I recently met two successful business partners in the real estate investment business. They were frustrated about a real estate transaction they have been involved in for a while. They proceeded to tell me how many hours they spent on doing the legal research that ultimately brought them to my conference table. They said they spend an estimated 300 hours of their time researching whether they had a case or not. That’s 300 hours! After reviewing their documents, the time it took for me to tell them that they did indeed have a legitimate legal concern and claim? 45 minutes.
Why is this so important? Let’s assume the 300 hours is pretty accurate. At the bare minimum they make $100,000 per year. With 2080 hours a year, that means a person makes about $50 hourly. 300 x 50 is $15000. One investor could have used their time more wisely and spent the equivalent of 10% of this money with an expert, who would not have only reviewed the matter, but given a professional legal opinion regarding ready and available courses of action.
Imagine what better deals these partners could have found using their 300 hour on research, due diligence, and networking.
One deal would more than adequately have paid for the cost of a legal opinion multiple times over.
My point: Bathroom surgery can be messy and expensive. The scenario above brings new meaning to the adage…”if you think dealing with a professional is expensive, just wait until you hire an amateur. “