Hi there, 👋 Mo here.

This edition is quite a meaty edition. We are talking about how to create your dream team for investing in real estate.

This is particularly important because real estate is a human business and heavy into relationships.

The core elements of your team fall into 3 different segments. This is focusing on finding and operating your real estate business. Keep in mind, you may need an accountant and a lawyer as well.

• Dealfinder - agent/wholesaler/local investment clubs

• Financing - Banks, equity partners, HML, private financing

• Operations - PM/cleaning company/contractor/inspector

How to Assemble Your Real Estate Dream Team

Why is it important?

Real estate deals demand specialized expertise to identify promising opportunities, accurately evaluate deals, finance purchases, oversee renovations, manage properties, and ultimately sell or rent the assets profitably.

No single investor can possibly master every aspect of the real estate investing process at a high level. Eventually, you will be limited by either time or money.

Real estate is a game that’s best built with scale to grow into a billion dollar behemoth.

Strength in numbers

Remember, generational real estate families originally started as 1-2 people. Then, they acquired more units and were unable to sustain operations with just them and had to expand.

As they expanded, they built family companies and hired people to run their real estate.

In institutional and family firms, you have several core responsibilities:

• Acquisitions and dispositions

• Financing

• Asset management/property operations

The list above heavily influenced this post, which we will dive into

Deal Finding

Your operations team executes the actual real estate deals and includes:

The Real Estate Agent

A knowledgeable local real estate agent is invaluable for finding potential investment properties and can provide:

1. Access to MLS listings and ability to filter for discounted properties

2. Alerts on upcoming listings before they hit the market

3. Information on comparables and sales trends in submarkets

4. Relationships with banks to get foreclosure/pre-foreclosure alerts

5. Connections with other investors and ability to promote your deals

6. Support on submitting competitive offers and negotiating deals

Look for agents highly experienced working with real estate investors. Interview agents about their specific investor resources and expertise with your target asset classes.

The Wholesaler

Wholesalers find undervalued properties and get them under contract before passing along to end-buyers. Partnering with wholesalers can provide:

1. Off-market deal flow that investors can act on rapidly

2. Access to short-sale, foreclosure, estate, and other distressed properties

3. Relationships with motivated sellers in financial duress

4. Ability to tie up discounted properties through assignment contracts

5. Knowledge of emerging high-opportunity neighborhoods and markets

Build a network of trusted wholesalers focused on your niche property types and markets. Nurture relationships by transacting regularly.

Local Investment Groups

Joining a real estate investment club or association connects you with:

1. Fellow investors to partner and exchange information

2. Professionals like lenders, brokers, contractors etc.

3. Ability to promote your deals to other members

4. Off-market opportunities not publicly listed yet

5. Education through panels,speaker events, and deal dissections

Attending meetings and networking consistently is key. Surround yourself with others pursuing similar investing strategies.

Financing Your Deals

Securing funding is essential for real estate investing success. Build relationships with financing professionals that can provide:

Banks and Credit Unions

Partner with banks and credit unions that understand real estate investors and can offer:

1. Investor mortgage programs with lower down payments

2. Ability to obtain pre-approval for quick capital deployment

3. Commercial loans or lines of credit based on business, not personal, finances

4. Potential interest rate discounts by bringing multiple deals

5. Knowledge of your niche whether flips, rentals, commercial etc.

Choose lenders familiar with your target asset classes and niche strategies. Nurture relationships by continually bringing new business.

Hard Money Lenders

Hard money loans from private lenders provide:

1. Access to fast short-term financing for real estate deals

2. Ability to capitalize on time-sensitive opportunities

3. Funding based on asset value rather than credit

4. Flexibility to finance projects banks deem too risky

5. Rapid approvals and ability to fund renovations/repairs upfront

The speed and flexibility of hard money loans offset their higher interest rates. Use to seize deals or begin renovations before securing permanent financing.

Private Financing

Raising private financing from individuals provides:

1. Ability to fund deals without traditional lender criteria

2. Potential for creative structures like debt, equity, joint ventures etc.

3. Opportunity to market deals to private investors seeking high returns

4. Option to piece together funding from multiple sources

5. Chance to build relationships with investors for future funding

Property Operations and Management

To operate rental properties or oversee renovations, partner with experienced operations professionals including:

Property Managers

Working with a property management company is highly recommended for managing single family homes, apartments, or commercial rentals, especially if you own multiple properties. Property managers handle vital tasks like:

1. Advertising vacancies and screening tenants

2. Collecting rent payments

3. Coordinating maintenance and repairs

4. Addressing tenant complaints and requests

5. Ensuring compliance with laws and regulations and evictions

6. Providing updated financial statements and reporting

Property managers take care of day-to-day administrative and operational responsibilities associated with rental properties so you can focus on higher-level strategy.

Look for managers intimately familiar with your specific property types and markets. Interview them about their team, tenant retention tactics, reporting capabilities, responsiveness, and fees. Review online ratings and vet through your network.

This rigorous vetting ensures properties stay occupied, cash flow remains consistent, and legal risks are mitigated. A bad property management company can cost you a lot of $$$ long term.

Cleaning Companies

A dedicated cleaning service keeps your rentals presentable between tenant turnovers. For flips, cleaners remove construction mess and debris to make the space sparkle for listing photos. Specific cleaning tasks include:

1. Dusting, sweeping, mopping all floors and surfaces

2. Scrubbing bathrooms, kitchens, appliances

3. Washing windows, mirrors, doors

4. Removing cobwebs and wipe down walls

5. Cleaning ducts and vents

6. Sanitizing surfaces

Identify a licensed cleaning company that specializes in turning rental properties and real estate listings. Look for reasonable rates and quick scheduling.

By keeping a rotation of available cleaners, you can get a property move-in ready cleaned or a flip deep cleaned in 24 hours for new photos and showings. Fast reliable cleaning improves profitability and higher rents.

General Contractors

Established general contractors are indispensable for overseeing your larger renovation projects on flips or upgraded rental units. Experienced contractors bring:

1. Accurate budgeting and bids based on needed scope of work

2. Efficient permitting and project scheduling

3. Subcontractor recommendations and coordination

4. Oversight of all construction work and inspections

5. Progress updates and communication

6. Knowledge of building codes and standards

7. Warranties on work performed

Check reviews, samples of past work, and references thoroughly before hiring a contractor. Meet to walkthrough properties and discuss expected timelines and costs. Finding the right contractor ensures your larger projects proceed smoothly from start to finish.

You won’t get it right on your first try. Many contractors are job to job and don’t have fully sustainable businesses. You have to “kiss a few frogs before you find prince charming”.

Conclusion

Surrounding yourself with experienced real estate professionals will amplify your investing success and enable tackling larger deals and better deals.

But first, clearly define your niche strategies whether fixing and flipping, buying rentals, or commercial investing.

Then seek out specialists within those niches - not just generalists. Curate your team carefully through referrals, interviews, and reviewing past work. Meet with prospects before committing. Scale your team as your portfolio grows.Don’t be afraid to fire.

Finally, nurture long-term mutually beneficial relationships with team members. Follow through quickly on deals, pay promptly, and send referrals to show appreciation. This retains top talent.

Remember, the scions of real estate all built up family legacies which involved their family members and other teams. You can’t deal it alone.

I hope you’ve enjoyed this article. It’s a bit long and meaty and I appreciate you reading all the way down.

If you’ve read all the way down, respond to this email with “Hey, I’m goated with the sauce” and we can connect on the phone if you’re interested.

Thanks,

Mo