Regardless of where you prefer to work, investing in real estate can be accomplished virtually anywhere. You can do it in the basement of your house, in an office or sipping a coffee at the beach. However, while you may enjoy this freedom, the same can’t be said about those you work with. In other words, you don’t want to work with just anyone. Establishing a real estate team is something that requires an acute attention to detail. While most investors don’t consider investing a team sport, the people around you will play a large part in your success. These people can include a working partner, realtor, contractor, mortgage broker and attorney. If you want your business to excel, you need to find the right person and/or team to work with.
The most important people to your team will be those that compliment your skill set – that is to say, those that fill in the gaps. There are many investors that enter the business after successful stints in other careers. Regardless what that career was, it is important that you carry any skills you may have learned into your investing business. It is also important to recognize what you don’t know and in what areas you may need more education or experience. You shouldn’t want potential team members to agree with everything you have to say and how you approach the business. If you are thinking of taking on a partner that has the same ideas and personality, you will have nobody to bounce ideas off of that can give you a differing opinion. In many cases, someone completely opposite can make the best partner.
A common mistake that many new investors make is spending more time looking for deals instead of people that can help them find them. The first potential team member that new investors may want to consider is a potential working partner. If you are handy and don’t have the same access to capital as a potential partner, a relationship of this nature is something worth looking into. If you are good with people, technology and negotiation and your partner has established contacts in the business, this is a union that can work. The most important quality is that you share the same goals and visions of the business. How you get there could be two completely paths, but you have to end up at the same spot. A mentoring partner on your first few deals should help, but you need to make sure you are both on the same page.
The same can be said about choosing which realtor you want to work with. There are many great realtors who may not be the best fit for investors, especially new ones. It is tempting to look at a particular real estate office and see who was the most productive realtor and start with them. They may be great at what they do, but this could mean they won’t give you the attention you require. Regardless of which realtor you work with, you will be asked to do your share of the leg work for every property you consider buying. Your realtor still needs to make themselves available to show you houses that you have done your homework on or guide you through the process. If you feel your realtor is too big or too busy, you may be better off working with someone new to the business that is hungry like you to close deals.
If you are looking to rehab, you will need a reliable contractor. You can spend weeks and months talking to various contractors and hear the same thing from every one. The perfect contractor will have a mix of experience, competitive pricing and trustworthiness. Unfortunately, these people are the exception rather than the rule. One of the byproducts of the housing crisis of the last five years is that many good contractors and laborers are underemployed and looking for work. Feel free to ask for references or examples of work they have done. It can be tempting to choose the least expensive option in an effort to maximize your bottom line. What you will find with your rehabs is that often times you are judged by the quality of the work. It makes sense to pay for quality to get a greater return when you sell. The bottom line is that you need to be comfortable with anyone that does work on your properties. If you don’t feel this way, take your time until you find the best fit for you and your business.
Aside from your realtor, contractor and partner, you will also lean heavily on your attorney, accountant and mortgage broker. Regardless of what role they play, it is important that you are comfortable with them, they know your goals and can get the job done. Every deal you do should be a learning experience and something that you can take to your next deal. If you surround yourself with the best possible people, instead of those that agree with everything you say, you will learn the business a whole lot faster and be far more successful. There may be some heated conversations along the way, but if you can accept the fact that there may be a better way to do things, you will accelerate your growth in the business.
The better your team is, the better investor you will be. Each member can provide insight and alternatives on how to do every step of the business. If you take the time to seek out the best possible people for you and your goals, you will enjoy the business that much more and be far more successful.