3 Simple Steps to Building Your House Flipping “Power Team”
For most people flipping houses is not a solitary venture. My house flipping power team consists of contractors, lenders, a secretary and even a couple wacky website guys.
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Actually just about everyone on my team is a little wacky, which might be why we work so well together. Whatever the reason I would be pretty lost without them.
I’m really fortunate to be surrounded by such great people. Yet I will admit that my network did not come together overnight. It took some time for us all to find one another, mesh and learn to work together.
There were some bumps along the way.
In this post I would like to share how you can build your own house flipping power team. My strategies, which are actually more like observations, are just based on my personal experience.
However I think many veteran investors here on BP would probably agree with the below pointers.
How to Find Power Team Members | Network and Do Most of the Listening
Real estate networking events can be a power team building gold mine. So can other events and places like BNI, Chambers of Commerce, grocery stores and virtually anywhere people gather.
To get the most impact from your networking efforts, be sure to focus more on listening instead of speaking. Spending more time listening than talking is important because:
- You will learn more about the people around you, and how they could help your business
- People will like you for listening to what they have to say
- You can eat more shrimp and cheese & crackers without worrying about having to talk
I met my electrician and one of my general contractors at a weekly BNI networking event I attend every Friday. I listened to them talk about their kids, dogs, hobbies and business every Friday, week in and week out.
We essentially became friends and wouldn't you know a few months later I needed an electrician to help me with a new and challenging project. Not long after I needed a trustworthy general contractor to manage an entire rehab.
You could meet your power team members anywhere and at any time. Just be sure to listen, because if you do all the talking you may never know how potentially valuable that person could be to your business.
How to Make Money Together | Communicate and Communicate Clearly
In some ways flipping a house from start to finish could be considered an art. There are many moving pieces to the puzzle, that all have to fit together in order to turn a profit. The price you paid for the house, rehab costs and the after repair value all have to make sense.
The way you communicate with your house flipping team has to make sense too. If you do not communicate clearly with your team, money will seep out of the project and your profit will diminish.
Here are several consequences of poor communication among a team:
- Missed deadlines in the rehab process
- Last second fixes
- Angry sub-contractors
- Frustrated general contractors
- I could go on…
The above consequences eat up your profit margin because they slow down the project. Time is most certainly money when flipping a house. A difference of just a few days can cost big, especially if your holding costs are high.
I always sit down with my general contractor and sub-contractors before the rehab begins, and I give them the inside scoop on the project. I show them my budget for the project, and explain exactly what I need them to do.
We go through the process together, and once we are all on the same page I have them sign a document stating they understand their role and commitment.
This holds everyone accountable for doing their part, including myself. People know and understand their roles, and they agree with a signature to perform them.
Clear communication keeps my team on the same page and helps us all make more money.
How to Build Wealth Together | Grow as Individuals and as a Team
People and situations change. Try as we may, it is impossible to prevent things from changing.
However, we do have 100% control over how we choose to deal with change.
A few years ago I was working with a sub-contractor. Our working relationship was going very well. I provided him with steady work at a fair price. In return he was always on schedule, remained at or under budget and demonstrated superb craftsmanship.
I was pretty surprised when he told me, out of the blue, that he could no longer work with me. He had found a more lucrative career opportunity and his life was changing at the speed of light.
Instead of getting upset I wished him well and simply went about finding another sub-contractor.
3 years later the same guy who picked up and left on a whim is referring me deals left and right. Turns out he spends a lot of time on the road for his new job, and he is always noticing abandoned homes which could be a potential deal for us.
The fact of the matter is that team members come and go, but they also go and then come back again later.
I think being OK with change and choosing to deal with change in a positive manner is the key to building long term wealth together with your team.
Each person on your team has their own life path and together you can all help one another achieve their goals and dreams.
If you’ve made it his far, please leave a comment below! How have YOU built your real estate investing team?
Please leave a comment below and let me know what you think!
Photo: Corey Bond