Author: Jeffery S. Watson

The Reason We Invest By: Jeffery S. Watson One of the questions I ask real estate investors when I’m doing consultations or taking them on as new clients is, “What is your goal?”  I’m not looking to discuss particular types of transactions, but rather what they are looking to accomplish with their investments from an economic standpoint.  Obviously, the answers vary due to each individual’s specific situation, but they should have some consistent themes as to why investing is being done: For the purpose of generating consistent, recurring cash flow. For the purpose of gaining wealth through appreciation of assets…

The Importance of Cash Reserves By Jeffrey S. Watson Recently, I spoke to a group of real estate investors about buying properties using a creative financing method. Some of the questions asked reminded me how crucial it is that real estate investors have cash reserves to deal with the unexpected. I consider cash reserves to be “Murphy’s Law repellant” (anything that can go wrong will go wrong). Those who have cash reserves won’t be nearly as stressed as those who have no cash reserves. I will admit that I have found myself, at times, in both situations. I had a devastating casualty event…

Is It Unconstitutional or Not? By Jeffrey S. Watson A little over a week ago (in early March, 2024), small businesses across the United States were rejoicing upon hearing the news that a federal judge in the Northern District of Alabama, in a case brought by the National Small Business Association and Isaac Winkles, a member of the NSBA, had ruled that the Corporate Transparency Act (CTA), which became effective January 1, 2024, was unconstitutional. A few days later, the judge clarified his decision saying that his decision only applied to the parties in the case before him. If you were a…

The Corporate Transparency Act (CTA) is Here By Jeffrey S. Watson The Corporate Transparency Act (CTA) is here and now in full force and effect. In 2021, Congress passed this legislation that was signed into law by President Biden but did become official and enforceable until January 1, 2024. This is the most broad, overreaching, and invasive federal reporting statute in the history of our government that squarely and directly impacts every small business owner, entrepreneur and real estate investor you know. If you are a real estate investor, agent, broker, operator, or anyone else who owns a business, here…

Reserves are Important By Jeffrey S. Watson None of us knows what life will bring. All of a sudden, your ability to generate income may be severely restricted by an illness or injury. In the past few months, my office has worked with several individuals in the real estate investing arena who found themselves in that situation. One of them, because of a back injury, was unable to work for four months. Another was incapacitated for well over a month from being involved in a nearly-fatal car crash. Fortunately, these individuals had an “emergency fund” from which they could draw…

Getting It Into Evidence By Jeffrey S. Watson Most of you know that I’m a practicing attorney in Ohio with a history of trial work and litigation. One of the things a trial lawyer thinks about is how to get information admitted into evidence. I want to share with you the best way to get text messages between you and another party admitted into evidence. There is a right way and a wrong way to do it. Don’t expect to show up in court, at an eviction hearing for example, and think you will just be able to read text messages between you and…

Evictions and Trusts By Jeffrey S. Watson Not long ago, I did a short series on trusts being used by real estate investors. A memo came across my desk recently from a highly-respected eviction attorney in Cleveland, Ohio. The Cleveland Municipal Housing Court is now doing something that will probably spread to other states and cities. They are now requiring additional documentation when the owner of the property is a trust and the trustee is doing the eviction. Let me remind you of a couple of things. The trustee holds title to the property pursuant to the terms of a Trust…

Trusting Your Trustee By Jeffrey S. Watson Many real estate investors consistently use what I call a “grantor revocable title holding trust”, which is a more accurate term than “land trust”, to take and hold title to a piece of real estate they buy for investment purposes. Such trusts can be used whether the property is being held as a long-term rental or being bought as a buy, fix and resell or being resold as a quick flip. The most important component of such an arrangement is the capacity and integrity of your trustee. They not only must be a person of impeccable…

Here Is an Ounce of Prevention By Jeffrey S. Watson The second half of 2021 real estate taxes will be due and owing either this week or the next for many of you. I want to share something I have noticed recently. I have had three similar cases come across my desk in the last five weeks, which means it’s something that deserves attention. Investors who own properties that are free and clear are sometimes not receiving their tax bills from the county because they are being sent to the wrong address. Two of those three recent cases are tax lien foreclosures filed in…

The Investor Friendly Title Company By Jeffrey S. Watson In my practice of helping real estate investors, particularly self-directed IRA investors, hardly a week goes by that I don’t hear or read the phrase “investor-friendly title company.”  When I do, my head often cocks to one side, like a dog who hears or sees something he just doesn’t quite understand. Here are several thoughts I have for those who use that phrase. Are you seeking an “investor-friendly title company” because you are attempting to do something outside the norms of commerce? The answer is probably not.  Very little that an…