Developing a real estate investing team may be the most important key to the success of your investment. Henry Ford was famous for saying he did not know all the answers, but knew where to find them. An investment team is no different. You don’t have to know all the real estate answers, just know where to find them. A great investment team will even think of questions you never knew to ask!
Some basic team members come to mind when getting started…
- Attorney – While there are many different types of attorneys that practice in the real estate investment fields, two in particular come to mind. First is your general closing attorney. He/she should be well versed in understanding titles, protecting you from fraudulent transactions, and good at getting paperwork filed in a timely manner. They should also offer a number of other perks including reviewing documents, drafting documents, and available for questions for no fee or a tremendously discounted fee.
The second type of attorney is one that focuses on landlord/tenant law. This attorney will handle evictions, collections, application and lease drafting, and a number of other claims that may arise out of the management of property. They should be readily available for questions and to give advice. Hopefully the more you talk to him or her upfront, the less you will see them later.
- CPA (Certified Public Accountant) – Once you begin to create income, it is important you solicit the help of a professional that understands both Federal and State income taxes and particularly understands them as they pertain to real estate. Because our business is ever evolving, this person should stay current on issues and advantages that you can capitalize on as your business grows. Much like an attorney, it is never best to search for the cheapest. A good accountant should save you more in the long run than the fees they charge you.
- Mentor – It is always cheaper to learn from the mistakes of others than to make them yourself. A good mentor should be one with “fruit on the tree” knowledge of the local real estate business. He or she may also be interested in partnering with you as they are always looking for new talent to leverage other people’s energy. No matter what, they should be interested in your success.
While there are a number of other people that you can add your team, including real estate agents, real estate professionals, and property management companies, I would consider the above three essential to beginning the process. As you search out people to fill these roles it is important that they model some key attributes for a successful relationship.
- They should possess similar values. What good does a team member do you if you aren’t working from the same set of values? Never work with someone you can’t trust to do the right thing no matter the circumstance. Remember, there is no such thing as “business ethics”, only ethics. People with a set value system consistently make better decisions.
- Avoid yes-men. Your team should not agree with you all the time. This sounds like I’m saying the opposite of what I said before. However, if a team member agrees with you all the time, then one of you is useless. If you disagree all the time, then both of you are useless! Find someone that challenges your current investment thinking. Great team members will complement each other’s skills.
- It should be a win-win relationship. John Maxwell, leadership expert and author, says that if the other person is getting the best of the relationship you need to figure out a way to give more to that relationship. If you feel that you are getting the raw end of the relationship deal, you need to dissolve the relationship. It is essential for both parties to “profit” from any successful relationship.
Developing an investment team is essential to your success. “Self-made” is a cliché term that truly successful people know is a fallacy. While you will never be able to eliminate the learning curve in any business, you can speed it up significantly if you put the right people in the right positions on your team. Teamwork makes the dream work!