“One of the most important leadership lessons is realizing you’re not the most important or the most intelligent person in the room at all times.” —Mario Batali
If you don’t agree with this statement or even see its value, then I think you will have a VERY hard time being successful in this business of real estate investing. As with every business, a successful real estate business is a team sport. The best teams win the most. And the best leaders surround themselves with smarter people than themselves all the time. It is that simple. (Side note: When I say “smart,” I don’t only mean “book smart.” I mean “street smart” as well.)
I can tell you that we are always working on building the best team possible. It is an evolving process. We have come a long way in 10 years, but there is always room for improvement.
It can seem a little daunting when someone is just starting out; however, forming a great team is incredibly important at any stage of the game, especially early on. Remember, your team will evolve as YOU evolve. Still, you want to start off on the right foot with the right people.
Before you go out and form a team, I would highly encourage you to determine your niche, your market, and your strategy. I don’t care if you get the smartest people in a room and begin working with them; if you are not focused and super clear on your plan and strategy, then NO team member will be able to help you. The more specific you are, the better people will be able to help you achieve your goals.
So here is a list from A to Z of key people you need on your team for optimal success.
20 Must-Have Team Members for Real Estate Investing Newbies
1. Mentor
I know there is a TON of articles and blog posts written about this topic of mentorship. However, I can’t stress this team member enough. I would encourage you to find someone (local if possible) who is where you want to be in 5 years. Once you find this person, find out how you can help them achieve their goals faster. Then and only then will they be happy and willing to help you achieve your goals and mentor you through the process.
2. CPA
This is a very critical person to your team. Obviously, you want to ensure they have real estate investing experience. However, above all else, you want to make sure your CPA is a real estate investor themselves. Our current CPA is an active real estate investor and simply understands the business more than other CPAs we have had who did not own investment property.
Related: How to Hire Amazing Team Members for Every Real Estate Process — From Finding Deals to Renting Them Out
3. Attorney(s)
This is also a BIG one for any new real estate investor. You want to find an attorney who can help with basic real estate knowledge, but who also has the ability to put together partnerships, etc. As a newbie, you want to have an attorney who can help you through real estate closings and will help review all documents, etc. Again, an added bonus is having an attorney who owns investment property as well.
4. Banker
It is always recommended to begin to get your financing together BEFORE you actually need the money. You want to have the relationships and terms established up front before you make any offers. That way, when you begin to run your numbers and analyze deals, you will be able to know if a deal is a good one or one you should pass on based on the terms the bank gives you.
5. Insurance agent
You would think all insurance agents/brokers are the same, but they are not. Some insure investment property, and some do not. Some insure properties you are going to flip, and some do not. You want to find a local, hands-on agent who can help you with your insurance needs. You also want to shop around. There is one insurance company we work with that just insures our single family homes because they give us the best price. There is another insurance company that insures all of our large multifamily purchases. Different insurance company specialize in different areas. Know what you are getting yourself into.
6. Hard Money Lender
Some new investors will rely heavily on a hard money lender when they get started. Other newbies will not go near them. Regardless, you want to have options when you are in the midst of financing your deals. With some deals, having a hard money lender makes sense; with other deals, it does not make sense. Again, it is helpful to find a hard money lender that you are comfortable with, who you trust, and who trusts you—again, BEFORE you find your deal.
7. Private Money Lender or Equity Partner
This might be a tough one for newbies, but it is possible to line up a private money lender or even equity partner early on. The reason it is tough for newbies to get private money is because most private money lenders/equity partners want to see the person they are partnered with have some investing experience under their belt. However, this team member might be possible for you if you position yourself as the feet on the street, with them as the money partner. You both are new to the business but are willing to bring something different and unique to the table.
Related: The 6 Things You NEED to Train Your Real Estate Team Successfully
8. Real Estate Agent
Always a great team member to have aboard. My only suggestion here is make sure that the real estate agent works mostly with investors, not homeowners. As you will see, a homeowner and an investor are completely different customers. I have rarely found a real estate agent who is great at catering to both customers. It is OK if their business is 60/40 or 70/30, but I would steer clear of the agents who can be all things to all people. They will waste your time and send you the wrong property.
