Building a Team to Streamline Your Investing
It is important to remember that becoming a successful real estate investor requires you to build a business. You need to have a solid team in place in order to do this with minimal headaches.
There are lots of systems and structures that you can use, but without a successful team, it will be very difficult to scale your business or whether any storms.
The Big Four
These are the four most important people to have on your team. If you have solid people in these four positions, your business will run smoothly. The additional (bonus) team members can be found via referrals when needed to solve a specific problem.
These team members become increasingly important if you are investing out of city, or state. I have an amazing property manager (no, I’m not giving you her contact info :p) and solid realtor. These two members of my team work very well together and have been able to take the reigns when I’m out of pocket and handle all sorts of issues.
David Greene calls these members the “core 4” of your team in this article.
The Deal Finder
The realtor is what most people think of as a deal-finder, but don’t overlook the ability of a solid wholesaler to bring you discount deals! I think the more deal-finders you can have access to the better your business will be. Nobody ever failed as a real estate investor because they had too many deals to sort through!
Finding a solid realtor can help the rest of your team fall into place too! Realtors generally have some great referrals for lenders, insurance agents, and even property managers! It isn’t too hard to browse google and find lists of the top agents for the last year, and this year. Often these agents will have a team and are well equipped to help you along the journey of real estate investing.
The realtor is important because they will be writing the purchase/sale contract(s) for your investments. For this reason, you need to find an agent that understands how to work with investors. For example, my agent knows that I send a lot of offers, and often much lower than the asking price. That is why she calls the listing agent and delivers a “verbal offer” to test the waters, before drafting the official contract. This works in some smaller towns in the mid-west, but in hot markets, you probably need to write the official offer up front.
Finding an agent that is willing to write a lot of offers, and sometimes embarrassingly low offers are not always easy. It will work out though because a solid investor-friendly agent will know that low offers are worth it when you’re buying houses more often than the average person.
Finding local wholesalers can lead to rapid improvements in your deal-finding! There are three easy ways to get on the buyers’ list of a solid wholesaler.
The first is to show up to local real estate investor meet-ups/networking events and ask around! This is probably my favorite method because it results in relationships and more connections than you would get with the other two methods.
The second method is to search google for “we buy houses” “we buy houses cash” “we buy houses (city name) or “we buy houses any condition.” These are often domain names or catch-phrases used by wholesalers, and on their website, there will be a way to email them. I send a short introduction and brief description of what sort of properties I’m looking for, and generally, end up on their email list whenever a new deal pops up!
The third method, which is much more passive than the first (but still effective) is to respond to any letter you receive about buying your house. This letter came from an investor or wholesaler, and if you call them back and talk for 5-10 minutes you can generally end up on their buyers-list this way as well!
A bird dog is somebody that see’s a dilapidated property and gives you a call. I leave “REWARD $1000” business cards when I tip, and at various locations. The back of this card lets them know that I’ll pay them $1000 for any property they bring to my attention that I buy. This isn’t a super official employee/contract deal, this is just a friend giving me a tip, and then I thank them with a generous tip! This is a simple, cost-effective way to potentially find new leads in your area!
The Property Manager
Finding a good property manager can make or break your experience with real estate investing!
I was lucky enough to stumble upon a blog discussing the importance of hiring the right property manager. As a result, I pooled together questions from 4-5 websites to interview potential property managers. That was one of the best decisions I made in my first year of investing. I was able to avoid hiring the property manager I was planning to use and found one that is much better (and charges 30% less!).
Having a solid property manager allows you to step back from the business and focus on acquisitions, or life!
I never give out my property managers information!
Hiring the right contractor is difficult because good contractors are expensive and busy. If you find a solid, affordable, contractor the odds are that as he gets busier his rates will get more expensive. For this reason, I have heard it recommended not to give out your contractors information to many people.
I once heard this awesome trick to finding a good contractor. Wake up early and drive by Home Depot and/or Lowe’s before they open. Look to see what contractor trucks are already in the parking lot. This shows two important things to me: The contractor is going to arrive at your project early (being productive), and the contractor is good enough to know what materials need to be bought for the day (without going to the property first).
I love this trick! Outside of that, I think referrals are the best way to find a solid contractor! If you invest locally to get to know various contractors…heck, one of my high school friends is an awesome contractor now!
I listed this at the bottom because it is becoming increasingly possible to purchase real estate without a lender involved.
That being said, I have a team member that I call for commercial loans and two brokers that I will call regarding residential loans. We are building a network of solid VA-lenders so that we can recommend quality lenders in states that house large military bases!
I have found the two best ways to find a solid lender are through referrals and the ICBA App. Both of my residential brokers were referrals from my property manager and realtor. ICBA is an app that allows you to search for local community banks by zip-code. I used this app to find my commercial lender, and was able to purchase an apartment with only 5.1% down through his bank!
Having a lender on your team enables you to have rapid access to pre-approval letters. A good lender will also give you valuable feedback in regards to making yourself more competitive for loans!
A lender is one of the best ways to save yourself money in down-payments and interest rates!
Bonus Team Members!
Be sure to add these people to your team as your business grows!
I have switched insurance companies once or twice in the last few years. Honestly, the best way that I have found to find a good insurance agent is through either referral or calling around to request quotes. Having an insurance policy is a must to protect yourself in case of a lawsuit.
Having a solid lawyer on your team is critical for drafting contracts, forming corporations, and/or dealing with the unfortunate lawsuit. I’m fortunate enough that my property manager has an amazing lawyer who can handle most of this for me!
I have used a few inspectors throughout my due-diligence periods. Most of these inspectors were referred to me by my realtor. Through trial and error, I found one inspector that I want to keep using! I plan to use this gentleman for all of my future inspections, just because he was willing to teach me things as I walked the property with him, invaluable!
I don’t necessarily have an appraiser on my team yet, but I would like to build that relationship. Can’t hurt the valuation to be on good terms with all of the local appraisers right?
In order to scale your real estate investing business, you must have a solid team. Your team can make anything possible! Without a solid team, you will spend unnecessary amounts of time trying to learn/do everything yourself.
I am able to call, email, or text, members of my team to ask for advice, or give my $.02 with minimal impacts to my time or stress!
Be sure to do your due diligence when bringing people into your team, and ensure they can work together too! Remember, not everyone you bring into the team will work out, and that is okay. Having to discontinue the occasional relationship is absolutely better than trying to do everything yourself.