Steps To Becoming a Great Real Estate Investor
This is the continuation of a series of articles about being a Real Estate investor and this week we tackle your Real Estate Dream Team. The premise behind creating a dream team to work with, is to maximize the strengths of the people around you to make your job easier as an investor.
While it’s important for you to have a basic idea of the process of buying a property, getting financing on a property, legal implications and even renovations on a property, you simply do not need to know the intricacies of all of these processes. This is where your team comes in.
By surrounding yourself with experienced, knowledgeable professionals, you leverage their experience to increase your own. The question that pops up though, is where to find these team members? It would be handy if they all met at a certain bar or coffee shop on Tuesday at 7, but if it was that easy, anyone could do it!
The quickest route to finding them is to become a member of your local Real Estate investment groups and network with other members about who they use and recommend, from here you can create a short list of potential professionals you need to meet and interview. Or if you already know other investors, why not talk to them and ask for their recommendations.
An interesting side note, it’s far better to extol the virtues of your favourite team members whenever possible, than to keep it a secret. By providing them with additional clients and opportunities to contribute to their success, you not only improve your relationship, but also help ensure they succeed along with you. I never could understand why some people felt they needed to keep their contacts a secret, as it actually penalized their partners rather than helped them grow.
Once you have your shortlist, it’s imperative to talk to them and preferably meet them in person. If you are going to be working with these people and trusting them as partners in your business, you better be sure you like them and trust them. This can only be accomplished by actually talking to them and finding out if, you are compatible. Think of it as a first date.
If the people you have found are good, typically they are quite busy as well, so respect their time and make sure they know why you are contacting them and why you want to meet. From there it’s a matter of going in with some pre-prepared questions. Now these questions vary depending on what field the particular professional is in and how you will be dealing with them, but there are some you can ask any group.
First would be, have you worked with Real Estate investors before (common sense here, if you were referred by an investor, well …..). You just want to be sure they do work with investors, are currently working with them and tend to have longer relationships with them. You don’t want to find someone with a high turnover rate of these clients as it is an indication something isn’t working.
Second, would be, are there any of these clients I can contact and talk with? Again, if you were referred by one of their investing clients, you are already partially there, but if possible, it’s great to reach out to others and find out more, plus you can make some new contacts!
Third, what is the hardest part about working with investors? This one is very valuable as it helps you understand their concerns and puts you in a position where you can be mindful of the potential problems they have to deal with. By understanding issues they have run into before, you can prevent or minimize them occurring in your relationship with them, which goes a long ways towards growing a strong relationship!
These basic questions should give you enough insight into whether they are someone you want to work with and would enjoy working alongside. Ideally, you will have additional questions related to each industry, but this will get you started.
Next week I’ll go into basic rental properties and break down the different varieties. If you have questions or comments, be sure to leave me a comment!
You are only as good as your team, so why would you cut corners? Imagine building a house and hiring the cheapest contractors you can find and telling them to just go build something for you and as cheaply as possible. You can imagine the corners that would be cut and the mess you would be left with.
Yet it happens every day with Real Estate investors (and house builders too actually, but that’s a different story!). Any money you save eventually comes back to bite you. The discount Realtor may have cut corners and not accurately measured the property you just sold leaving you open for a lawsuit, along with the Realtor. The family lawyer who doesn’t really understand Real Estate, may not have followed through with all the details leaving you with surprises on the title years later, potentially costing you a sale. Starting to get the picture?
What do you want to be remembered for? All the lawsuits because of mistakes along the way, or the string of successes you had that your support group helped you achieve?
Just to close off, here’s another source for finding professionals to work with. Ask your current team members who they recommend. If they already have other people they like working with and recommend, it can make the process even easier for you to find the people you want to work with.