Real Estate Investing – Building Your Team
The story goes that legendary football coach Vince Lombardi once opened a team meeting by saying, “Okay, guys, let’s get back to basics.” Holding a soccer ball, he began the lesson for the day: “This is a soccer ball.”
After a brief pause, one of the players raised his hand. “Coach… you’re moving a little too fast for me.”
Whether or not this story is true illustrates an important point. Even the best must start with the basics, and nothing is more fundamental to your real estate investment business than building a team of competent professionals you can trust. With that in mind, let’s outline the steps necessary to put together a quality team.
Take a personal inventory
First of all, you need to decide what skills you possess, or more importantly, what skills whose possess. For example, if you’re a licensed real estate agent or certified public accountant, you probably don’t need to find a real estate agent or accountant to work with you. Likewise, an experienced general contractor won’t need to find another GC for her team.
Start by taking inventory of what you’re good at, what you can handle in a pinch, and what you know you just can’t or won’t do. Write your list. Now, think about the types of people available to help you with the areas where you are weak. Here is a list of the various types of professionals I have used over the years.
Realtor, attorney, bookkeeper, accountant, general contractor, specialty subcontractor (roofer, plumber, electrician, HVAC, landscaper, etc.), handyman, home engineer or inspector, banker, mortgage broker or lender , private lender, -money lender, wholesaler, insurance agent, and commercial real estate broker.
While this is not meant to be an exhaustive list, and there may be others you need to rely on from time to time, this list should give you a pretty good idea of what types of professionals you need to look for. Chances are you’re not good at all of these things, so it’s safe to say you’ll need to seek out at least a few of these people.
Trust the experiences of others
Building a team isn’t something you’ll do once in a week or two. It will take time and perseverance, but it is not as difficult as it seems. You can accomplish a lot by asking for referrals from people you already know and trust.
Ask everyone you know about the people they do business with and keep a written notebook of the referrals you receive. I call them “warm contacts” and they are much more helpful than getting names from business cards or advertisements. Pay special attention to the names you get from other real estate investors. If your city has a Real Estate Investor’s Club and you’re not a member yet, join today! This will be a rich source of contacts as well as information about the local market. You can’t afford not to be a member.
Once you have the name of a professional, an accountant for example, you will want to meet and interview that person. Call them to make an appointment and mention the name of the person who referred you. You can even invite them to lunch. Wherever you meet, it’s important to have a plan and know what you want to ask them in advance. Get to know them and give them plenty of opportunities to talk about themselves and their method of doing business.
Of course, do not grill them or give them the third degree. You’ll discover everything you need to know simply by conversing with them and creatively weaving your important questions into the natural flow of the discussion. Write down the answers you find interesting and refer to them later when you’re deciding whether or not to hire the person. Remember to thank them for their time.
You are the judge and the jury
What criteria are you looking for? That depends on a few factors.
First, do you like the person? Life is too short and there are too many other options to waste your time with someone you don’t want to be with.
Second, are they professionals? Do they approach their business and yours with a serious attitude? Will they treat your time and money almost as if it were their own? Do you get the feeling that they take their profession seriously? Do they treat their business like a business and not a hobby? By the way, do your?
Finally, do they have the experience, skill and knowledge you are looking for? The person who referred you can help you answer that, but be sure to ask for additional references and contact any references they provide. Ask lots of questions and make sure they are fully capable of meeting your expectations.
Hire them well and enjoy the ride
When you hire someone, whether it’s a general contractor or a home inspector, be sure to clearly define the scope of the relationship up front, preferably in writing. Never enter into a business agreement that involves the exchange of value (money or time) without a clear written agreement. This will save you all kinds of pain and discomfort later. the question is not either someone will let you down, but when.
Just because you decide to put someone on your team today, doesn’t mean they’ll stay there forever. My team has evolved over time, and so has yours. As you work with people, you’ll notice things about them that you didn’t see during the search process. Your methods may change over time and your needs will change as well. Don’t be afraid to end a partnership; after all, it is a business relationship, not a marriage. Just make sure you keep all of your commitments.
Finally, enjoy the search process and keep your eyes and ears open at all times. This can be the most exciting period of your life as an investor, and you never know when you will meet someone who would be a good fit for your team. I have found some of my most trusted advisors and professionals when I wasn’t looking and when I least expected to find them. Many of them have subsequently become good friends.
Now, make more offers!