How did you build your team?

Question

I'm new to the real estate investing game, and would like to find out how other people have built their teams.  This is a tentative plan I'm building in my head, so feel free to critique it and offer your advice, but I want to create an LLC to invest in commercial properties. I want my first acquisition to be an apartment with over 20 units. I want to be able to accomplish this within a year.  Most of my time right now is spent studying how to recognize opportunities and analyze deals.  The next plan of action would be to talk to professionals who will make this deal a reality.

I think the key will be to build a quality team to navigate this first transaction, (and possibly future transactions.)

For my specific situation, I want to invest property out of state.  San Jose is a different beast for investing, and I feel my time will be better focused in easier areas that will generate positive cash flow.

So it would be great to hear general stories of how you built your team, but the icing on the cake for me will be to hear about people who started with similar goals.

Also, I realize each person on the team is important, but who do you consider most critical in getting your deals done? In my head I'm thinking the attorney, but I could be wrong.

I appreciate the feedback, and I will apologize ahead of time for all the questions I'm probably going to fire away with later.

Karim El Sheikh · Answer

Ill throw in mine as well.

Here is how I set up my team. Each have played a role in my investing.

A good real estate attorney
A good general contractor
A good handyman
A good real estate agent
A good mortgage broker

Brandon Boyd · Answer

Everywhere you go network with people.  What motivates me to network with everyone in 6 degrees of separation. What that means is you are six people away from knowing everyone on earth.  Just because Joe Schmoe works behind the counter at 7 Eleven he knows someone that is a multi millionaire that could be your next investor.  You are six people away from knowing "The Donald".  It is amazing once you really start looking at how powerful that is.  One of our salesman at a place I worked for years ago started into real estate.  He met Donald Trump in Trump towers so that is what 2 degrees of separation.  Check out some books at Barnes and Noble on this topic.

Nick Straut · Answer

Yes, i also agree with the same thing. Four above mentioned things are most important but always research first before planning any investments.

Brian G. · Answer

Thanks to everyone who responded.  I am looking to do something along the same lines as Ken.

Stephen McKee · Answer

I have paid as much as $350 per hour. Shop a couple people for reputation and price. It's realy about gut feel.

Ken Sean · Answer

Thank you for elaborating even more.  What is a reasonable rate for a savvy attorney?

Stephen McKee · Answer

Dan, I'm stealing your list and elaborating.

1. Savy real estate attorney 
Don't be cheap.

2. lender(s) 
Direct lender specificaly. Find a mortgage broker with there own wholesale lines. They will have more felxible terms than the traditional lenders. Eg: not countrywide, wamu etc.

Find a direct hard money lender. Not corporate. You are looking for a trust or individual that has there own money to lend. They will have bendable rules.

3. comm broker 
Try to find a national one if you intend on leaving your area to buy in the future.

4. title company (unless your attorney handles title work and closings)
Ask for a rep and build a relationship, they can do a lot of leg work for you. be sure they do double escrows as well.

5. savy accountant 
Make sure he/she has other investor clients. Ask some one for a referal in your REI club or your new attorney.

6. insurance agent 
Let them know what you plan on doing up front. This way you can weed out any one that will get in your way. For example if they don't insure vacant properties you will have a problem.

7. management company (get a backup, as well)
Find an owner that has his own properties. You want them to spend your money like it is there's.

8. contractors/maintenance
Make sure your contractor bids your jobs at cost and shows you his fees. I made a deal with my conractor for $1000 per week mark up and $300 for everyday he is on the job physicaly doing work. Keep in mind people I am in Ca. I usually end up paying about 15% total make up on my rehabs. California average is 20%-25%

Ken Sean · Answer

Of course... How did I forget about that member? :wink:

I absolutely agree. There are going to be a lot of hiccups, but with the right talent, we should be able to navigate those waters okay.  Plus I think its critical to have multiple exit strategies throughout the transaction, and after closing, (which is a whole new thread to have an in depth discussion about).

I noticed a few of you said to get in touch with investors in your target markets.  How did you find those people?  (other than this forum  8))

Michael Rossi · Answer

I think you'll find the most important team member hiding in the MIRROR!

Mike