9. Wholesaler
As you can see, we are moving into the stage where you are looking for deals. In today’s competitive market, you HAVE to employ various strategies—at least three or four. That way, you are always uncovering deals and getting deals presented to you. Remember, if you work with a wholesaler and decide to drag your feet and not move quickly, they will NOT take you seriously. Wholesalers, agents, etc. want to work with investors who can CLOSE and do not waste their time. I would recommend you work with a few wholesalers who specialize in your market.
10. Birddog
These are people who might have a full-time job but have the type of jobs where they are always out and about and might have the inside scoop for potential opportunities. These are also people who aspire to be real estate investors and are looking to share leads with other investors, typically for a finder’s fee.
11. Title Company
We typically work with the same title company in NJ and the same title company in PA. This builds a long-term relationship with the title companies, and they are more willing to go above and beyond when they know they are going to get repeat business.
12. Well-Connected Business Professional
I know you might be reading this one and think, “What is a well-connected business professional?” These are well-connected business folks who work closely in your markets. These people know everyone in the area and know how to make things happen.
These are great people to have on your team and to begin to form a long-term relationships with. These are folks you want to find ways to help as well. Remember, relationship building is a two-way street. Over the years, some of our best team members were unrelated to real estate investing. These are rain makers, and you want to have a couple of them in your corner.
13. General Contractor
I know this one must be an obvious one, but unless you are a general contractor yourself or have your license, this one will become very important as you look to renovate and rehab properties. We have been through our fair share of GCs over the years; however, I can tell you, you should always, always be looking for GCs.
Contractors come and contractors go. You always want to have GCs that you trust on your team. When you find a great GC, remember to take good care of them. Pay them promptly, be clear with the scope of work, and be super clear on expectations with both money and project timeline. You may want to give them an additional bonus or financial incentive if the project gets done under time and under budget.
14. Plumber
If you own older rentals, you will ALWAYS need a reliable plumber on your team. We have been working with the same plumber for 10 years and trust him with any property! Find a good one, and again, take good care of them.
15. General Handyman
When we started out, this was a challenge for us. It was hard to find a reasonably priced handyman. But they are out there. Find one that can grow with you as you grow your portfolio.
16. Electrician
Another key subcontractor you should have on your team.
17. Pest Control Company
Again, if you have older buildings as rentals, you will need a good pest control company. We have a lot of rentals in Trenton, NJ, which is an urban community with properties very close to one another. Since these types of properties are older, pests tend to be more prevalent. We have a bed bug company, bed bug dog sniffing company, and a regular pest control company—all of which we give repeat business to.
Related: The Quick Guide to Hiring For Entrepreneurs: How to On Board Quality Team Members
18. Cleaning company
You might not need this company for a while, but when you are almost ready to list your rental after the rehab, you will DEFINITELY need this company then! Again, it will be great for you to find a company that you can give repeat business to as you grow your portfolio.
19. Property Manager
You might decide to manage your property/rental yourself, or you might want to outsource it. Either way, it is always helpful to begin interviewing property management companies in your focused trading area. First, you want to know what they charge, what they offer, even their perspective on the local market. You’ll want to learn about your potential competition as well!
20. Accountability Group
Last but not least, you want one of your team members to be a peer (someone who is also looking to invest in real estate) who can be an accountability partner for you. You are going to set a lot of goals, and the last thing you want is to fall short on your goals because you get distracted or lose interest. Find someone who can support you (and someone who you can support) to help stay accountable to goals and strategy. Meet/talk at least monthly. If you want to be ambitious, schedule weekly calls!
I hope this list of 20 essential team members will help get you and your real estate business moving in the right direction. Remember, to build long term relationships with others, you need to help them achieve their goals. The best relationships always have a win/win element.
We’re republishing this article to help out our newer readers.
Good luck on your journey! Anyone essential that I am missing?
