As the 17th-century poet, John Donne, once wrote: “No man (or woman) is an island.” And though Donne wasn’t specifically referring to real estate investing — at least we don’t think he was — there’s no question a residential redeveloper is only as strong as the professional real estate network they lean on.
The big question is this: “how” do you develop a real estate networking platform? Especially when starting from scratch? What key people do you need when creating a social network for real estate? And how can this real estate network actually help your business?
Here are 10 key people to add to your professional real estate network to ensure you’re primed — and connected — to maximize your talents as a real estate investor .
Building A Professional Real Estate Network
Getting a mortgage loan can be a tedious and time-consuming experience (even under the best of circumstances). And spending time shopping around for the best loan is not only time better spent on other income-generating activities, but can slow down a deal-making process that depends on speed and efficiency.
All things considered, adding a capable mortgage broker to your real estate network is vital. They can help you shop around for best financing available, and with their own network of mortgage loan professionals can unearth loan deals you might never have discovered on your own.
2. Real Estate Attorney
Think every real estate deal is the same? Think again. Each one carries with it its own unique mix of state and local regulations — many first-time real estate investors have no idea about — which can not only slow down the process of finalizing your deal, but cost you a whole lot of money on the back end.
The key is to find a reputable real estate attorney well-versed in the legal customs of your local area. No out-of-town attorneys; you need somebody with “boots on the ground” in your area. And be sure they know the ins and outs of the type of real estate deal you’re trying to complete — such as rehab, wholesale, or buy-and-hold.
3. Real Estate Agent
Many first-time real estate investors are hesitant to work with a quality real estate agent (perhaps they fear the agent will snatch their deal from them). But having a stellar agent, who knows their market inside and out, in your professional real estate network can uncover hidden investing opportunities that would take you precious time, energy and money to discover.
The key is to find a seller’s agent you can work with, and who will be willing to point you toward potential leads in the future. As an investor, and cash buyer, you bring a certain amount of “deal speed” that makes you very attractive to sellers.
If rehabbing is a part of your overall investing mix, developing a long-term relationship with a contractor is vital. Not only does it save you time from having to sift through bids from various contractors, but working with the same contractor, deal-after-deal, can let you ask for serious discounts when it comes to material costs (not to mention they can also tip you off to possible homeowners looking to sell).
The key is to have clear, organized repair templates. Having a contractor head to Home Depot 10 times during a job is a quick way to burn through profits and destroy a profitable partnership.
As management consultant Peter Drucker once said, “what gets measured, gets managed.” And without a clear idea of how your business is actually doing — at the dollars-and-cents level — it’s difficult to know what’s working, what’s not working, and how to navigate your path toward future investing success.
Luckily, with an accountant or bookkeeper — who is an expert in the type of real estate investing you do — and understands the numerous tax codes that apply to your business, you’ll not only have a clear picture of the health of your business, but you’ll find new ways to reduce your tax liability and build your savings.
This is one role many real estate investors like to take on themselves. And while it’s important, as a residential redeveloper, you have an “eye” for opportunity when you see it, adding an appraiser to your real estate network can help you in a myriad of ways.
They can give you a precise valuation on potential properties you’re thinking of adding to your portfolio. (Either as a rehab or rental property.) And they can also offer suggestions on how you can best boost the value of a potential property without cutting into your eventual profits. (Open floor plan, master bath, kitchen remodel, etc.)
Having a property inspector in your professional network serves two key functions. One, they fulfill the requirement that you must have your property inspected before you sell it. If you have to work with an inspector, why not work with somebody you have rapport with?
Secondly, an inspector can help you before you’ve purchased the property, to avoid major problem areas, or potential future catastrophes. (Which can cut into profits, big-time.) One tip is to find inspectors who were once contractors; they tend to know where the red flags are.
8. Private Lender
Not all of your deals will be funded with traditional lenders. Sometimes traditional lenders move with the speed of an aircraft carrier, and as a real estate investor you need financing that has a bit more urgency tied to it.
And for that it’s good to have a private lender in your professional real estate network. With private lenders, the approval process is much faster, so you’re usually able to secure your financing much quicker than through a traditional lender.
Check out local networking events to find private lenders who you can add to your Rolodex. You may need to have a couple deals under your belt first, as private lenders like to see a track record before providing financing to a newbie investor.
9. Title/Escrow Agent
If there’s one person in your social network for real estate that can save you money it’s a title/escrow agent. That’s because an escrow agent can detect problems, far beyond the usual cracked foundation and water damage, an existing property may have.
An escrow agent can find out if a property has tax lien, or if there’s another of debt service attached to the property — things that can literally suck all the profit of a property. In addition, a good escrow agent, with their extensive network, can help you find financing and even point you in the direction of potential deals.
10. Insurance Agent
For many investors property insurance is just the price of doing business. But for the savvy real estate investor, adding a good insurance agent to their professional real estate network is a great way to unearth hidden opportunities to lower operating expenses and boost profits.
That’s because a good insurance agent can help you look for ways to be coverage compliant, at the same time looking for options to reduce premiums. The key is to bring all your insurance business “under one house.” By having one insurance agent handle all your property insurance activities, you can take advantage of competitive discounts and reduced premiums.
Leveraging The Perfect Team
Creating the perfect social network for real estate isn’t about duplicating yourself and finding people (just like you) that do exactly what you want; it’s about realizing that you can’t (nor should) handle every aspect of your real estate investing career. Just like the captain of a ship doesn’t tie every knot, you also should not be responsible for every element of the real estate investing process.
And by trusting the talents and expertise of your professional real estate network, you’ll not only find your stress levels decrease — and your efficiency skyrockets — but you’ll have more time, energy and money for that most important task of your real estate investing vocation: ensuring you get a healthy return on your investment.