Building Your Real Estate Dream Team

When I first started building my dream team, I had not even realized it. As far as I knew, I was just getting my ducks in a row and trying to find the right people to help me get my project completed. It wasn’t until I kept coming back to the same people for the same things that realized I had the beginnings of a powerful group of contacts. I still had gaps to fill and would say to myself – “if only I knew someone that ……” That’s when I realized that I needed a whole team. A Super team. I wasn’t expecting to have Monday morning meetings over coffee, after all this would be more of a virtual team than an office team. What I needed was a team of people that brought specific skills to the table – who I could call on to consult me on projects and ideas and could help me to get things off the ground. I needed to figure out, how many people should be on my team and where I was going to find them?

I had a lender already, and I was very happy with him and quite honestly, went back to him primarily for the simple fact that he was able to get me funded before – so why shouldn’t he be able to fund me again? After all, he already had my credit profile, my financials, and was familiar with what I was trying to accomplish. Aside from that he was extremely knowledgeable and very personable, so I had taken an instant liking to him, especially after he handed me my first pre-qual letter. So down the road, it just felt natural going back to him for my next loan. I was not licensed at the time so I still depended on my Realtor to find me listings and submit offers. I was happy with him too, so he also made the cut. Along the way I discovered appraisers that I was comfortable with and a home inspector that was very thorough. Eventually, I discovered the right contractors, landscapers, pest control companies, title companies, etc. All along the way, building up my real estate dream team into a formidable group of experts whose combined knowledge gave me the confidence to accomplish just about any project I had set my mind to. Building your own dream team could significantly improve your prospects for developing a strong portfolio. Here are a few key roles that you should fill to make your team as productive as possible.

A Reputable Lender - This may very well be the most important member of your team and there is no rule that says you can only have one in your stable. Having access to money is the one of the keystones to investing successfully in real estate and having multiple sources choose from can help ease the burden of finding money. While I believe it’s important to stay loyal to your team, you may however need multiple lenders who have differing offerings. One lender may not handle commercial lending while another may not deal with micro loans or hard money. Each lender on your team should deal with a specific type of lending so that you have more options when it comes to financing your projects.

A Local Real Estate Agent - Again you do not have to dedicate yourself to just one. I went through about 3 agents before I finally settled on someone I stuck with. Out of respect for the agents, you should let them know that you have a couple of other agents keeping their eye out for you also. Some agents may not want to give you the time of day – that’s Ok - simply move to another agent that will. Over time, you may notice some working harder for you than others. Maybe they have a faster response time, or perhaps they send you more detailed information, know the region better or deal specifically with the type of properties you’re looking for. In any case, once you find someone that you like and trust, that treats your relationship like a partnership, there should not be much reason to use multiple agents unless they are in different markets. Reward their expertise and high level of service, stick with them and keep them as valued member of your team. Your agent may also have some very strong contacts to other people you need on your team – be sure to ask for your agent for referrals to see if they can connect you to other superstars. High quality agents work with other high quality professionals and generally have no patience for working with incompetence. A seasoned agent will have his own super team in place and should be able to connect you to quality people.

Escrow Officer – working with someone from an escrow office can come in extremely handy in not only in the middle of transactions, but can be a great resource before the sale. An escrow officer that you have rapport with will be happy to get information about properties legal status or ownership. They can also do a preliminary report for you to find out if there is any cloud on the title. The real key is having a good relationship with your escrow officer so that when you have a property in escrow they can help get things moving along and keep you up to date with exactly what’s happening and who is waiting on what. In some cases, just knowing this can spur you to make a move that could help close escrow faster. Escrow officers have a lot on their plate – try not to bog them down with too many requests or you may find that the rapport you built is wearing thin.

Contractor - This is a tough one and may take many years before you actually find the right one, but once you do - you will have a great ally to help build your real estate empire. Contractors are a different breed – many times it is feast or famine with them and availability tends to be an issue for the better contractors as they are always in demand. It is always best to use referrals when selecting a contractor – no amount of online reviews can match the power of a personal testimony to how these guys worked on a project. Did they show up for the job? Were they prepared? Did they come back from lunch? Did the leave the place a mess? These are issues you normally don’t have to deal with, however with contractors, there is always another job waiting in the wings and if it is more lucrative than your job, you may be getting a lot of excuses as to why your project is on the back burner This is when I first learned about performance clauses and realized the importance of using a contract and specifying that “time is of the essence” to ensure your project is competed in a timely manner. Failure to secure a contract of this nature can lead to misunderstandings and headaches down the road. Always make sure that the scope of work is specified as well as the time frame.

When you have a contractor in your pocket, they can be useful for a myriad of reasons. Depending on your relationship and how many projects you work on together, your contractor can be a valuable resource to determine how much work a property will need as well as how much it will cost and how long it should take. Spend enough time with your contractor and you will start to get a feel for these numbers yourself. Contractors can also bring another unrealized talent to the table – they are in the trenches – they see properties and projects all day – they are aware of remodels , burnt houses and other potential sources for property by keeping their ear to the ground. I usually offer $100 finder’s fee if they can connect me to a house that will be for sale before it hits the market. One house brought to me by a contractor yielded over $70,000 in profit and that was without out even fixing it up. The sellers were from out of town and just wanted to liquidate the property so I got it for $55,000, put a very small amount of work into it and turned it around for $130,000 in less than 4 months. I would never have known about that property if I hadn’t asked my contractor to keep an eye out for properties. Having a contractor on your team will be a great asset over the years – even when small repairs come up or it’s time for some remodeling, you will already have a go-to person to call on to get the job done.