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5 Big Advantages REO Properties Offer to Real Estate Investors
Just like there are many ways to peel a potato, there are many ways to find a deal. When some of us start out in the real estate investing game, we learn everything the hard way. I had purchased several investment properties before I learned about REOs, and although I didn’t pay full price, I didn’t buy them with as much of a discount as I would have liked to either. I learned about REOs from my experiences as a real estate agent, facilitating sales of bank owned properties to investors, working directly with the bank on the investor’s behalf. It wasn’t until I purchased my first bank owned property (and many others since) that I discovered the many advantages of buying bank REOs.
First and foremost, the term REO (or Real Estate Owned) usually refers to an asset that a bank or lien holder obtains either through a deed in lieu foreclosure process or at a foreclosure sale. If obtained at foreclosure sale, usually that indicates there either weren’t any bidders or there wasn’t a sufficient bid made that satisfied the bank or lien holder. This is where you, the investor, would come in. But why would you want to buy an REO over other types of properties?
5 Big Advantages REO Properties Offer to Real Estate Investors
Advantage #1: You can see what you’re buying.
As opposed to buying directly at a foreclosure sale, one advantage for an investor buying an REO is that you can get inside the property. Although some properties may be winterized or have utilities switched off (which you may be allowed to turn on or off at your own expense), purchasing a bank owned property allows you to visit the home and see the interior, so you can get a better idea of what you’re bidding on. If you know what to look for, this can prevent you from buying a home with alarming internal repairs, or it could even help you find a distressed property for the best price.
Advantage #2: You’ll usually get a clear title.
The second advantage is that you’ll usually get a clear title since usually all types of liens are extinguished and the taxes are brought current. So, unlike a property purchased at a sheriff sale, which may be wiped of junior liens, REOs are even free of government and municipal liens, as well as HOA (Home Owner Association) liens, giving the REO buyer more marketable title.
Related: 8 Tips for Bidding on and Buying REOs
Advantage #3: You might receive discounted title insurance.
Another plus is that REO buyers may be able to receive discounted title insurance when purchasing bank owned property, especially if they can use the same title company as the REO seller for the new policy. Usually investors will receive a reissue rate, and this discount for reissuing the title insurance could be anywhere from half price to where the bank offers it up for free.
Advantage #4: You’ll likely receive a vacant/cleaned out property.
REO properties are usually priced for a quick sale, so most REOs are vacant and cleaned out. So again, unlike property purchased at a sheriff sale, you won’t have to deal with any unwanted tenants or furniture, junk, etc. left behind by the previous occupant. This makes for an easier transition for buyers who wish to flip, rent, or repair the property.
Advantage #5: Banks may be likely to make concessions.
Typically, REO properties are sold or listed with an REO broker with “as is” pricing to hopefully sell the property within 30 days. Although this may be rare, the longer the REO property is listed on the market, the more likely the bank or lien holder will be willing to make a concession for the buyer. For example, I’ve seen the bank reimburse for some treatments or repairs for things such as termites. I’ve even seen cases where the bank offered financing and terms for the buyer.
Although there are a variety of ways to find these properties, the most common include using the local MLS, talking to an REO listing agent, or simply driving around looking for boarded up houses (and then finding the owners through public records). Whatever the method, new REO buyers should understand that like any type of real estate, there are certainly times to buy and times not to buy. And sometimes purchasing REOs is a much different process for investors who are used to buying retail or at a foreclosure sale.
More Considerations Before Buying REOs
The first thing to understand is that it’s not the investor’s process; it’s the bank’s process. The bank generally prefers to sell to owner-occupants rather than investors, they prefer to deal in cash, and they usually require a larger down payment from investors. The bank is in it to make the most money possible, and it’s not uncommon for them to be slow to respond to bids in hopes of obtaining a better price. They love multiple offers, but it’s important to remember not to get lost in the bidding war.
Besides considering the advantages listed above, before you run out in search of REOs, follow the universal rule for all types of investments: Always run the numbers.
You only want to purchase or make a bid if it makes financial sense. I’ve personally found that REOs can be great deals when, for instance, they’ve been listed on the MLS for a long time, leaving the bank to be more flexible with their pricing. This is because the bank has most likely been sitting on this house for a while, and they’re just waiting for a reasonable offer.
