Real Estate, like most other businesses, is not one that you can handle all by yourself. A successful Real Estate Investor has a team of individuals they can trust through every aspect of the investing process. Understanding the different players and their roles in a real estate transaction will help you put together a great team/network.
Here is a list of different players involved in a real estate transaction:
Deal Finder ( Agent, Wholesaler, Yourself)
Real Estate Investors know the most crucial aspect of investing is finding the right deal. Since this is the case, the most important team member will be the Deal finder.
Who is the ideal deal finder? Deal Finders can come in the form of many roles & job titles , but the most common is going to be real estate agents. Other deal finders include wholesalers, property managers, and even yourself.
If you are planning on investing out of your city or area you are familiar with, then I highly recommend that you don’t try to tackle the Deal Finder Role yourself. You are going to want to find someone who is not only familiar with the city you are investing in, but also specific neighborhoods of that city.
Property manager
Once you have identified your deal finder, you are going to need a team member to take care of the property you have purchased. If you invested in your local community, then great! One option you have is to become your own property manager.
Now depending on the property (units, tenants, location, etc.) this may or may not be the best idea.
The job of a property manager is not only limited to collecting rents and managing tenants. As mentioned above property managers can also make great deal finders. Some of the best deals are found through property managers who have the inside scoop on landlords and their relationship with the property. A great property manager might let you know when they find out a landlord is tired of his property, or if the couple who own the property are going through a divorce and need to sell the property. They also have great knowledge of the condition of the property and if any repairs or deferred maintenance need to be made.
Property managers also have immense knowledge of the areas in which they are managing properties. Since they are more boots-on-the-ground than almost all of the other team members, they know which streets or neighborhoods are better. Probably even more so than an agent.
Too many investors try to cut costs initially and property managers usually receive the short end of the stick. Unless you have an easy to manage Single Family Home or duplex, I would highly recommend looking into finding a property manager.
Lenders
A lender is a financial organization that lends out money for real estate purchases. There are various types of lenders we will cover in detail at a later time. Some examples are Mortgage lenders (long-term financing), Hard money lenders (short-term financing), and Private Money lenders (flexible, short or long term financing).
Lenders operate differently than most other members of your team. Each lender adheres to various rules and restrictions. Since every investor has a unique situation or goal, finding a lender who fits in with your goals is crucial for your success in Real Estate.
Like most of the other positions on this list, the best way to find a lender is through referrals, either from other real estate investors or other experienced members of your team.
A common mistake many investors make is not establishing great relationships with lenders. Although it may initially be easy to find a lender, once you start buying more and more properties, it may become more difficult to finance a property. This is where relationship building comes into play. If you have a relationship with a lender who is aware of your goals and situation, they will be more open to lending you the money needed for your properties. Successful investors should spend their time hunting deals, not a company to fund them.
The Contractor
Of all the members of your Real Estate team, finding a great contractor may prove to be the most difficult. Whether you label them as a handyman or a contractor, you are going to need someone to rehab, renovate, and upkeep the properties you purchase.
Every property owner has experienced the difficulty of finding a contractor who has the experience, is priced fairly, and is efficient with their time and effort. Also every contractor may have a different expertise and you may find yourself with a few at your disposal depending on the project you are working on.
The best method to finding a great contractor is through referrals. If you chose other experienced members for other roles on your team, you may not have to look very far to get a list of contractors your team has worked with in the past.
I can’t stress enough the importance of having a trustworthy and experienced contractor as a part of your real estate team. It often is what separates the novice investors from the highly successful ones.
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