The strength of your investing business is in the people you surround yourself with. You can have access to capital and a good plan on putting it to use, but if your team is poor, ultimately you will suffer. The importance of your team is magnified as you are just starting out. You are pulled in many different directions and aren’t sure exactly which way to go. It is critical to have several team members you can lean on for advice and guidance until you find your footing. Even when your business takes off you will still find yourself relying on your team in almost every area of your business. A good team doesn’t ensure success, but it certainly makes things a whole lot easier. Here are five essential team members for any new investor.
- Real estate agent. Regardless of how you plan on making offers, you will need a good real estate agent to guide you through the process. It is not enough to call the first agent you see that has a listing. As a new investor you are going to have a handful of questions and may need some guidance along the way. The most productive realtor isn’t always the best for your new business. You also don’t want to use a certain agent because they are a friend or family member. You can give them business once you are established, but as you are staring out you need to gain some traction. Working with the right agent will help guide you on how to present your offer, the right number to come in at and which markets may be on the decline. They will keep you informed of market trends and which sellers to stay away from. Ideally, you will work with your agent on many deals for years to come. A good real estate agent is at the core of every successful investor.
- Real estate attorney. As much as you may only consider the upside on a given deal, a good attorney is there to protect your liability. 99% of all real estate transactions go pretty much as planned. Even if they don’t end up closing, there is almost always an amicable split and both parties go their separate ways. However, on the 1% that is a problem you will be glad you have a quality attorney by your side. Even experienced investors can get stumped with the language on a contract or other seemingly mundane issues from time to time. Your attorney is there to make sure you are protected from every potential scenario that you could never think of. They will also iron out contract and legal issues to push your deal to the closing table. You may go several deals without hearing much from your attorney, but all it takes is one save the day. It is difficult to put a price on just how valuable a good attorney is for your business.
- Mortgage broker. If you are just entering the business, you should align yourself with a quality mortgage broker. Traditional lenders do plenty of loans well but aren’t always the best option for investors. Given the way investors generate income and the types of properties desired, investors often require outside the box products. A good mortgage broker typically has a dozen or more lenders they are affiliated with that have numerous niche programs. All it takes is one new program to change the way you do business. Over the past few years more loan programs for investors have come to the market. These programs are not available with every lender, and definitely not at your local bank. It is worth your time to set up a meeting with a mortgage broker to find out if there any new programs and see what you qualify for.
- General contractor. Building a team is very much like the chicken and the egg. You aren’t sure if you should find deals first or find people to fill out your team. This is especially the case when it comes to finding a good general contractor. Time is money in any business, but particularly the case when you are self-employed. Many contractors won’t take a meeting unless there is a specific property and potential work involved. Most new investors will find their contractor at networking meetings and investment clubs. The good contractors know that a new investor may not yield a short-term return, but if they pop there could be a ton of work down the road. Like everyone on your team, you want to build a relationship with your contractor where you feel like they share your vision and are willing to work with you. If you are into rehabs, a good contractor is an absolutely vital part of your team.
- Hard money lender. It is not enough to find a traditional lender and be done with it. Depending on the type of finding you do, a mortgage broker may not do much to help your business. Every new investor should have at least one hard money lender they can call in a pinch. These are for the deals that need a quick cash closing or have excessive worked required. Finding a hard money lender can be as easy as asking your real estate agent, attorney or other members in your network. You may not think you have a need for hard money now, but you never know what the future of your business holds.
There is literally another dozen or so members you could add to the list, but these are the core five. If you are just starting out look to fill these five spots and go from there.