Related: 6 Crucial Considerations for Buying a Real Estate Deal You WON’T Regret
I’ve also found some of my best REOs in areas where properties were selling left and right, the reason being that not many traditional buyers are paying attention to REOs since there are other deals to be had. And lastly, REOs can be great deals on the higher end of the spectrum, usually because they require such a large amount of cash up front that it scares away all of the little investors from trying.
So, what are you waiting for? Now that you know that there’s many a good deal in REOs out there, it’s time to get up and find them!
We’re republishing this article to help out our newer readers.
If I missed any tips or advantages, feel free to chime in and join the discussion on another great way to obtain property.
Leave a comment, and let’s talk!
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If I Started My Real Estate Business Again Today, THIS is What I’d Change
As the saying goes, hindsight is always 20/20. I would modify that to: Hindsight is 20/20 if you learn lessons from your past and implement them into your present and future. It’s one thing to look back and critically assess what you have done, but it’s another step to move past feelings or ideas you perceive. The subjective statement “I did _____ [well/not well]” doesn’t paint the picture, the facts, or the result. Did you start with clearly stated goals in the beginning? Did you hold yourself and your team accountable to those goals? And did you make adjustments based on the data?
This morning, I found myself contemplating the question, “If I started over today, what would I do differently in my business?”
Just to be clear, I am not someone who advocates the “woulda-shoulda-coulda” mindset. But learning from our past and from others requires us to review it, understand it, and then grow and execute from it.
My Biggest Successes & Mistakes Thus Far
Related: The 3 Dumbest Mistakes Buy & Hold Real Estate Investors Make
6 Questions That Could’ve Helped Mitigate My Mistakes
Mentoring & Education
One major thing I would change in my real estate career would be to seek out a mentor early in my business. I could have made so many fewer mistakes in my business and probably saved myself from a lot of pain. I could have set clearer goals earlier and put many things in motion that we have now. I would have read more books and found more opportunities to speak with likeminded people.
This is not to say you need to go to a bunch of guru events or hire an expensive coach. But it does mean you should surround yourself with folks who are doing what you want to do in the future. Learn together, allow each other to make fewer mistakes, and be sure to meet at least every few months. Talk deals, problem solve, and hold each other accountable.
Systems
It’s one thing to know how to paint a wall, price out a house to buy or sell, or rent and manage a cash flow rental house. It’s another thing to have a clear system around construction, acquisitions, rate of returns, and decisions on what you should or shouldn’t be buying. I cringe when I hear new investors say, “I’m not that big. I don’t need systems like you have.”
On one hand, this is true to a point. There are different problems that come up flipping 10 properties a year, as opposed to flipping 40, 80, 50, or 600 a year. But that doesn’t mean that having systems in place is any less important.
In some cases, not having systems with a small business could be even more catastrophic. Say you don’t have clear buying criteria, and you buy a flip that loses money. In our business, we can absorb a loss on one deal because we might have 10-15 others closing that are profitable. It would be much harder for a new investor to do so. Plus, effective systems help you hone in on what works and what doesn’t so you can constantly improve how your business runs.
Related: What I’ve Learned (Good and Bad) From the Various Mentors of My Career
Team Members
This has been a massive, painful learning curve. There is an awesome book called The E Myth: Why Most Businesses Don’t Work and What to Do About It
by Michael Gerber. I you have a real estate business—or really any business, for that matter—you need to read this book.
In the book, Michael talks about that point an entrepreneur can’t do it themselves anymore, so they make their first hire. This is all well and good, except have you created a plan for this hire? Do you have a job description? Is there training to teach them your way of doing things?
One piece I neglected for quite a while was the culture within the organization. Do you understand what you want your business to be? How do you go from just you to a team, a business partner, a full staff with layers within an org chart?
This can be a huge source of constant pain. As business owners, it’s time for us to stop hiring folks without a clear plan. We need a strategy for every step of the hiring and on boarding process before the person is hired. We have to be clear on their goals and our expectations for that new team member. We need to provide them the training, the feedback, the accountability, and the space they need to succeed in that spot.
Leadership
I’ll tell you this. CEO sits behind my name—and it means absolutely nothing (at least by itself).
