In real estate investing, building a team you can rely on and trust is essential to your success. A lot of first-time investors are under the impression that going it alone is the way to go. By doing everything themselves, they think they will save money. This is in fact, false.
Having a Good Team Can Save You Thousands of Dollars
Having a carefully selected team can not only save you thousands of dollars, but they can steer you clear of major issues with potential investment properties and bad buys.
Example 1: A mortgage broker is able to find a B-lender to manually underwrite your loan and ends up shaving a whole percentage point off of your loan. Savings on a $250,000 amortized over 25 years (4% vs 3%) = $39,581
Example 2: A real estate agent can do a comparative analysis on the property you are interested in and find out what you should start your offer at. Potential savings = $ tens of thousands
Example 3: A general contractor can walk a property with you to give you a general estimate on repairs and point out major issues that may not make a property feasible. Potential savings = steering you clear of a bad buy.
Convinced on the importance of your team? Now who exactly needs to be on it?
Lender and Mortgage Broker
It is always recommended to begin to get your financing together BEFORE you actually need the money. Whether you use a traditional bank, a mortgage broker, a credit union, or private/hard money lenders, you want to have the relationships and terms established up front before you make any offers.
Real Estate Agent (<-That’s Me!)
A key member of your investing team, it is important to work with a real estate agent that is investor savvy. They should also be willing to work hard to find the right property for you, whether that’s sniffing out properties that are undervalued, writing out and sending multiple offers each week, or playing hardball for you during negotiations.
Real Estate Attorney
Useful not only to help you process transactions efficiently, but also to help you structure your business to protect your personal assets and assist with partnership deals, etc.
The accountant you choose to work with should know the ins and outs of real estate. In addition, they should be able to help structure your business in a way to maximize profits and minimize taxes.
Whether you need short-term construction insurance, or long-term insurance for your buy and holds, having an insurance agent you trust on your team is vital. Be sure to shop around, good ones will understand what you need and find ways to save you money.
A good appraiser can not only give you an accurate valuation of a property, but also suggest the most efficient ways to raise the value of a property. They should specialize in both your target market and the types of properties you are interested in.
In doing your due diligence during the purchase of your property, you may need the services of a surveyor to assess boundary lines, elevations and other encroachments.
Environmental Company/Industrial Hygienist
If you suspect mold, asbestos, or any other environmental hazard, you’ll want to have a company handy for testing and abatement.
Architect and/or Structural Engineer
If you are taking on properties in need of major repair, these professionals will be an essential part of your team.
One of the most important members of your rehab team and sometimes difficult to lock down. Follow the suggestion from BiggerPockets: “When you find a great GC, remember to take good care of them. Pay them promptly, be clear with the scope of work, and be super clear on expectations with both money and project timeline.”
Electricians, plumbers, etc. While your GC may be able to take care of these subcontractors for you, it is important to get recommendations and/or meet with a few in case of emergencies or if a problem arises with your GC.
Pest Control Company
At some point in real estate investing, you will likely have to deal with pests. Whether it is bed bugs at a multi-family complex, or rodents at a flip, you’ll be glad to have a company you trust to take care of it.
You may decide to manage your rental properties yourself or you may choose to hire a company. Either way, property management companies offer a wealth of information on the local market. Regardless of your decision, it may be helpful to interview a couple to learn what they charge and what they offer. Be certain that the property management company you hire has experience, is responsive, has a good reputation and will have time when you call. Good property managers can tell you what you should get for rent in a given area BEFORE you buy.
An essential member of any rental team, your handyman will take care of all the small things that come up with your properties; leaky faucets, problem toilets, drywall repair, etc.
Important to have on call for both rehabs and rentals for a quick turnaround.
Accountability partners (peers or mentors)
Find someone who can support you and help you stay accountable to your goals. Whether it is a peer in the same stage of real estate investing as you, or a mentor who is where you want to be in 5 years, having someone you can talk to regularly will help you reach your goals.
You’ve starting building your real estate empire, and now you want to plan for the future. You will require the services of an estate planner to learn how to protect your family’s future and ensure your legacy lives on with those you love.