Ever wonder what the secret sauce is behind the success of the most renowned real estate investors? But building the ultimate real estate investing team isn’t about throwing a bunch of business cards at a wall and hoping they stick. It’s about strategic planning, mindful selection, and fostering a collaborative environment where everyone thrives.
It took me a while to realize that I couldn’t do everything on my own and that I’d need to rely on others. I spent years honing the art of interviewing and screening potential team members because having a weak link on the team is a surefire way to get less-than-stellar results.
I got my start with single-family rentals in California, where I lived. Thankfully, I traveled a lot for work, and so since I was now a self-proclaimed real estate investor, I was constantly looking at opportunities wherever I happened to be for my job. What I quickly realized is that cash flow in out-of-state markets vastly outpaced that of my California rentals. But building a team and owning properties across state lines seemed daunting…here’s the truth: it wasn’t as hard as I thought!
Become A Successful Real Estate Investor With The Essential Six
Building a successful real estate business isn’t a solo act. Just like any winning team, you need a strong lineup of players by your side. So you’ll want to get to work on developing your Essential 6, the professionals who’ll guide you through every step of your investment journey. Whether you’re a seasoned investor or just starting, these are the key players you can’t afford to invest without:
- The Savvy Scout: Real Estate Agent – Finds profitable deals and negotiates on your behalf.
- The Money Mover: Mortgage Lender – Secures the capital needed to close deals.
- The Rent Collector: Property Manager – Handles tenants, rent, maintenance, and day-to-day property operations.
- The Risk Shielder: Insurance Agent/Broker – Protects your properties against unforeseen events.
- The Fixer Upper: Contractor – Ensures quality work for renovations and repairs.
- The Strategists: Tax & Legal Advisors – Help you optimize investments, minimize taxes, and navigate legal matters.
Think of them as your eyes, ears, arms, legs, and brains in the real estate world. With the Essential 6 on your team, you can focus on scaling your investments while leaving the day-to-day tasks to them.
The Savvy Scout: Real Estate Agent
While some see them as deal finders, successful investors know they’re much more. They’re your market experts, navigating the ins and outs of your target area, and uncovering hidden gems you might miss if working on your own.
Choosing the right agent makes all the difference. Don’t settle for just anyone! A good agent goes beyond deal sourcing. They can become your one-stop shop, connecting you with a network of trusted professionals – mortgage lenders, property managers, contractors, and others. They can ensure a smooth transaction and guide you through the ownership lifecycle, becoming your long-term, trusted partner.
Remember, just because someone is the most popular, doesn’t necessarily make them the best fit for you. Consider recommendations, reviews, and your gut feeling. You’ll be working closely with this person, so compatibility matters.
The Money Mover: Mortgage Lender
A lender can help you leverage “Other People’s Money” (OPM) to acquire investment properties. Instead of using all your cash, you might be able to borrow up to 80% of the purchase price, leaving you with a smaller cash down payment requirement. This amplifies your buying power, allowing you to acquire more properties and scale faster.
But lenders do more than just open their balance sheets to us. They can also act as part of your defense team. They underwrite the property, ensuring it’s a sound investment, and get appraisals to guarantee its value. By protecting their interests, they ultimately protect yours.
The Rent Collector: Property Manager
Real estate investors have a saying: “We date agents, but marry property managers.” While a good agent can help you snag a great deal, it’s the property manager who becomes your long-term partner, shaping the success of the investment.
Imagine, you’ve spent months working with an agent to land a great investment property. You then hand the keys over to a less-than-stellar property manager, and that’s where things start to fall apart. Tenants go unchecked, repairs are neglected, and rent collection becomes a nightmare. The once-promising investment turns into a money pit that keeps you awake at night.
Finding the right manager can feel like looking for a needle in a haystack, but the rewards are undeniable. A great property manager can turn a good deal into a thriving investment, maximizing returns and minimizing stress.
The Risk Shielder: Insurance Agent/Broker
Let’s be honest, most people view insurance as an expense – a necessary evil you pay to avoid bigger problems. But savvy investors see it differently: a powerful shield protecting their hard-earned assets.
Now, I may be biased (admittedly, insurance runs in my family!), but my experience speaks volumes. I’ve personally experienced three separate fires in my investment properties – a statistical anomaly, especially for a fire protection engineer! Yet, great insurance mitigated my downside and kept me moving forward. A great insurance partner can
- Help shield you from unexpected disasters: Fires, floods, tenant negligence – life throws curveballs, and insurance safeguards your financial well-being.
