Summary: If you’re just starting out as a real estate investor, you may not know that you need to build a team. You also might not know that the better your team, the better your success as a real estate investor. So who do you need on your team? And how do you build a great team? Check out our article to find out!
[Disclaimer: We are not accountants, lawyers, or financial advisors, so please consult your own team of professionals about the topics covered in this article.]
If you want to be successful as a real estate investor, you will need a great team. The truth is that the stronger your team, the better your chances of success. So, who do you need on your team, and how do you grow those relationships to their full potential? Read on to find out!
Real Estate Investing is a Team Sport
Just like in sports, a great team has different players with complementary skills and strengths. You can’t have a team made up entirely of quarterbacks.
Similarly, you are the quarterback of your real estate team and the rest of your team members should complement what you do. They should bring skills and experience that you don’t have. One team member brings you deals. Another helps you get funding. And then there are a whole bunch of team members who help you manage the property on a day-to-day basis. The real benefit is that it frees you up to do your best work. You can focus on being the quarterback and not have to step in and be in the weeds with the day-to-day work.
Your team should help you reduce risk. For example, a great property manager will help maintain your property so it’s safe for tenants. They’ll also ensure that things like fire alarms and carbon monoxide detectors are regularly checked.
Finally, a great team will help you find other team members. The sports analogy works well here too. Great players will attract other great players to join their team. Similarly, a great investor agent likely knows a great property manager. A great property manager will know several great contractors.
Local vs. Remote Team Members
Team members can be local vs. remote.
Local means close to your investment property. A property manager, for example, will need someone nearby to check in on the property, meet with tenants or other local team members, or meet with local officials. Remote, on the other hand, means that they can be a fair distance from your investment property and still be effective. For example, a real estate accountant does not have to be local to your property. They can be thousands of miles away and still advise you on your Federal and State taxes.
Local team members include the following:
- Investor Agents
- Property Manager
- Contractor
- Inspector
- Real Estate Lawyer or Title/escrow company
- Handyman
- Cleaner
- Local Bank Executive
Remote team members include the following:
- Real estate CPA/Tax Strategist
- Asset protection lawyer or company
- Residential lender
- Commercial loan broker
- Insurance broker
- 1031 exchange company
- Cost segregation company
- Bookkeeper
- Virtual assistants
- Interior designer
How to Find Your Team Members
There are many ways to find team members. One of the best ways is the word-of-mouth referrals from other investors. If you meet a successful investor, they undoubtedly have great team members in place already. Their team is what makes them successful. However, it’s important to keep in mind that not everyone is willing to share their team members. That is unless you are part of a tight-knit community of like-minded investors like we have in our Regional Investing groups.
[Looking for another vital member of your team? Be sure to check out our Vendor Directory to find our vetted and recommended team members]
Another source is searching various investor forums. These are public real estate forums where anyone can join and post. The downside with these forums is that they can be filled with people trying to scam you out of your money. If you’re a high-income professional, this puts you at risk of being a target. The bottom line is to proceed with caution when sourcing team members from these groups.
From there, there are various review sites (e.g., Yelp, Angie’s List) and search engines (Google). Many of the vendors listed above are going to be listed on these sites. Some are even going to have ratings and reviews. The downside with these sites is that the ratings and reviews are sometimes not reliable. For example, when looking for property managers, they typically have reviews from tenants and owners. If you have an angry tenant posting a negative review, this isn’t necessarily a bad thing for you as the owner. It may just mean that the property manager is aggressive about protecting the owner’s investment. So when looking at reviews, be sure to carefully sift through the reviews.
Creating Lasting Relationships
One of the most important aspects of building a winning team is to establish great relationships.
When building your team, really take the time to connect with the individual and show that you care about them. It helps to show them a vision of the future – how you intend to grow your portfolio and how this will ultimately help them grow their business.
Another important aspect of building a lasting relationship is to be great to work with. Nobody likes to show up to work when they don’t like the people around them. If they like working with you, they’ll keep showing up to work.
Some way to do this is to be easy to work with. If they make a mistake, don’t give them a hard time. We had a situation one time when our contractor chose a poop brown color for our rental. The finished result looked terrible, at least in our opinion (see image). To this day, I still give him a hard time about it, but in a fun way.
Another way to be great to work with is, don’t nickel and dime them. Be generous. They are trying to make a living too, so don’t squeeze them too hard, or else they won’t have an incentive to be there for you when they have better options elsewhere. This might seem hard to do when you’re trying to eke out a profit from your rentals each month. A better way to do this is to figure out other places where you can cut expenses or better yet, significantly improve your revenue. If you can do that, you can not only pay your vendors well, you can still cashflow well.
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Key Takeaways
Building a great team starts with knowing who you need on your team. Some are going to be local, others remote. One of the keys to your success as a real estate investor is to build a great team. As the quarterback of your team, building that great team all starts with you!
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