What "Professionals" Do You Trust With Your Investment Deal?

Who should you be taking advice from about an investment deal? So many “professionals” you have access to want to give you their tools and their advice.

The problem is that a lot of times, these professionals have a lot to gain from you jumping in.

Property Management Companies

I know this topic is very cynical but I have run across it a lot. I recently saw that the Chief Marketing Officer of a major property management company based out of Minnetonka Minnesota, sent out a spreadsheet on how to analyze a deal. It was a detailed ROI analysis that is available to anyone on the Internet. The analysis estimated about 20 percent in yearly expenses. The problem that I have with this is, in most cases, not only is it inaccurate but it also doesn’t even cover this particular big box management company’s fees.

They are putting this out to convince people to invest in property, which is good, however they are giving their clients an unrealistic view of what to expect out of a major investment.

Agents

Can you trust your real estate agent? It depends. Do they invest? Do they have rental properties? How well do they know the market? I own 7 units in one area North Minneapolis and I am still hesitant to invest in other parts of the area because I don’t know what to expect.

An agent can do an analysis, run monthly payments VS rents, include an estimate of expenses and all of that is great but they cannot prepare you for what to expect. What if you plan to manage it yourself and then find out that you just don’t have the time? Is there a cushion in your cash flow to hire a property manager?

How much is your agent getting paid? Obviously they are getting paid the more you spend. Are you confident that the agent can give you a non-biased analysis even if it means they get paid less?

I only bring this up to point out that this advice is coming straight from a salesman no matter how much they seem like your friend.

Before you invest in a property, make sure you have done enough research to trust the numbers yourself. Run it by people who have nothing to gain from the deal. Throw it on the Bigger Pockets forum, ask a friend or a relative who has experience, or simply look at worst case scenarios and make your conclusions from there.