- Become your risk advisor: A good agent tailors coverage based on your specific needs and properties, ensuring you’re protected against the right risks.
- Advocate for you in claims: Dealing with claims can be stressful. A reliable agent acts as your advocate, ensuring you receive fair settlements and smooth claim resolution.
Remember, I’m not just an insurance enthusiast; I’m an investor. Investing in the right insurance is investing in peace of mind.
The Fixer Upper: Contractor
Contractors: the skilled hands that breathe life into your investment properties. But where do you find these reliable rock stars? Don’t worry, building your team doesn’t require some secret sauce…it’s all about repetition.
Remember, real estate is a relationship business. Leverage your existing network! Ask your agent, property manager, or insurance representative for recommendations. They likely have a network of trusted contractors they work with regularly. Property managers are repair ninjas, dealing with issues daily. So, if you have one, they might already have a go-to contractor or handyman. In that case, you can leave the repairs in their capable hands.
For major projects, consider asking your property manager to oversee the job and obtain quotes from their contractor. However, this might be outside their usual scope. Building your contractor relationships can be valuable, too. Interview several candidates and see who aligns best with your needs and budget. Word-of-mouth recommendations are always helpful.
The Strategists: Tax & Legal Advisors
Think of your real estate journey as an exciting, new adventure. But like any expedition, you need the right guides to navigate the tricky terrain. That’s where tax and legal advisors come into play. Sure, you could wing it, but successful investors know the risks are just too high to DIY it. Mistakes in these areas can cost you dearly, both financially and legally.
Just as explorers navigate uncharted territory, these professionals possess the knowledge and experience to guide you through the complexities of tax and legal codes, ensuring you stay on the right path. By identifying potential risks, they help you steer clear of costly mistakes, safeguarding your investments. Moreover, they serve as interpreters, translating intricate legalese into understandable terms. This clarity empowers you to make informed decisions confidently, knowing the intricacies of the law and tax implications.
Starting out? Don’t worry, you don’t need them 24/7. But build relationships early. Find professionals who align with your values and goals. Ask questions, learn from them, and build a foundation for a long-lasting partnership. Remember, knowledge is power.
Tips for new investors:
- Start small: Begin with one or two key roles, like a real estate agent and property manager in your target market.
- Seek referrals: Leverage your network and ask trusted advisors for recommendations.
- Focus on cultural fit: Look for individuals who share your values and work ethic.
- Invest in training: Make sure you’re well-equipped to spot and connect with the best of the best.
Remember, building a team isn’t just about efficiency, but rather it’s about building a support system. Surrounding yourself with the right people can make your real estate journey smoother, more enjoyable, and ultimately, more successful.
Keep in mind, that team isn’t solely about snagging the “top” professionals; it’s about securing the perfect fit for your needs. Don’t hesitate to start with a modest core. You may not require every team member right off the bat. Prioritize forging solid relationships with your agent, property manager, and lender. As your investment portfolio expands, you can broaden your team to include contractors, tax advisors, and legal experts.
So, take the plunge! Begin constructing your real estate dream team today. With the right individuals backing you, you’ll be well-positioned to learn the ropes as you’ll have your team to fall back on.
And don’t stress, you’re not on this journey solo. MyFI academy is tailor-made to equip you with the tools and insights necessary for relationship development to ensure you’re surrounding yourself with the indispensable six that you’ll need to scale your portfolio to new heights.
Building your ultimate real estate investing team is like assembling a superhero squad for financial success. Each member brings unique skills and expertise, working together to overcome obstacles and propel you towards your goals.
Remember, this team isn’t just about finding the “best” professionals; it’s about finding the right fit for you. Don’t be afraid to start small. You might not need every team member from day one. Focus on building core relationships with your agent, property manager, and lender. As your portfolio grows, you can expand your team to include contractors, tax advisors, and legal professionals.
So, take action! Start building your real estate dream team today. With the right people by your side, you’ll be well on your way to conquering your real estate goals and achieving financial freedom.
Don’t worry, you don’t need to do all of this on your own. MyFI academy is designed to equip you with the tools and knowledge needed to have informed conversations, build strong relationships, and ultimately, develop the essential 6 that unlock your investing potential.