261: Building the Best Team – Friday Fundamentals

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Building the Best Team

Real estate investing is a team sport. You don’t have to look far to see that. Take buying an investment property for example. We’ll walk step by step through the process and look at the team it requires to be a successful real estate investor.

  1. You, the investor, look for an investment property to purchase. Likely, that search isn’t solo. You might enlist the help of a realtor to find on-market deals, or build a direct-to-seller campaign using the help of virtual assistants, local support, and many other creative ways to find those elusive off-market deals.
  2. Once you’ve found the perfect deal, the next step is to get it under contract. Your realtor can help with this process, or if you’re more experienced you can navigate it on your own. Using your state’s real estate commission approved real estate contract is usually a good approach.
  3. Next, it’s time to get the financing process started. You’ll need a good lender who is experienced with investment property loans. Your lender will be able to help you apply and qualify for a loan that fits your investment strategy. They will also help and guide you through the process of getting to the closing table with the title company, and preparing the loan documents needed to close.
  4. Behind the scenes, your title company is doing the heavy lifting, making sure the property has a clear title with no leans, encumbrances, etc. Your title company handles the transfer of the funds, working with your lender to transfer the funds to the seller, only after all the appropriate paperwork has been signed by both the buyer and seller. Finally, you’ll close on the property, and this is just the beginning.
  5. Now you need a solid team to operate the property. You will typically enlist the help of a property manager unless you decide to self manage the property. The property manager will take care of the day-to-day activities from showing and leasing, to collecting rent, handling maintenance requests, and creating monthly P&L reports.
  6. Keeping an accurate record of your finances is crucial. These records will feed into your tax returns and future loan applications. Hiring a bookkeeper can be a huge help in this area. If you’re just starting out, you may manage the bookkeeping on your own. I’ve found Stessa to be a great asset management software that helps me manage the finances in my portfolio.
  7. Taxes are one of the five ways you’re paid as a real estate investor, so it’s important to make sure you’re getting the most out of it as you can. Hiring a good CPA to handle your taxes is critical. Unless you’re a CPA experienced with real estate investments, I suggest you get a good CPA on your team. They’ll be worth their weight in gold, not to mention saving you a lot of liability when you file your taxes on your own. Your CPA will be able to help maximize your deductions, consult on different tax saving strategies, and so much more. Definitely hire a good CPA, and you won’t regret it.
  8. Investing in real estate will sometimes require you to enlist legal assistance. From dealing with tenant/landlord suits to asset protection and corporate setup, specialized attorneys can be an asset on your team. There are many different areas of law, and finding an attorney who specialized in a  specific area you need is important. Ask around for references and find an attorney who will fit well on your team when you need them.

You can scale this team up or down to meet your needs. Each one of these team members will serve an important role on your team. But fortunately for you, this doesn’t mean you have to hire a team of a dozen people full time sitting in your office. You can hire each of these people for a specific task, kind of like a consultant. Other team members you may consider, depending on your specific business, are:

  1. Partners
  2. Investors
  3. Syndication attorney
  4. Cost segregation consultant
  5. Property tax consultant

Go Far Together

“If you want to go quickly, go alone. If you want to go far, go together.” – African Proverb

Real estate investing is a journey and one that you will hopefully take far. It’s not a  get rich quick way to wealth. No overnight successes, no striking it rich, and no short cuts. Rather, building a team supported by processes and systems is the key to success. Real estate investing is said to be a people business. It’s not complicated and doesn’t require you to start up the next tech company, design a widely used app or any of that. It simply requires building or using systems, creating processes, and leveraging the experience of others to build wealth and achieve financial freedom. Starting with yourself, learn as much as you can about investing in real estate, then start building out surrounding yourself with the best team you can. One day you’ll look back at your journey to that very first deal and realize just how much you accomplished with your team.

Resources

Stessa.com

 

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