5 Tips for Building Your Real Estate Investment Team
To be successful in real estate investment, you need a team of reliable professionals that you can rely on to help you meet your investment goals. After all, you can’t find the deals, renovate the property, and secure financing on your own. Instead, you need to create a network of experts in key areas to make every transaction go smoothly and maximize your profits.
Consider for a moment every entity related to the real estate industry. If you were to hand-pick these professionals, what role would they play in your business, and how would they contribute to your success? More importantly, how would you vet possible candidates to ensure that you partner with the right people? Answering these questions can help you avoid early mistakes and help you build positive business relationships that last.
Identify Key Roles in Your Business
Every real estate investor’s business model is different based on their target areas and their business goals. To establish your team, you first need to create a business model and establish key roles that each team member will play. To give you some ideas, many real estate investors partner with entities or individuals such as
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Each of these professionals will help you at different stages of your real estate deal. For instance, you may need to find a broker to secure financing on the front end, an accountant to help you manage cash flow, and a building contractor to help you with repairs or renovations. An attorney will come in handy to help you with legal issues you encounter along the way.
If you get in a tight situation and need to hire someone immediately, you may have to get the first company that looks good on paper and has good reviews. However, your business goal should be to build long-term relationships with people you trust and enjoy working with. Long-term relationships ultimately create win-win situations. They also establish stability – something that is often lacking in the real estate industry.
To build a long-term relationship, try to find someone who has an established business and reputation in the community. Working with trusted professionals brings your business credibility. Also, try to partner with people who share common interests, vision, philosophy, and work ethic. Most importantly, look for companies that also value long-term partnerships and not just looking for a one-off.
Only Work with Licensed Professionals
Consider this scenario:
You hire a friend who happens to be good at framing to renovate the framework in your newly acquired house. They complete the project. You find a buyer and sell the house. Three months later, the framework collapses and the roof caves, injuring the buyer. It is only then that you discover that the friend was not licensed. However, since you sold the house, you are liable for the damage and the buyer’s injuries. Furthermore, you may get hit with a negligence lawsuit. Your finances are drained, and your reputation as a trustworthy investor has now been destroyed.
Regardless of who you hire or what services they provide, make sure the company meets or exceeds all bonding, insurance, certification, and licensing requirements. This helps you cover your liability obligations and ensures that you are working with companies that are legally allowed to operate. If legal issues arise, you have more leverage if you need to dispute an agreement or file a lawsuit.
Do Your Homework
When assembling your team, you need to practice due diligence and find professionals with a proven track record and a solid reputation in the community and the industry. Remember that the person who is the most convenient, offers the lowest rates, or can complete the job the fastest isn’t necessarily your best option.
When researching companies, go online and review their websites and check out any portfolios they provide. Ask for referrals from satisfied customers or other professionals in the business. Look for reliable customer reviews. Continue your research by learning about bids, estimates, contracts, warranties, and other important documents when negotiating terms.
Sever Business Relationships That Are Not Working
Last, do not be afraid to walk away from a partnership that isn’t working. Keep in mind that it’s not always about partnering with the best company. Instead, it’s about finding the right fit. A company may do amazing work but fail to help you meet your real estate investment goals. If so, you may need to call it quits and walk away.
Partnerships fail for all sorts of reasons. A contractor may be too busy to fit you into their schedule. A realtor may not be finding you any deals. Or an accountant may be making too many mistakes. In the end, you do not have to justify severing a partnership. If it’s not working, it’s not working. Make sure you end the relationship legally and try to create as little friction or harm as possible.
You Can Be Successful in Real Estate Investing
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