Today, I’m going to break down who you need to hire on your real estate investing team, to ensure your success and really help you get your whole investing career off the ground.
I know at the beginning, it can be quite frustrating because you don't know how to start, who to talk to, and who to hire. I hope this post helps you get that clarity on the people that you're going to want to start interviewing and speaking to, and eventually hiring on your team.
Having a good real estate team around you of professionals that know what they're doing is really going to make or break your success in this industry.
The first person is a real estate agent. Now, you may be looking for deals in different ways that are not on the MLS (check out my blog on this topic here) which is great, but I think having a really good real estate agent on your team, that specializes in investments is going to make a huge difference in your investing success. Look for a Realtor that has experience with investments and has their own real estate investments, so they know exactly what you're looking for and exactly the type of deals to be sending you.
Lending Specialist/Mortgage Broker
The next person on your real estate team is a mortgage broker. Often times, before you start looking at properties with a real estate agent, they're going to want you to speak to a mortgage broker or the bank. They want you to know exactly how much you can afford and how much you're going to need as a down payment and run through the numbers with you.
These should be the first two members on your team. Your lender or mortgage broker should also be knowledgeable in investments, because they'll be able to educate you on different ways to finance an investment property.
The third person to hire on your real estate team is a property manager. Now, you may think that you are going to manage the properties yourself, but I still want you to find a property manager.
I think that the number one reason why most people stop investing in real estate and why they quit, is because they start managing the property themselves. Once they get their second or third property they can get overwhelmed, by the little annoyances that come along with managing and the stress and the headaches of it, that they're just like, "Forget it. I don't want this. I'm not interested. This is not for me."
That happened to me. I was managing my properties myself at first. I thought it would be a great learning lesson for me and it was! But at the end of the day, when things started to get little dicey (and very stressful), I needed to have somebody as the middleman between myself and the tenants and to help me manage the property professionally.
I was also about an hour away from the city that I invested in, so having a property manager was so crucial for me. Even though you may want to manage the property at first, yourself, definitely consider having a property manager in the roster, so that if something comes up, you change your mind, you want to go away on a long vacation, whatever the case may be, that you have somebody there to step in, and do the day-to-day managing for you.
Another professional to hire on your team is a real estate lawyer. Your real estate lawyer is going help you close the deal. There are also certain legal issues that may come up along the way. Having someone that you have a good relationship with, that you can go to for help in those situations is really helpful.
I'm not gonna lie. This can be a little difficult in my opinion. Sorry to the contractors out there but it’s hard to find a good, honest, above board, fast, efficient contractor! In a lot of cases, when you're investing in real estate, it can be really smart to invest in a property that needs work. If you can get a contractor in, as soon as you take possession of the property, do the work that you need to do, you'll be increasing your equity right away, because you're increasing the value of the property that you just purchased. You will be forcing appreciation AND have the benefit of a tenant moving into a renovated property.
Contractor’s are really important. Take some time to try to interview people and try to ask around, get references, and look for a really good contractor (Let me know if you know any!!).
Along the same vein, also have a handyman, or maybe have two or three in your contact list. Somebody on the ground, that's willing to do the smaller jobs, that a contractor wouldn't do. If there's an issue that comes up with your tenants, you can have them speak with the handyman directly and cut yourself out as the middleman.
If you have a good relationship with that person, then you may have it set up, so that they can do repairs under a certain amount of money, let's say 200 dollars. Anything over that, they have to speak to you first.
They are such an important part of your team. They're the people that are going be there to fix the things that you do not want to fix. I certainly did not want go and fix a flooding toilet, or fix a broken light fixture, or whatever it was that came up along the way.
Believe me, things do come up along the way.
You want have people on the ground that you can contact, that will help you in those situations, so you're not stuck scrambling around.
For myself, when I first started out, I was investing in student housing. The insurance is a little bit more complicated, and more difficult to get.
I made sure to hire a really good insurance agent that would help me to get the proper insurance for that type of asset.
These are the different players that will be helping you find the deal, finance the deal, close the deal, renovate, and help you with ongoing maintenance. They are all really important people to have on your team.
I can’t stress enough the importance of building a super solid team around you.
At the same time, if something doesn't work out with one of these professionals, you're not committed to them no matter what.
You don't have to continue on with anyone that you're not happy with.
It will take time to settle in to the right people.
You can also ask various people on the team who they recommend for various roles. Your realtor especially will know many contacts that you will need. You can definitely rely on them, to help get references.
Just know that this is your business. You are hiring a team to work with you.
Ultimately, at the end of the day, if you're not happy, then you can just find somebody else, that will replace them on your team.