What we have learned in our organization is that leadership is not given. It’s earned, learned, and taken over time. It comes with experience and clarity on how your business runs.
Only when you’ve completed the following can you truly be an effective leader within your company:
Final Thoughts
If you take away one thing from this post, I hope it’s to reflect on what you are doing in your own business. If you are brand new, what do you want it to look like? If you are on your first few flips, wholesales, or rentals, do you have clarity on basic systems and structure in your business? And if you have a larger organization or are doing 20-30+ deals a year, where are you within the spectrum of the business structure? Do you have clear processes, targets, and a team that understands those goals? Are they held accountable? It’s time we take the next step in our positions as leaders, and use those skills, talents, and dreams to build incredible businesses doing amazing things.
Where are you on your journey of building the business of YOUR dreams? Where are you stuck, learning, growing, or in need of help?
Weigh in below!
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Early Retirement ($10k/Month) by Age 35 with Bryce Stewart
Why work at a lame job until you’re too old to enjoy the life you’ve been given? If you are looking to get out of the rat race earlier, this is one episode you can’t afford to miss. Today on The BiggerPockets Podcast, we sit down with Bryce Stewart, a former school teacher who was able to quit his job at age 35 through the smart purchases of small multifamily properties. Bryce shares his powerful story on how he was able to build a portfolio of 22 units that give him $10,000 per month in income. Bryce also shares a phenomenal concept he called “vacuuming the truck,” which could change the way you think about real estate (and life) forever.
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Rolling the dice on Atlantic City
The Atlantic City-Hammonton, New Jersey Metropolitan Statistical Area boasts a legendary boardwalk and coastline but is now as well known for its bankrupt casinos. And, rather than a growing population with an expanding economy, the region remains on a downward trend, with a projected -2.9% depreciation.
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Building a Lean Business With (Almost) No Capital with Alan Donegan
On this week’s episode of the Biggerpockets Money Podcast, we chat with Alan Donegan.
Alan Donegan watched and helped his father run a super successful sportswear company—until the economy shifted and they lost everything.
Determined to not follow this path, Alan got a job. Then another and another and another. He couldn’t find anything he wanted to do, so he created his own job, teaching people how to create theirs.
Taking lessons from his father’s experiences, Alan teaches entrepreneurs how to start really small and test the idea before jumping in with both feet. If you have an entrepreneurial itch, this is a can’t-miss episode.
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Before and after of the front of N Marston . Talk about a transformation #phill…
Before and after of the front of N Marston . Talk about a transformation #phillyrealestate #flipper #buildinganempire
Progress on Morris . Framing and electric complete #philly #phillyrealestate …
Progress on Morris . Framing and electric complete #philly #phillyrealestate #buildinganempire #flipper
Albert st projects are close to completion #philly #buildinganempire #develop…
Albert st projects are close to completion #philly #buildinganempire #developer #phillyrealestate #19125
Buying a House is NOT For Suckers
Some time back, one of my favorite online financial gurus, Grant Cardone, put out a video that exclaimed, “Buying a house is for suckers!”
Before that, he wrote here on Entrepreneur that, “Unless you have 20 million bucks in the bank, in cash, you have no business buying a house.”
It’s not the first time I’ve heard him say this, nor is he the only financial guru peddling this message today. Author James Altucher has described time and time again how he’s refused to own a house. Remit Sethi, the blogger behind the I Can Teach You to Be Rich brand, often cautions readers to be wary of buying real estate. Even Robert Kiyosaki, author of Rich Dad Poor Dad, has become famous for informing the public that a home is a liability, not an asset.
Related: An Investor Answers: “Should I Buy a House for Myself or Purchase an Investment Property?”
Yet, for the majority of Americans, home ownership is clearly a part of the American Dream. Even a guy like me — a landlord for the past decade — has had to stop and ask if there is any truth to this. Is owning a home truly for suckers, as Cardone said? Or was the headline over his Business Insider video just click bait?
Here, my goal is to explore the the three primary reasons Cardone and other financial gurus typically use for arguing against buying a house — and offer a counter-argument.
