Blog Post
Why You Should Build Your Real Estate Team Like A Football Team ?
Nov 10, 2022
Real Estate is a team sport - Who do you need to be successful ?
Real Estate is a lot like Football, it doesn't matter how great you are individually you need a good team around you to be consistently successful for a long period of time. Tom Brady was a great example of that, he may be the GOAT (still kills me to say that as a 49er fan) but he realized he didn't have the team around him on the Patriots to compete for a championship so he made a tough decision to leave what he knows to go to a better team. Real Estate investors have to do that same evaluation of their team. The team that got you to 10 units may not be the team that gets you to 100 units. Let's see who you need as you progress on your real estate journey.
In the beginning your team will be small for a little while and you'll be wearing a lot of hats. Here is your starter real estate team and they will get you through your first few deals.
- Real Estate Attorney - Do not get a jack of all trades attorney. At this stage you don't need an attorney that only does real estate but at least 80% of their time should be spent on real estate.
- Investor friendly RE Agent - DO NOT get your brother in law 's best friend that sells houses on the weekend. Find an agent that works with other investors. They are hard to find but they are out there. This is very important in the beginning because they will guide you during the transaction and get you to the closing table.
- Real Estate Accountant - Same idea as the attorney, doesn't have to only focus on real estate but a majority of their business should be servicing real estate investors.
After you've done a few deals it's time to step up your game and bring on a couple more players on your team.
- Property Manager - As you add doors to your portfolio you will realize quickly how important a property manager is and finding a good one can help you scale your business very quickly. In keeping with the football theme, you are the coach of this real estate team and the property manager is your quarterback. They run the play you call and when you build a great relationship they can call an audible to score a touchdown.
- Contractor/Handymen - This is another very important part of your team and ideally you'll have a few of them to keep them in check.
- Mortgage Broker - Acquiring and refinancing your deals at competitive rates and points is paramount to your success. Find a broker with contacts with banks, credit unions, hard money lenders and private lenders.
- Hard Money Lender - Your mortgage broker may have a few hard money contacts but I like to have personal relationships with my HML. When you need to close fast on a great deal this is who you call.
- Wholesalers - Now that you have a nice portfolio and have proven you can close. Reach out to the best wholesalers and ask to be on their preferred list (these are the investors they call first before they send the deal out to their blast email list).
- Insurance Agent - Insurance always gets overlooked until a wind storm rips off half your roof or you get a really bad sewer back up. Educate yourself and make sure you are properly insured.
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I’m standing in the middle of this massive stadium in Minneapolis, watching Wyclef Jean performing on stage surrounded by kids in hoodies and bright Nike sneakers while scrolling through their OpenSea app. As a 40-something year old Real Estate professional from New Jersey, I could’ve felt out of place but truthfully, I was right at home. I was at VEECON.
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Be prepared before you hire a Property Manager 1. Is the Property Management Firm licensed? In most states property managers and property management companies must be certified real estate professionals to place tenants and collect rent on your behalf. Make sure you understand these laws in your state and municipality. 2. How Are the Property Management Fees Structured? This is probably the most important question. Make sure you understand how the fees are triggered, how they are paid and when you want to be notified before fees are charged. The fees you'll pay can vary due to many factors. These factors include amount of units, class of property (A, B, C or D class), deferred maintenance and location. You will also pay extra for tenant placement and capital improvements. Also ask about the costs & process to evict a tenant. 3. Do they have a base fee? A base fee is a set amount the property manager will receive monthly no matter how the property or the manager is performing. YOU SHOULD NEVER PAY A BASE FEE! The #1 job of a PM is to collect rent and if they are going to receive payment without collecting rent, in my opinion the owners and PMs interests are not aligned. 4. What software do they use for Property Management? Owners should inquire about the software the manager is using to see what kind of investment they are making in technology. They don't have to use the most expensive software, but they shouldn’t be using spreadsheets either. The right software will make this cumbersome process of owning property much more efficient. 5. How Much Experience Does the Management Team Have? Longevity and experience are important factors when it comes to a property manager’s success. If the business has many years of experience, they should know how to anticipate your needs and adjust accordingly. Also, you want to make sure that the property management team has experience with your property type – be it commercial or residential. BONUS: Does your property manager own rentals as well? This may be a personal choice, but I want my PM to own rentals as well. There will be many situations that arise where you want your PM to use their experience and knowledge to guide you through the options. If they own themselves, I feel more comfortable with their suggestions.