Anyone who has been in the real estate business for any time will tell you that the more people you have that can help you, the better. Investing in single family or multi-unit housing is not an individual task, however you can do it by yourself. You just have to surround yourself with good business relationships. The more quality, professional people you can gather to help you will ensure that your success rate will skyrocket.
One of the most important aspects of being in real estate is that you must have a plan, or for most people, a system. My plan has always been that I am a rehabber. I buy homes, condo’s or multi-unit structures to remodel and then rent or sell them. Because of my general contractor background, I was able to excel not only in the investment side, but also the teaching side of real estate. My strategy these days is that my focus is buying REO properties. Here are the relationships that fuel my business to a great level of success.
Have A Mentor & Coach
One of the most important people in your business should be a mentor. This can be anyone you want. They don’t have to be a pro or someone that charges you a fee for advice. This could be as simple as your father, a brother, sister, uncle or whatever. As long as you respect the thoughts and actions as well as the opinions of this person and are willing to perform in the same manner as this person, then they can help you make your way through your career.
Another important relationship would be a personal coach. A coach is someone that holds you accountable for your actions. They can give you advice as well as instruction. They can motivate you or back you down if needed. When I am coaching someone, we come up with short term goals, long term goals and strive to meet these a little bit at a time. A coach is someone that you have to report your progress to, and prove to them that you are capable of reaching the goals you have set for yourself and your future.
A Reliable Broker
My favorite person that I have on my wealth team is my broker. She is just the best. This broker has contacts with several banks and for these banks she is the BPO. For those who do not know a BPO is a broker’s price opinion. This is the amount of money that the broker recommends that the bank sell the house for in the current market. Also as a broker, the banks will provide a list of properties in their inventory that they are going to sell in a certain time frame and she is to list and show these properties until they sell. What you want to do is create a relationship with one of these type brokers and get on their “buyers list.” This is a list of investors that the broker reveals the property addresses and selling info in order for us to make offers on these deals. Make sure that your broker is also an investor for best results.
A Dependable Real Estate Agent
The next person you need to have is a real estate agent. This person is a different asset to you than the broker. The agent is more for valuable info on the properties and the broker is more for getting you the properties to buy. You agent can make offers for you or list your homes to get you buyers. Your agent can run a “comparable market analysis” (cma) on your property that tells you how much a like property would sell for. It will also tell you about how many days it would take to sell, and they may have some insight on what areas you would want to buy and sell in.
All of us need to have a great attorney. Mine is, and yours should be a real estate lawyer and hopefully an investor too. This way they would be well versed on if you are allowed to do double closings, subject to deals and the foreclosure laws as well as other things that would be pertinent to your city and state. They can assist you in closings as well as prepare your warranty deeds. Quit claim deeds, deeds of trusts, deed in leau of foreclosure as well as other related terms. A good attorney is worth his or her weight in gold, and sometimes the fees seem as if they are.
I have created many relationships with bird dogs. A bird dog is someone who finds deals for you to buy. Normally they do this for a finder’s fee or a piece of the profit. My bird dogs are more often than not, trained by me personally. However most of them have obtained some sort of formal training prior to becoming a bird dog. In many conversations I have had with investors over the years the average fee paid to a bird dog is about $500 for finding a suitable deal. I am not talking mansions here, I am talking bread and butter easy deals with a modest amount of profit. Obviously the more expensive the home and higher profit, the more money you pay for your fee. So if you have cash but no time to hunt for deals, then a bird dog is a nice alternative to not getting deals at all.
I have a wonderful accountant. She happens to be my wife, Barb. Having a great accountant really helps in this business. She keeps me up to speed on what needs to be paid and when. She knows how much is coming in and when. I have available to me the budgets we have to invest with and I know in advance what kind of deals we can buy or fund. She works directly with my tax pro at tax time. Together they work out my land trusts and llc”s. It’s like having a cpa staff at your beckon call for all your money matters, tax wise or other.
If you can, try and make your relationship with your banker like I have. I can call my banker on the phone and have things done that most people spend hours waiting to be done. One reason is simply this. One of my banks is a credit union. They usually are easier to work with than normal banks and the rates are normally lower too. I have found that loans (in my experience) are much easier to get. Here is what I love about my banker. If I need 10K in certified funds to buy a property, I can call on the phone and tell her what I need and by time I get to the bank, she has the check ready and waiting for me. Another thing that I love about being in tight with my banker is that I can call in a loan. If I want a loan I can call her and tell her the amount I need and what I need it for. She gets the ball rolling and has me pre-approved so that when I get to the bank, my loan has already been processed and I sign a few documents and within minutes have my check. Keep in mind that I have been banking here for years, so make good friends with the top person at your bank and make sure to talk face to face with that person as if they were your best friend every time you go in. sooner than you think, you will be known by the employees of that bank. Also if I deposit a large check, most banks put a 10 day hold on it. My banker waves this hold because they see me in the bank all the time. This could work for you too.
My wife has a great relationship with our financial advisors. Yes we have more than one. One of them came from my side of the family, as my dad had been using this person for years. I followed my dad’s advice to use this guy for our personal stock and bond investments. The other person is out of state and comes from my wife’s side. He has expertise in real estate holding, stocks, bonds, muni”s as well as many other investments that I was not familiar with. Through his type of investing, Barb and I have obtained substantial wealth that without the ideas of this man we never would have gotten involved. I had no interest or knowledge in the investments he has made on our behalf. Now I am a big fan and really hope that all of you will take advantage of a financial advisor.
Contactors & More
I could go on and on about who is important and who is not, but I will summarize by saying this. Obviously I want you to have good contractors. Call material suppliers such as paint stores and drywall supply houses for recommendations of contractors. A good landscaper can change a houses appearance for very little money. A hard money lender who has reasonable rates is a must for real estate investors. Make sure to include an appraiser and a mortgage company in your strategy. And last, make sure and join your local investment club. Once you join, you have access to all of the people above and more. You have people who want to buy property and people who want to sell. You have access to partners, lenders, agents and many other real estate related opportunities. Normally the cost is very inexpensive, but the potential of being in a room full of like-minded people and using the assets available to you is beyond helpful it’s downright successful. For more info from Mr. Rehab visit www.PeteYoungs.com