1. It depends where you live.
Should you own your home? Maybe. But, maybe not. Real estate is expensive. In fact, that’s one of the primary reasons a lot of homeowners and landlords fail.
Besides the mortgage payment, the owner of the house also has to fix the plumbing, replace the roof, shovel the snow, paint the walls, replace the carpet — you get the idea. There are a lot of hidden expenses above and beyond the cost of the mortgage to consider, and the older the property is, the greater those expenses tend to be.
However, in many areas, it is still cheaper to own than rent. For example, in my town, I can purchase a decent single family home for around $75,000, which works out to a mortgage of around $500 per month, with taxes and insurance included. That same house would rent for about $1,000 per month. So, does the average homeowner of a $75,000 house have $500 in house-related expenses each month? Not unless he or she owns a terrible home.
Therefore, where I live, at least, it makes a lot more financial sense to own versus buy — even with the repairs and maintenance required. Of course, in some areas, it might be far less expensive to rent than to own, while in larger cities such as New York, San Francisco, Miami and other cities,the opposite is often true. All these facts add up to why you shouldn’t take blanket advice from the internet when you make your decisions.
2. Owning a house makes you immobile — or does it?
This was the primary reason Cardone put forward for his argument against buying a house. “To make money today, you need mobility,” he wrote.
Related: Buying a House: The Ultimate Guide to Purchasing Your First Property
Personally, I found that weird — because I’ve lived in the same county for 10 years, and I’ve made money. Lots of it.
So, do you truly need mobility to make money? Sure, mobility is fun. I remember “mobile life.” Living out of a suitcase, sleeping on friends’ couches, eating leftover cold mac ’n cheese I found in the back of the fridge. All hail mobility!
But, then, a funny thing happens: We grow up. We start having responsibility for things in our life. We actually want some kind of stability. We want to raise our kids in the same place. We don’t want to lose the friendships we have with our neighbors. We want to avoid having to move again and again and again because of someone else’s decision.
When you rent a home, yes, you can leave when your lease is up, which might be six or nine months down the road. Or, if you sell your house, you can be out in a month or two. Even better, if you need to move suddenly, you can just rent your house out to a tenant and — gasp — move! Now, you are building wealth through rental properties and you are free to be mobile — whatever that means.
3. Is real estate a bad investment?
Many financial bloggers love to point out that real estate values climb at a pace slower than that of stocks. Okay, that might be true, but it doesn’t tell the whole story.
As famed economist and Nobel prize winner Robert Shiller has pointed out, using the S&P/Case-Shiller Index, home values over the past 100 years have appreciated, on average, at nearly the same rate as inflation: around 3 percent.
So, should we immediately reject buying a house because it doesn’t appreciate fast enough?
Of course not. Real estate appreciation is just one of several benefits to owning property. When you own real estate, you don’t usually pay 100 percent cash for it. Instead, you obtain a loan and use a small down payment to take possession. That way, although the price of your property may increase only 3 percent, your actual return on investment could be significantly higher.
The largest drawback to renting
The bottom line is, should you buy a house? I have no idea; maybe you should, and maybe you shouldn’t.
But, if you base your decision on a financial guru telling you that “buying a house is for suckers,” we need to talk. In his video, Grant Cardone said that, “The best investment you can make is to have choices and freedom.” I couldn’t agree more. And when you choose to rent, you give up a sizable portion of your freedom to live the way you want to live; you hand that freedom over to a landlord like me.
Related: The 7 Vital Steps to Buying a Single Family Rental House
When you own a house, on the other hand, no one is going to come kick you out because he or she has made a decision for the property that doesn’t include you. You won’t be forced to move your kids to another, less desirable, school district. No one will arbitrarily increase your rent because the housing market has improved, decreasing the number of homes and apartments available in your city.
Further, no one is going to refuse you the ability to paint your bedroom the color you want, or to put in gorgeous new hardwood floors. In other words, when you own a house, no one is going to tell you what to do.
But do go ahead. Keep renting. I’ll keep buying rental properties and growing my own wealth. I’ll keep telling you to clean your deck, I’ll continue to deny you permission for your boyfriend to move in.
