Building Your Real Estate Investment Team
Whether you like it or not, real estate investing takes a team. It is not a one-person sport. It doesn’t matter if you are doing one deal or 20 deals, you must build a team to be successful. Finding, purchasing, and managing an investment property takes many different professionals. These individuals are all part of your investment team. Finding great people to work with will make your life easier.
When you invest in real estate, there are many questions you have to answer. Questions such as: where will I find opportunities? How will I get them financed? Do I need to have this in the contract?
The good news is that you don’t have to have all the answers. You just have to know where to go to find the answers. A quality team will help you answer those questions. They will also help you answer the questions you didn’t even know to ask. They can help you be more successful and avoid mistakes.
There are 6 key teams you need to have to be a successful real estate investor. They are:
Property Acquisition: The first group of professionals you need to have is an acquisition team. These are the people who help you locate and identify potential opportunities. Without opportunities flowing your way, you cannot make it as a real estate investor. This group will consist of brokers, banks, deal scouts, inspectors, appraisers, and marketers who will help you find quality opportunities. They will also help you get maximum value when you decide to sell.
Legal: The next team you’re going to need is legal. Quality legal work is extremely important when purchasing and owning real estate. Attorneys can help protect you as you buy, own, and sell real estate. They can handle contracts, set up the appropriate legal structure, and make sure you have legal leases. They are essential for avoiding costly mistakes. The attorneys you use in a transaction can consist of real estate, transaction or contract attorneys, and securities and exchange attorneys if you are going to be raising money from outside investors. We always recommend the use of a qualified real estate attorney for your transactions.
Equity – Equity is the money needed to buy a property. If you are financing a portion of your purchase, equity is the amount you need outside of the financing. This can come from an individual or from a group of investors. If you use a group, you need to make sure you follow rules for pooling investors. You can check with your local, state, and federal authorities to find out the specifics in your area. A qualified securities and exchange attorney can also be very helpful.
Financing – If you do not plan on paying all cash for your next investment, you will need to have others to help you get financing. This team consists of lending institutions, private individuals, and mortgage brokers. These are individuals or institutions that will provide a significant portion of the money needed to purchase your next investment property.
Property Management – Once you have purchased an investment property, one of the most critical teams is your property management group. This team will operate your property on a daily basis. They will take care of repairs and maintenance. They will also collect rent and lease your property. In our experience, this is the team that can make or break your investment. If you plan on using a third party property management company instead of managing the property yourself, make sure you pick a company that is experienced in the area, type, and size of your property.
Accounting – Here is where a lot of investors tend to skimp, but that is a big mistake. Having accurate and up to date accounting is essential to operating your real estate investment business. Even if you hire outside management, you need to know what is happening financially on your property. Having good accounting will help you determine if you are making money, when to sell, and where the problems lie. An investment property with poor records is an investment property with problems. Be very wary of buying properties where they cannot provide accurate and up to date financials.
Having a quality team is essential to your real estate investing success. Knowing where to go when questions arise will make your life easier and help you make more money. They will also help you avoid costly mistakes. So, get out there and build your team.
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