Do real estate teams work?
In short, yes they do. There are different types of real estate teams, but generally, a team involves the following:
- Insurance Agent
- Property Manager
These are typically the 10 members of a team. Coming from the perspective of the investor, that leaves 9 contacts that you need to build. I’ll explain why.
9 Contacts to Have for Your Real Estate Team
You aren’t the best agent in your market, are you? Are you the best CPA? Are you the best representative if you get sued?
If you aren’t the best, or even close to the best, why wouldn’t you want a team that would help you perform at a higher standard? The pay?
The reason that real estate teams are so successful is because the members of your team get paid, but they save the investor even more money than they’re getting paid, IF they’re good at their job.
You really need to watch who you hire. Go meet people, gain connections. A bad teammate can screw you over, while a good one can help your dreams go further than you could have ever imagined.
You, the Investor
For most people reading this, you fall under this category. You are looking to buy properties, implement a strategy to make money, and then either hold or sell the property.
This seems rather simple, but it is hard to do it alone. You need connections, which brings us to our first teammate:
A mentor is someone who has already been successful in your local market, and kind of takes you under their wing to teach you. They can act as an accountability partner, to where they ensure that you stay on a path to success in real estate and ensuring you don’t slack.
Your accountability partner doesn’t need to be a mentor, but he needs to have high goals and aspirations and be able to take care of himself in order to hold you accountable.
2. The Agent
A real estate agent does a lot of useful things to help with the buying and selling process, much of which is overlooked.
You need a GREAT real estate agent. Don’t settle. Look for the top agent in your area, and use them. Agents are an amazing resource to have, and this is one of the teammates that you can’t afford to skip out on.
An agent will get you access to properties using systems you’ve never even heard of, they can help you understand the market, give you access to new deals before anyone else hears about them, they can tell you the intrinsic value of a property that you go and look at, as well as find you comparable sales data to see if you are getting a good deal.
How much do they charge? As a buyer, typically nothing. As a seller, typically around 6% of the price.
Here is what to look for in an agent:
- Understands the Investors Mindset
- Well-aware of the Local Market
- Has Investment Experience (Optional)
- Offers One-on-One Support
- Well Connected
- Displays Strong Integrity
Unlike what the mainstream wants you to believe, the banks and lenders are your friend. When hard times come along, they can help you out. When you want to get started in real estate, they can also help you out!
Not all lenders are created equal however. Find what you prefer, make sure it is a reputable source, and check all of the terms. There are 5 primary places to get loans from:
- National Bank
- Community Bank or Credit Union
- Mortgage Broker
- Mortgage Company
- Private Lender
It is important to build a relationship with whoever you think is the right candidate to be your primary lender. You may have to use more than one lender, probably will, but make sure you build a relationship. The better they know and trust you, the more likely they are to give you better financing and lighter terms.
One of the main problems in real estate investing is finding good contractors to work on your rental properties or flipping projects. They either show up late, don’t show up at all, claim they’re busy, say they don’t know how to do it, or claim to know what they’re doing and screw it up anyways.
Ever wonder why finding a good contractor is a hard job to do?
- Contractors are typically not good business owners, and are better at swinging the hammer than keeping up with appointments.
- Real estate investors have a tendency of calling up the cheaper guys, because we think it’ll be a better deal. Start comparing cost, instead of price.
Tips to finding a good contractor:
- Be Proactive
- Understand Cost>Price
- Ask for Referrals
- Check References
- Ask Employees
- Be CLEAR
If you find a great contractor, KEEP THEM. Great contractors are an amazing tool to have.
Bookkeepers are great for keeping track of, well, books. All the paperwork, documents, taxes, everything. Bookkeepers are professional organizers.
If you don’t mind the extra grunt work and you’re confident in your organizing ability, don’t get one. But at some point depending on how large you grow, you will need one at one point.
The CPA is in-line with the agent in the fact that they are vital to your real estate success.
The CPA has spent years learning the tax codes and how accounting works, and a great CPA will save you far more than you would ever pay them. For some things, you have to pay for quality, and a CPA is one of those things.
Don’t skimp out, get a great CPA.
“When you invest in real estate, it’s not a matter of ‘if’ you get sued, it’s a matter of ‘when’.” -BiggerPockets
You’re probably going to be sued at one point or another, whether it’s your fault or not. It is far better to have a lawyer on your side that you chose, rather than having one appointed for you.
Lawyers are very expensive, but you’ll rarely ever use them, and rarely ever for long. But when you need them, they’re very handy to have. They can save you from losing everything in desperate times.
8. Insurance Agent
Insurance is another thing you can’t skimp out on. If you always chase the lowest rates, you will typically get low results. Look for good deals from good, quality companies at good, quality protection.
There are multiple reasons. 1. So you are better protected 2. So there is less hassle and confusion, and 3. You can find great coverage using brokers.
Going from point 3, you can use an insurance agent, who will actively find the best rates for the coverage for you, and consistently switch policies to best benefit you without screwing things up. IF, you have a good insurance agent.
9. Property Manager
Property managers are vital if you aren’t working as an investor full-time and have more than a few properties. They make life much easier, and much more efficient, IF you find a good property manager.
Once you decide to get property management, a great property manager is one of the most important things on this list, right up there with a CPA. Take a quote from Brandon Turner,
“A great property manager can mean the difference between success and failure for your investments.”
Property managers do the following, and more:
- Pay Bills
- Stay in Communication about Problems
- Manage the Problems
- Supply the Owner with a Year-End Summary
- Prepare Monthly Reports Concerning the Property
- Accept Maintenance Phone Calls
- Schedule Needed Appointments
- Screen Tenants
- Hand out and Accept Applications
- Show Units to Prospects
- Advertise Vacancies
Property managers do a lot. And a bad property management team can leave you stranded on the side of the road without a property to go back to. It is vital that you find a good property manager that aligns with your goals and knows what you want from your property.
Do Real Estate Teams Work? | 9 Contacts to Have for Your Real Estate Team
By now, you should know the answer to your question, “do real estate teams work?” and now you know the 9 contacts that I (and Brandon Turner) think you should have for your real estate team.
The foundation and information for this article all came from what is widely considered the greatest real estate investing book on the market, The Book on Rental Property Investing (creative, right?).
The book was written by Brandon Turner, VP of Growth for BiggerPockets, the largest real estate investing community in the United States, and continues to grow by the day.
Turner provides the reader with an easy, smooth, and yet informational read from start to finish for investors of any level: Beginner, intermediate, or advanced.