I may also decide to raise your rent, because I need an extra latte or two this month.
Now, that’s “freedom.”
[This article was originally published on Entrepreneur.com.]
We’re republishing this article to help out our newer readers.
What do YOU think? Is buying a house for suckers?
Let me know your thoughts with a comment!
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20 Must-Have Team Members for Real Estate Investing Newbies
If you don’t agree with this statement or even see its value, then I think you will have a VERY hard time being successful in this business of real estate investing. As with every business, a successful real estate business is a team sport. The best teams win the most. And the best leaders surround themselves with smarter people than themselves all the time. It is that simple. (Side note: When I say “smart,” I don’t only mean “book smart.” I mean “street smart” as well.)
I can tell you that we are always working on building the best team possible. It is an evolving process. We have come a long way in 10 years, but there is always room for improvement.
It can seem a little daunting when someone is just starting out; however, forming a great team is incredibly important at any stage of the game, especially early on. Remember, your team will evolve as YOU evolve. Still, you want to start off on the right foot with the right people.
Before you go out and form a team, I would highly encourage you to determine your niche, your market, and your strategy. I don’t care if you get the smartest people in a room and begin working with them; if you are not focused and super clear on your plan and strategy, then NO team member will be able to help you. The more specific you are, the better people will be able to help you achieve your goals.
So here is a list from A to Z of key people you need on your team for optimal success.
20 Must-Have Team Members for Real Estate Investing Newbies
1. Mentor
I know there is a TON of articles and blog posts written about this topic of mentorship. However, I can’t stress this team member enough. I would encourage you to find someone (local if possible) who is where you want to be in 5 years. Once you find this person, find out how you can help them achieve their goals faster. Then and only then will they be happy and willing to help you achieve your goals and mentor you through the process.
2. CPA
This is a very critical person to your team. Obviously, you want to ensure they have real estate investing experience. However, above all else, you want to make sure your CPA is a real estate investor themselves. Our current CPA is an active real estate investor and simply understands the business more than other CPAs we have had who did not own investment property.
Related: How to Hire Amazing Team Members for Every Real Estate Process — From Finding Deals to Renting Them Out
3. Attorney(s)
This is also a BIG one for any new real estate investor. You want to find an attorney who can help with basic real estate knowledge, but who also has the ability to put together partnerships, etc. As a newbie, you want to have an attorney who can help you through real estate closings and will help review all documents, etc. Again, an added bonus is having an attorney who owns investment property as well.
4. Banker
It is always recommended to begin to get your financing together BEFORE you actually need the money. You want to have the relationships and terms established up front before you make any offers. That way, when you begin to run your numbers and analyze deals, you will be able to know if a deal is a good one or one you should pass on based on the terms the bank gives you.
5. Insurance agent
You would think all insurance agents/brokers are the same, but they are not. Some insure investment property, and some do not. Some insure properties you are going to flip, and some do not. You want to find a local, hands-on agent who can help you with your insurance needs. You also want to shop around. There is one insurance company we work with that just insures our single family homes because they give us the best price. There is another insurance company that insures all of our large multifamily purchases. Different insurance company specialize in different areas. Know what you are getting yourself into.
6. Hard Money Lender
Some new investors will rely heavily on a hard money lender when they get started. Other newbies will not go near them. Regardless, you want to have options when you are in the midst of financing your deals. With some deals, having a hard money lender makes sense; with other deals, it does not make sense. Again, it is helpful to find a hard money lender that you are comfortable with, who you trust, and who trusts you—again, BEFORE you find your deal.
7. Private Money Lender or Equity Partner
This might be a tough one for newbies, but it is possible to line up a private money lender or even equity partner early on. The reason it is tough for newbies to get private money is because most private money lenders/equity partners want to see the person they are partnered with have some investing experience under their belt. However, this team member might be possible for you if you position yourself as the feet on the street, with them as the money partner. You both are new to the business but are willing to bring something different and unique to the table.
