April is a great time of year if you are a sports fan. Baseball season has started and playoffs are underway in both the NBA and NHL. However, I bet you didn’t know that a lot of comparisons cab be drawn between these sports and your real estate investment company. Real estate and sports have one very important thing in common: teamwork. The best investors understand the value of a real estate team. They know they are only as good as the people around them. Whether you are investing in San Diego or Seattle, your supporting cast is critical. If your team is strong, there is a good chance your business will reflect it. With that in mind, a real estate team should consist of several primary individuals – each as important as the next. Make sure your real estate team has the following people in place:
1. Real Estate Agent: Real estate agents are on of the first contacts individual investors make. There is a reason for that: A good real estate agent will help make the transition into the business as seamless as possible. Not only can a good realtor help you find deals, but they will get more of your offers accepted. The key to a successful realtor/investor relationship is to understand the roles each will assume. Realtors work on commission, and their time is precious. In asking to see every new house that comes on the market without making an offer, there is a good chance you are wasting their time. You need to do your homework before you see the interior of any property. Your realtor will go the extra mile for you if they know you are serious. Just be sure that you are valuing your realtor’s time. Their appreciation can go a long way in forming a lucrative relationship.
2. Lawyer: The closing process is filled with many bumps in the road. It is important to have an attorney that you can trust. Before you even make an offer, you should lean on your attorney for advice. Contract structure, title search requests and closing issues are just some of the areas your attorney will come in handy. They will help close deals and protect you along the way. It is important to work with an attorney that you feel comfortable with. You need to be able to get a quick response if you have a question. Treat your attorney’s time with respect and they will remember it. Are you seeing a trend yet?
3. Accountant: For one reason or another, many new investors fail to realize that they are running a business. All businesses rely on numbers and need some form of accounting to survive. Regardless if you are closing one deal a month, a good accountant can help protect your money. There are many tax benefits that can be used by investors that an accountant will help you with. In addition to every day dealings, an accountant is a must at tax time. Real estate filings can be tricky if you do not know what you are doing. All the success you had during the year can be wiped out with one inaccurate tax return.
4. Property Manager: You may not be able to manage every property you own. However, a good property manager can save the day. You need to be able to trust that your property manager is reliable and dependable. Essentially, you must put a good amount of blind faith in your property manager, but it is worth it – if you hire well. Having to look over their shoulders and check everything they do defeats the purpose. You want to be able to let your property manager do their thing without much supervision. Property managers will eat away at monthly cash flow, but they can also help grow your business. Having the time to find new deals is worth whatever you are paying every month.
5. Contractor/Handyman: Regardless of what type of investing you do, you will need a good contractor. If you are a buy and hold investor, there are always problems that come up with rental properties. If you wait to get them fixed, you run the risk of irritating and perhaps losing tenants. Rehab investors know the importance of a good contractor. They have a direct impact on your budget and can turn a good deal into a great one. It is important to have these people lined up before you need them.
6. Wholesaler: The number of leads you generate directly reflects the amount of deals you close. One of the ways you can find new leads is through a local wholesale partner. The better your relationship is, the greater access to deals you will have. This relationship is built on knowing what each person wants out of the deal. A wholesaler needs to know that you will actually close when you say you will. Being ready to act when a deal comes your way is important. Take the time to sit down with a local wholesale contact and discuss what kinds of deals you are looking for.
Every member of your real estate team is important. Some will play larger roles in your success, but each person brings something valuable to the table. Instead of thinking about what you want from them, think about how you can make the relationship better. The more deals you close, the greater the bond will become. You may be able to close a few deals without a good team, but not for very long. Remember, the goal is to create a sustainable business. Spend more time focusing on your team than focusing on deals. If you do this, your business will be more successful.