Insurance Agent - Once you get into the meat of a deal, you will need to call on your insurance agent. What better way to do business than to have someone who is familiar with you, your assets and your objectives welcome you to their office and offer you some coffee. Having an insurance agent in your rolodex means they can look up quotes for you quickly, offer you bundled discounts and help make sure your not buying too much or too little insurance for your project. Many people simply call the insurance company and purchase over the phone – this is very impersonal and I feel like it is better for the investor to meet in person, with an appointment. Establish rapport with them– let them know you plan to use their services regularly and how you plan to. By working with one person, you can develop a relationship that grows above and beyond a basic insurance policy. They may introduce you to other investors, financial planners, or lenders, and maybe even help look out for properties that may be coming for sale soon. You will get none of this from an anonymous operator taking your application over the phone. When you’re a name and not a call back number, you get more priority.

An accountant - If you are acquiring multiple properties, making improvements, flipping properties, collecting rents, taking deductions, and/or exchanging properties – you may very well need to have accountant on your team. I am not talking about an H&R Block rep that just learned how to file taxes last month – I’m talking about a real CPA in a real accountant’s office. They are not always cheap, but by having a professional pour through your statements and tax returns, they can show you ways to save money, take more deductions, or explain complicated tax strategies that may help improve your bottom line. They understand the latest changes in tax laws for your state. Taking on these tasks on your own could possibly expose you to the risk of violating a law you didn’t even know existed. Accountants shoulder this responsibility while keeping you out of hot water. If you only have one property, or are just starting out – you may get away with doing it yourself so long as it doesn’t get too complicated – however, as your empire grows and there are more balls to keep in the air – it may behoove you to simply put the responsibility on to a licensed, bonded accountant that knows his business so you can breathe easier. Don’t just hand over your papers and walk away – always ask about what his findings revealed – where there any new opportunities for deductions, where here any favorable or unfavorable tax changes or reporting requirements – be sure that you are an active participant in accounting for your records – it will keep your accountant on their toes and keep you in loop and up to date.

Other investors - in many ways investing is about relationships. When you connect with other investors – you’re opening your world to a whole new set of ideas and strategies. By talking with other investors, you can gleam some really great ideas, and perhaps even find partners for future deals. Like you, other investors are always on the lookout for new opportunities and many of them will not meet their specific investment goals, however - when a great deal comes along that doesn’t work for them, they may think of you and call your attention to it. Make a habit of going to investors meetings. The relationships you build from these meetings can last a lifetime and can make a big difference in your investing experience.

Electrician – You’ll be glad to have this guy on standby when you find out the house you bought is trying to run the fridge and the washer/dryer off the same circuit breaker at the same time. They could also help you bring things up to code as well as help you determine in advance how much electrical work may be required once you purchase a property. Having an electrician means that you’re only a phone call away from any electrical repairs. Line them up before you need them – it’s a lot easier to vet them when you’re not under the gun and pressured to find someone fast.

Plumber – For many of the same reasons you need an electrician you will want to keep a plumbers number handy. Some investors feel their time is more valuable spent working out the details of another deal rather than putting their face into the backside of a clogged toilet, and rightfully so. If you share the same sentiment, then having a plumber is a no brainer. I usually try to do as many things myself as I can get away with, being the consummate ‘do-it-yourselfer’ – but even I must admit when a job is outside of my scope or simply not worth the time it takes to do it myself, so I make sure to keep the number of a trusted plumber on speed dial, awaiting that 3am call about a busted water pipe.

Landscapers - This is your cleanup crew – literally. They will turn your unappealing and depleted grass void yard into a small slice of curb appeal paradise. Everyone knows that good first impressions are a strong factor in getting higher offers and when you bring in the pro’s to help your property show in its finest light, you may be rewarded with multiple offers. If you’re investing in rental units, then your landscapers may also help you to maintain the property – keeping the lawn mowed and hedges trimmed so it stays in good condition and continues to look ‘rentable’.

Pest control - If you deal with a pest control company that handles termites, you may be able to get a free termite inspection, which many companies offer in hopes of getting the job. Don’t expect a certification for free however as they will charge you for a report. In addition to termite inspection or eradication, they can also visit your rental units to spray regularly to keep pests like, ants, roaches, and spiders out your investment.

So now you’ve built the core of your power team – but don’t forget that you need supplemental support to. These people may not be a part of your core team that helps you acquire and close on your property, but they can come in real handy to keep things running smoothly. Go to investors meet ups, networking groups, and dog walks. Let people know you’re an investor and that you buy houses. As always, be sure to pump them for information about potential properties that they may be aware of so you can keep building your portfolio.