Five Critical Building Blocks to Creating a “Dream Team”
Hi Everyone – Matt’s wife – Liz here. I am going to be a guest contributor to Matt’s blog from time to time! I am going to write on various real estate topics as well as business strategy.
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For over a decade, I helped leaders from many different industries build and retain high performing teams. I enjoyed this work very much and continue to apply many of the lessons and principles in growing our real estate investment company.
Brian Tracy said it best: “Teamwork is so important that it is virtually impossible for you to reach the heights of your capabilities or make the money that you want without becoming very good at it.”
Most would agree that building a high performing team in any business and in any industry is critical to success. However, some beginner real estate investors spend more time looking for a deal than finding the right team members to make the deal happen.
Why you might ask? Not sure. I think most people do not know what this really entails. And just like most of us, if you don’t know what something entails, you may ignore or disregard it. Or most don’t really think it is going to make much of a “financial impact” one way or the other.
I can assure you that we have made many mistakes when building and maintaining a strong team over the years. I can also assure you that it has cost us a lot of money, I mean A LOT of money, money that we could be using to buy more deals!! That is why this topic is so important!!
Although some investors know they need a team, they don’t always utilize and leverage other people’s talents and build a well balanced team. Many get in the business and “do it all themselves.” That is the fastest way you will run out of time.
Regardless of who you have join your team – possibly a wholesaler, realtor, lender (banker), attorney, mentor, private money lenders, handyman, etc. – I am going to share five areas you want to keep in mind when building and maintaining a great team in real estate.
1. Diversity of Skills & Experience
It is critical to find partners and the right team members that compliment your skills.
Are you skilled with your hands? Are you someone that is skillful in the art of engaging people? Do you have soft or technical skills? Are you really good with numbers and crunching numbers quickly? Some of the skills you have worked so hard to acquire over the years could be transferable skills to real estate.
Have you had to negotiate, mediate or manage other people? These are all skills that can be very useful in the world of real estate investing. The key is to take an inventory of your skills and then determine other skills that are needed to be successful in the real estate niche you are moving into.
The skills you might need to be a successful landlord are different than the skills you need to be a successful wholesaler. After you determine the skills you need in your chosen niche, then keep an eye out for people who have these skills to complement you.
Additionally, one way to meet the need of “diversity of skills and experience” on your team is to find a mentor. Why are mentors so great for beginners and seasoned investors? Because they have the experience and background that you may lack.
Find people that are successful in the niche you want to be in, and then find a way to spend more time with them. When you connect with a mentor, remember to come from a space of “how can I help” vs. “teach me everything you know for nothing in return.”
Successful investors want to help but they don’t like people who “take” and don’t give. Everyone has something to give – including you. Just come from a space of “how can I help” and most successful investors will want to help you.
2. Diversity of Personality
This is an important one that most new investors who are putting a team together often neglect.
You can have an effective team with a diversity of skill and experience, however, the key is to have a diverse team when it comes to personality styles as well. Just like you would not have a basketball team of all “take charge” players, you would not want to surround yourself with team members just like you (from a personality perspective).
Most successful partnerships and/or teams don’t always know “why” they are so successful. Give me any team that is successful and I would bet some serious cash that they have complementary personality traits vs all having the same personality!
There are three areas of an individual’s personality that should be balanced on a team:
It is important to balance “task” and “people.” For example, if you are more of an extrovert who likes people and is very expressive, you might want to have a more analytical and technical type of person on your team. Extroverts tend to over trust people and introverts tend to under trust people. Both are critical to team success.
It is also very important to have a balance of risk taking and cautiousness on a team. If you are a cautious person, it would be helpful to have someone on your team that is more risk taking, daring and assertive.
On the other hand, if you are a risk taker and a “fly by the seat of your pants” kind of person, it is important to have a more detailed and cautious person on your team. When my husband and I started out, he was more of the risk taker and “fly by the seat of your pants” kind of person.
I was (and still am) more cautious and detail oriented than him. Although we get frustrated with each other from time to time because of this difference, most of the time we use it to our advantage.
It is also important on a team to balance decision making.
In other words, you might make decisions based on “emotion and gut feel,” however; it is great to have someone to bounce the idea off of who makes decisions based on fact and logic.
