Which order would you build your core four?

Question

Hey BP,I've decided to look outside my local market for buy and hold investment properties due to the small expensive/competitive market here in Anchorage, AK. I'm from Houston, TX so I chose to invest there since I am familiar with the city. My plan is to use the BRRRR strategy with SFRs and small MFRs I know I need to build my core four and I know one team member will usually give recommendations to the next member of the core four. My question is what team member of the core four would you recommend finding first? I've read a lot that say you should find a good investor friendly agent(one who works with out of state investors) first but I've also been watching some bigger pockets podcast that makes me think I should look for a good property management team first. Companies such as Mynd, and then build the rest of my team from their. Makes sense to me because I would think a good PM would have good contacts for GCs that would be very important for the BRRRR strategy to work. Any guidance or advice would be greatly appreciated! Thanks!

Mike Dymski · Answer

Do agent, PM, and contractors in parallel. You're going to need all the help you can get with OOS BRRRR as it's likely the highest risk strategy discussed on BP (aside from OOS flips).

Greg H. · Answer

I have been in this business for 30+ years and never heard the term "core 4" until I joined BP! That is the truth. I still have not obtained them although I do have many relationships-It took me nearly a decade to find a contractor I could trust and a decade more to have my own crew-30 years and well over 1000 flips and probably more and agents I tell to bring me deals NEVER do. -Do not need a "lawyer" as I have done the right thing evidently and never been in a lawsuit Go find a deal and then find another and everything will fall into place. On a side note, I did a deal in Anchorage this year and loved the town

Drew Sygit · Answer

In our opinion, your best team member should be your Property Management Company (PMC). They have to deal with any property you buy every month until you sell or terminate them. Everyone else on your team will be transaction-based and not really involved after a purchase.

Axel Meierhoefer · Answer

@Jeromy Jordan As others said, if I were somehow determined to make this happen following David Geene's book, I would do a parallel approach. Honestly I think a lot of the things that have already been said, and especially what @Greg H. pointed out, is also my experience. My solution was to invest with turnkey providers out of state. I know that BP is not fond of that approach but the results are what counts for me. My criteria are very strict and follow @Chris Clothier book with some personal additions.That way I have a small group of qualified TK's and I found that I am working with trustworthy experts on all aspects: contracting work, maintenance, PM, sales, title, permitting, finding deals, etc. In addition, I have found lately that each of the "traits" you need to do BRRR long distance where you can't really be there yourself turn out to cost as much if not more than TK.I think of it this way: You try to create a team of people who are available to follow your guidance from far away in a hot market where good experts are in super-high demand, and they're supposed to create great quality for a lesser price than local experts already working as a team in a turnkey company can. It's probably not impossible but I believe it very unlikely to work out. Why go through the pain when you can get it all done without the hassle. That's what I do working with TK providers in 3 states.

Whitney Hutten · Answer

@Jeromy Jordan I'd find your PM first (they can help you fill in the contractor and realtor in most cases), then realtor, then lender. If you have no properties, then find the agent, then PM (construction), then lender.

Antonio Cucciniello · Answer

@Jeromy Jordan I always preach for you to find an agent first. Why? Because you need an agent to look at properties on the MLS (this is how most people start out).Now, if you have no properties you are looking at, do you think a property management company would want to work with you as much? Likely not. They may answer a few questions, but also after seeing a few properties usually you will have more experience and sound more experienced when talking to them. Which helps as well from a beginner's perspective.

Tucker Cummings · Answer

Speaking from experience, when I first got started investing away from where I live, the first person I got was my property manager. Property managers are usually extremely well connected because they need people to do repair work, they know agents that bring them clients and tenants, they know other investors and their networks, they get sent off market deals, the list goes on. Once I had my PM in place, everything else was incredibly easy.

Mark Brown · Answer

@Jeromy Jordan. Finding the good re deal is always the hardest part. I try not to be biased, but you should really find the PM company first before a realtor. They can be a huge asset in getting feedback on potential properties from a rent-ability, cash flow, and deferred maintenance perspective. If you do nothing else, at least let the pm company find and place your tenant. Too often realtors will try to do both and their incentives are just not in the right place, generally. And on PM companies, look for people whose pm company is their main job. Too often I’ve seen realtors dabble in property management mainly because they want the commission on releasing your property but they provide terrible service to the tenant in terms of poor or no maintenance because that’s really not whet they do. So after a year the tenant leaves frustrated instead of renewing and the realtor leases out your property again for a nice commission but all this comes out of your pocket with turnover costs. As for mynd ... come on, just search for them more on bigger pockets for experiences. Property management isn’t a commodity. It’s personal. If you want a plumber sent over to fix a slow draining bath tub for $245 then hire mynd. If you want a company with a maintenance guy that can unclog it for $40 - $50 then hire a local property management company. Best of luck. ... I’ll get off my soapbox now.

Matthew Rolf · Answer

Hey @Jeromy Jordan! I got married in Eagle River so I've been up there many times. If your were ever thinking of investing up there, I think AirBnB / short term rentals is a great niche especially once normal tourism is allowed again.As far as getting going in Houston, if you find a good realtor or PM (if not using a realtor) who works with investors, they will be able to connect you with the rest. Finding the deal is the main hurdle.

Jeromy Jordan · Answer

@Robert Haney I appreciate your frankness and I agree the cards are stacked. You make very good points. I have family and friends in Houston that know what I am doing, see my vision and are on board with helping. Do you have any ideas on how I could minimize the risk of getting ripped off by contractors, becoming second thoughts to agents, and managing the PMs?off topic a little bit but any tips on how you found soo many off market deals? Maybe I can apply some of those techniques in my local market here. Right now I've been just looking on market at REOs, going to Auctions, and driving for dollars and cold calling.