Hello, I am a passive investor with no exp living out of the illinois area, and as a w-2 worker I am looking to transition to the investor side.... with real estate. So i have a question in regards to building a wealth building team....what do real estate investors usually ask about a professional that qualifies them best to suite their investing interests? Like what questions do you usually ask a CPA, or a Real estate attorney?
Thanks, best wishes,
Congrats on looking to make the transition to the investor side. As one of those professionals, here are a few questions I commonly get asked:
- Do you work with real estate professionals?
- Do you invest yourself?
- What type of entity should I set up? If one at all?
- What are some pitfalls to avoid?
- How should I keep my records?
- What taxes am I responsible for?
- How do partnership structures work?
I could go one, but this is a good starting point. I'm sure many other people will chime in with great questions too! If you have any other questions, feel free to ask!
Best of luck!
Hello @Travis Avenarius ,
I believe that you must first understand what team members you need and what responsibilities each team member has before developing interview questions. I am a Realtor in Las Vegas and my practice is almost exclusively remote investors. My primary team members include the following:
• Property Manager
• Realtor (my partner and I)
• Investor (the client)
The property manager is THE key person but I will provide a brief description of the duties for each. Will you occasionally find an individual who has more skill categories than what is shown below? Yes. For example, we developed software and processes for finding good properties; we find the properties for our clients. So, take the following as a general guideline, not a rule.
What to Expect from Team Members
The property manager is the key member of any investment team. Below is a diagram showing the roles they play in each phase of the investment life cycle.
Most Realtors know little about selecting investment properties. However, they know what sells and what does not as well as local economic conditions. And, what motivates people to buy are the same motivations to rent. They also have the best understanding of changing conditions in the local market. And, last but most importantly, they are the ones who ensure that you have a safe and secure transaction. They know the laws and regulations concerning buying properties.
The property inspector I work with has saved me and my clients from buying potential disasters many times. For example, in a recent purchase he detected that something was wrong with the tile roof. To make a long story short, the seller put a new roof on the house before close of escrow. If the inspector had not called out the potential roof problem, my client would have been faced with an unexpected $12,000 expense in the near future.
Your job is to lead the team but it would be a very incompetent leader that did not listen to their trusted advisers. It is also your job to ask only what each team member can realistically provide. For example, you would not ask your Realtor to quote on replacing the roof on a property. That is the job of the contractor. So, do not expect the Realtor to select good investment properties. That sort of knowledge comes from the property manager. Also, do not expect the property manager to estate profitability, that is your job.
The contractor is the person to tell you what something will cost and what are the risks. For example, carpets, paint, window treatments, appliances have virtually no risk. Mold, bad plumbing, bad electrical, structural damage can all be high risk items.
The Key Team Member Element
Integrity is THE critical characteristic for all investment team members. The reason integrity is so important is that there is no way to write an agreement which will ensure that the team member will do what is actually needed for you to be successful. Saying this another way, there is the "letter" of an agreement and there is the "spirit and intent" of an agreement. A person with integrity will consistently carry out the spirit and intent of the agreement. A person without a deep sense of personal integrity can usually be relied upon to carry out the letter of the contract most of the time which simply is not enough. Never associate with or deal with anyone who is not a person of high integrity.
I have a set of property manager interview questions which I'm happy to share with you (or anyone else) if you are interested.
Travis, I hope the above helps get you started.
WOW! These responses are INVALUABLE! Thank you gentlemen for those professional answers, and thank you so much for what services you provide.
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