Both decision making styles are effective – just different. Sometimes the “gut” is the way to go on a particular decision and sometimes “logic and fact” is the way to go. By having a complementary team from a decision making perspective, it will help get deals done quicker and help you as the investor cover all bases.
As I mentioned earlier in this post, one major mistake many investors make when building a team is that they bring people on their team who are just like them.
I think this is a mistake – both short and long term – since your best partnerships typically have some diversity in their styles. For example, early on in our investing, my husband, Matt, met a guy who he was impressed by and he decided to partner with on a large commercial deal.
I met this guy as they began working together and I was also impressed. He had a lot of experience and skill in the commercial field. However, the more I got to know him and spent time with him, his personality traits resembled my husband’s traits (like a mirror!!).
Both of them were more people oriented, talkative, and optimistic type of people. They also were more “we will figure it out when we come to it” type of people. I warned Matt that there could be some challenges with this partnership and I did not think the deal / working together was going to work out.
As most husbands/wives can guess what happened next, my husband did not listen to me!! He decided to partner with this guy and in three months the deal ended up falling through and we ended up parting ways with this guy. In hindsight, we were both glad that this happened since it allowed us to learn a great lesson.
3. Strong Communication
This is an obvious one but important one.
When you begin to build a team, something to keep in mind is that you have a different communication style than other people. Remember the “golden rule?” Well, I would suggest when communicating with others employ the “platinum rule” which is “treat others as THEY want to be treated.”
Just begin to watch the people you are forming into a team. Some people want a TON of communication when workings on a deal; some do not want any until the deal is refinanced, construction is done, etc. The fastest and most effective way to determine a team member’s communication style is to simply ask them upfront and before the deal begins. It is critical to be up front with your team members.
You are the investor, the orchestrator of the deal, and it is your job to align the team and determine what people need in order for you (and everyone else) to be successful.
When we began to work with one of our first private money partners, one of the questions we had asked him early on was – how often do you want to stay in contact? We also asked them – “what type of communication do you prefer to receive?”
We did our first buy/hold with him about four years ago, and to this day, my husband still has the same open, ongoing communication with him. Most importantly, we are communicating with our investor to meet his needs!.
4. Incorporate Feedback
As you are working with your team and making a deal happen together, don’t forget to gather feedback along the way and especially when you are done with a deal.
Eliciting feedback is one of the most important and hardest activities you can do as an investor. Sometimes the feedback is “hard to hear” and very negative.
Many people take feedback personally and then end up shutting down. However, to be a successful investor, you have to really receive the feedback whether it is about a project, a deal, people on your team, or whatever, and assess the feedback, reflect on it, and then determine if action (or course correction) is needed.
Something we are incorporating in our “rehab” side of the business, is after each project, to schedule a debrief process with our construction foreman.
We need to assess what went well and what can be improved for the next time. Previously, we have discussed with our team ways we will make the next deal better. However, incorporating more of a “formal” debrief process will create the habit and regular practice of ensuring we are “continuously improving.”
5. Alignment of Values
I know I have been talking a lot about “diversity” of many areas when building a high performing team.
However, there is one area where diversity is not important and where you want similarity!! And that is sharing the same values. I left this one last because it is probably the MOST important area to keep in mind when building, managing and maintaining a high performing team.
For example, you might value the importance of quality work. However, the handyman you hire on your team does not value quality as much as he values “getting it done.” This difference in values and priorities can impact a team and can ultimately break teams and partnerships up.
I can recall early on we were working with a great guy who was partnered with us on a raw land development deal. The deal was moving along and we were continually impressed by him. My husband talked to me about bringing this guy in as a partner for ALL of our real estate projects.
As we assessed whether this would be a good move or not, everything pointed to a YES except for “entrepreneurial” values. Our partner valued security and predictable income more than we did. If you are going to partner with someone both of you need to be completely aligned with how you view money and view earning money. Some are fine with “delayed gratification” and some are not.
When you are building your team and partnerships, make sure you are absolutely crystal clear with what they value – whether it is your handyman or a private money lender. There is no right and wrong here – you just want to be clear and aligned.
Hope these suggestions help as you form, maintain and build a high performing real estate team. Until next time!
What are some things you look for in team?
Be sure to leave your comments below!