Do This BEFORE You Start Investing in Real Estate
I’ve said this so many times before: your network equals your net worth. Please never forget that!
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Over the last five-plus years, I’ve spoken to many investors from all over the world. They ask me the same thing: “What do you think of this area? What do you think of this market? What do you think of this city?”
They’re all consumed with the online stats and demographics that they can see via a basic Google search. Put simply, I think that’s a bad way to approach investing in real estate.
Focusing on a specific market, city, demographics, population, or employment—according to data on the internet—is not a good idea. I say that because the team that you establish on the ground is going to make or break your investment.
So, the numbers in a specific market or deal are not going to be responsible for any financial loss (in my opinion). There is always going to be someone that you have trusted to do a job that will not do it correctly.
Why You Need to Set Up a Real Estate Team BEFORE You Begin Investing
I have a saying that goes, “If you buy the best house on the best street in the best area that has the best capital growth projections, but your property manager is incompetent or a cheat, you’re going to lose money because they’re going to steal your rent or lose your rent because they are so incompetent.”
Therefore, it really doesn’t matter how good that market is, how much potential that area has for growth, or how good the deal is. If your contractors suck, they’re going to go over budget and you’re going to lose money anyway. This is why it’s very important that you first establish the right team before you start your real estate endeavors.
Critical Members of Your Real Estate Investing Team
Who do you need?
- A real estate agent
- A property manager
- A contractor or construction crew
- Maintenance people
- A good attorney
- An accountant
- A title company
I suggest going to your local real estate associations to network with a lot of people. It’s always good to have other successful investors in your contact list who are doing amazing things and who you can always call to ask for advice.
People want to hang around other people that are fun and energetic! Then, they’ll happily offer you their time and advice for free.
Summarizing everything, I think it’s important that you spend time establishing trust and relationships with key people who are going to help you with your real estate investment journey. Do this before you get consumed with the various online stats, demographics, and projections.
Team first, guys! Teamwork really does make the dream work. Don’t forget that.
What do you think? Am I wrong or am I right?
I’d love to hear from you. Comment below.