Investing in real estate has wonderful long term benefits, however, there are many unique challenges and plenty of obstacles to success. Finding and negotiating the right deal, getting financed, getting the right people to help you with improvement projects, and finding and managing tenants (just to name a few) can be daunting. Successful investors know they don’t need have all the answers and understand the benefits of having a great team to support them.
I’ve spent years building relationships with the folks, that can help me seize opportunities and capitalize on them. In fact, it’s an ongoing process. I’m always looking to add new players and expand my network for myself and for my clients. Here’s my list of team members I consider vital to the success of any property investor along with a brief description of what to look for.
An Experienced Investment Property Broker. Not just any broker will do. Develop relationships with brokers that have experience with the type of property you are buying/selling and have a network and pipeline to potentially bring you off market opportunities. Experienced brokers that specialize in multi-family, for example, will know property values and how to calculate the expected return on investment. They will know the maintenance and management headaches that may arise and can provide advise on how to account for that. They will know other property owners and may be able to present deals before they hit the market. These brokers have a keen eye for such opportunities based on experience – experience most people don’t have, especially when first entering the broad world of real estate investing.
A Great Lender. Developing a good relationship with the right lender or lenders will make or break opportunities. It’s all about getting the financing needed when it’s needed it, and being able to actually close on deals. The world of real estate is pretty close knit. Brokers and others on your team will stop working with you if you try on too many deals but never close. People want to associate with people that can also help them succeed. Not all lenders offer the same types of loans so find the right one for the type of deals you invest in. Fix and flippers need a good hard money lender that can help them pay cash and close quickly. Small multi-family investors need a lender that holds their own loans and will offer competitive 5 an 7yr adjustable rate mortgages. Developers and rehabbers need short term interest only construction loans. Do your homework to find the right lender for you and then go deep with the relationship so you can build trust and they can qualify you quickly when needed.
A Reliable Rehab Manager. Most good real estate opportunities will need some level of rehab and having a skilled person in the role of managing rehab projects is a big asset. I self-managed many of my early rehab projects because I didn’t trust anyone else to do it. I’m very detail oriented and grew up working in and around properties. However, I have since learned that my time is better spent on higher level income generating opportunities (i.e. finding the next opportunity) than spending a bunch of time herding subcontractors or doing work myself. Just because I can do it doesn’t mean I should. I have since found a wonderful contractor that does great work and is reliable and fast. Because he has great connections to tradesman and subcontractors at great prices, I find that I really don’t end up paying that much more for him to manage my rehabs. You may need to work hard to find this person but it’s worth it when you do. Not all are created equal. They should be skilled in working with a timeline and budget in order to meet your goals, or they will be a liability instead of an asset.
An Aggressive Property Manager. Property management is a hard and thankless job but critical to your success. I managed many of my own properties for years so I know how hard it can be. For this reason it’s difficult to find a great property manager. Most do an adequate job but not a great job. I’ve learned that the most important trait to look for in a property manager is one that isn’t afraid seek the highest rents on unit turnovers and keeps existing rents in line with the market. The higher the rent the better the quality of tenant and the more money you’ll have to keep your units nice. It’s important to stay on this positive cycle. No matter who you use you will still need to be involved. I call this managing the manager which I will save for another article.
It’s important to remember that real estate investing, like other forms of investment, is risky – there can be great gains, but also loss. Having a knowledgeable and experienced support team is critical to your ongoing success.
Brad Uhlig is a Broker/Owner with West Peak Properties, a full-service brokerage company specializing in investment properties in the Denver Metro area. The brokers at West Peak Properties have over 40 years of combined experience with 100’s of transactions closed. Their mission is to help investors build their portfolio, exchange and sell when the time is right, and live a better life through the financial freedom real estate investing allows. Contact Them Today!