[Remote investing] When should you have your team assembled by?

Question

Hi BP community,

If you are investing in a state that you have never invested in before remotely, how much time would you give yourself to assemble a good core team before getting under contract?

My idea of a core team:

• Buyer's Agent
• Seller's Agent
• Lender
• General Contractor
• Appraiser
• Nark (progress reporter)
• CPA
• Attorney

Thanks!

Adam Bartomeo · Answer

You may want to reevaluate your list... The most important member on any team is your property manager. Not sure how "Nark" made the list before PM...

You should have a good idea of who the team members will be before you start making offers and most should be in place once you start making offers.

Stacy Conkey · Answer

I wouldn't put a time frame on it, because the useful question here is sequence rather than duration. You don't need that whole list before you can move. You need two people, and the rest get hired at the stage where they do work.

Two hires get you to an offer. An agent and a lender. The lender gives you a pre-approval so your offers carry weight, the agent writes them, and you can have both inside of two weeks if you're working the phones.

Everyone who touches the property comes after acceptance. Inspector, contractors for bids, insurance agent, title, and your eyes on the ground. All of that fits inside the inspection period, which is the thing your offer bought you.

Property management and your entity paperwork land before closing. You want the PM hired before you own the property, and you don't need them to make offers.

CPA is whenever. Before your first tax year closes is fine.

A few edits to your list. There's no seller's agent to hire, because that's the other side of the table and their duty runs to the seller. The appraiser isn't yours either, since your lender orders that and on a conventional loan it goes through an appraisal management company specifically so you can't influence it. What you can do is hand your agent strong comps to pass along, and know that a bad appraisal is disputable. In 2018 my partner and I had appraisals come back low across a portfolio refinance and we built a comp case and got every one of them overturned, which most people don't realize is even on the table. Your GC also doesn't need to exist yet, because contractor bids happen during due diligence off the inspection report, and you want two or three bidding the same scope so the spread tells you something.

The one I'd promote to the top of your priority pile is the "nark," and I'd give that role a better name, because it carries more weight in remote investing than anything else on your list. That's your verification person, and the rule I hold to is that whoever does the work is never the person confirming the work, since that arrangement pays somebody to tell you they did a good job. Could be an inspector, a leasing agent, a friend of a friend. They shoot narrated video with the date visible, and nobody gets paid until they've confirmed it.

Your list is missing three people, and one of them matters more than anything you wrote down. First, a property manager, and when you get there call as many as you can find and listen for the contrast, because you can't call one company, get all your answers, and decide that's the right one. Every answer any single one of them gives you is an opinion, so stack opinions until the truth is obvious, and when you do hire, keep final say on tenant approval even if they run everything else. Second, an insurance agent, quoting you before you make an offer rather than after, because insurance on an older building will surprise you and it's the line item people model instead of verify. Third, a title company you've talked to, so closing isn't the first time you hear their name.

Now the part I'd push you on. The plan where you assemble a perfect team and then go buy something is what people build when they're nervous, and I say that with affection, because I did exactly that. Most of your offers are going to get rejected, so treating the pre-acceptance phase as the careful one gets it backwards. Move fast before acceptance, since offers are reps and reps are what turn you into an operator. The moment a seller signs, slow all the way down, because whatever you buy is yours.

You'll also build a better team through one live deal than through twenty interviews. Nothing tells you who a contractor or a title rep really is like a transaction with money in it and a clock running.

Frank Procopio · Answer

I would do my research into the area you intend to invest in. Check out top producing agents in the area, check bp forums and the local rei groups online. Those will all provide numerous resources and then I would have conversations with multiple parties until you find people you are comfortable with that have a proven track record. Not sure if you can assign a time frame to feeling comfortable in moving forward

[Remote investing] When should you have your team assembled by?

3 Replies