Related: The 6 Things You NEED to Train Your Real Estate Team Successfully
8. Real Estate Agent
Always a great team member to have aboard. My only suggestion here is make sure that the real estate agent works mostly with investors, not homeowners. As you will see, a homeowner and an investor are completely different customers. I have rarely found a real estate agent who is great at catering to both customers. It is OK if their business is 60/40 or 70/30, but I would steer clear of the agents who can be all things to all people. They will waste your time and send you the wrong property.
9. Wholesaler
As you can see, we are moving into the stage where you are looking for deals. In today’s competitive market, you HAVE to employ various strategies—at least three or four. That way, you are always uncovering deals and getting deals presented to you. Remember, if you work with a wholesaler and decide to drag your feet and not move quickly, they will NOT take you seriously. Wholesalers, agents, etc. want to work with investors who can CLOSE and do not waste their time. I would recommend you work with a few wholesalers who specialize in your market.
10. Birddog
These are people who might have a full-time job but have the type of jobs where they are always out and about and might have the inside scoop for potential opportunities. These are also people who aspire to be real estate investors and are looking to share leads with other investors, typically for a finder’s fee.
11. Title Company
We typically work with the same title company in NJ and the same title company in PA. This builds a long-term relationship with the title companies, and they are more willing to go above and beyond when they know they are going to get repeat business.
12. Well-Connected Business Professional
I know you might be reading this one and think, “What is a well-connected business professional?” These are well-connected business folks who work closely in your markets. These people know everyone in the area and know how to make things happen.
These are great people to have on your team and to begin to form a long-term relationships with. These are folks you want to find ways to help as well. Remember, relationship building is a two-way street. Over the years, some of our best team members were unrelated to real estate investing. These are rain makers, and you want to have a couple of them in your corner.
13. General Contractor
I know this one must be an obvious one, but unless you are a general contractor yourself or have your license, this one will become very important as you look to renovate and rehab properties. We have been through our fair share of GCs over the years; however, I can tell you, you should always, always be looking for GCs.
Contractors come and contractors go. You always want to have GCs that you trust on your team. When you find a great GC, remember to take good care of them. Pay them promptly, be clear with the scope of work, and be super clear on expectations with both money and project timeline. You may want to give them an additional bonus or financial incentive if the project gets done under time and under budget.
14. Plumber
If you own older rentals, you will ALWAYS need a reliable plumber on your team. We have been working with the same plumber for 10 years and trust him with any property! Find a good one, and again, take good care of them.
15. General Handyman
When we started out, this was a challenge for us. It was hard to find a reasonably priced handyman. But they are out there. Find one that can grow with you as you grow your portfolio.
16. Electrician
Another key subcontractor you should have on your team.
17. Pest Control Company
Again, if you have older buildings as rentals, you will need a good pest control company. We have a lot of rentals in Trenton, NJ, which is an urban community with properties very close to one another. Since these types of properties are older, pests tend to be more prevalent. We have a bed bug company, bed bug dog sniffing company, and a regular pest control company—all of which we give repeat business to.
Related: The Quick Guide to Hiring For Entrepreneurs: How to On Board Quality Team Members
18. Cleaning company
You might not need this company for a while, but when you are almost ready to list your rental after the rehab, you will DEFINITELY need this company then! Again, it will be great for you to find a company that you can give repeat business to as you grow your portfolio.
19. Property Manager
You might decide to manage your property/rental yourself, or you might want to outsource it. Either way, it is always helpful to begin interviewing property management companies in your focused trading area. First, you want to know what they charge, what they offer, even their perspective on the local market. You’ll want to learn about your potential competition as well!
20. Accountability Group
Last but not least, you want one of your team members to be a peer (someone who is also looking to invest in real estate) who can be an accountability partner for you. You are going to set a lot of goals, and the last thing you want is to fall short on your goals because you get distracted or lose interest. Find someone who can support you (and someone who you can support) to help stay accountable to goals and strategy. Meet/talk at least monthly. If you want to be ambitious, schedule weekly calls!
I hope this list of 20 essential team members will help get you and your real estate business moving in the right direction. Remember, to build long term relationships with others, you need to help them achieve their goals. The best relationships always have a win/win element.
We’re republishing this article to help out our newer readers.
Good luck on your journey! Anyone essential that I am missing?
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