up to date.
Planning Tax Strategies
Mr. Caiaccio and Mr. Chancellor both agree “there are a lot of attorneys out there who draft these operating agreements who do not fully understand the tax allocations.” They both advocate having a CPA in the “org chart from the outset.” Have your CPA make suggestions on how to word certain allocations as opposed to doing so when the first tax season rolls around after the deal is complete.
For more information on this topic, check out the latest podcast from The Real Estate CPA with guests Kevin Caiaccio and Trey Chancellor. In the market for a Real Estate Attorney? Visit Caiaccio Law Firm at https://clf-attorneys.com/.