Much of the content that i've read about real estate investing makes mention of the need to build a solid team to help enable success. How did you build a team to establish a solid real estate rehab/flip business?
Great. I'm curious to hear what the pros have to say as well. I think team comes down to two things: 1) your requirements 2) the search
For #1, you would need to think about what your and your properties needs are. Are you looking for a hand-man that can do it all or a property manager or a company? What are your plans for future scaling the business?
For #2, it's networking, networking, networking. Join local real estate clubs. For example, in Sacramento there is a meetup group for biggerpockets.com.
That's my 2 cents.
I started off buying a house for myself. I used a realtor that was referred to me and asked him some questions that I had to get me started. The house needed some work so I did what I could and hired people (friends or referral handymen) smarter than me to do the things I didn't know how to do and I learned from them. When I found people looking to rent my house I asked a friend who had rentals about what to put in a lease and steps that needed to be taken. As I went and ran into needs I found people to meet those needs and as I found people to meet those needs better I added them to my team. I started with a realtor then added, handyman, a lender, an investor/landlord, an accountant, and an attorney. In time I build up more handymen/contractors (different ones for different needs as well as back ups) and other realtors for different areas, as well as other bankers and private investors to help with financing. As the business grows my team grows and usually out of a need for another member.
Great question. And it can and probably should be a long answer but I will try to keep it short.
1. Determine what type of flips you will be doing? Minor Cosmetic, Major Cosmetic, Gut Rehabs, or Tear Downs.
***I normally do in order Major Cosmetic, Tear Downs, Gut Jobs. I very rarely find a Minor Cosmetic rehabs but if I did I would LOVE to do it.)
2. Find your team of people that will bring you leads of potential flips. Build long term RELATIONSHIPS with these people they are your life blood. This would be Wholesellers, REO Brokers, RE Agents, Bird Dogs etc
3. Next you will need to find your lending sources you will want more than one source, but these are included too but not limited to: Hard Money Lenders, Private Money, Joint Ventures, LOCS, and CCs.
4. Closing Attorney or Title Company as well as your Insurance rep. (I like @timnorris from here on BP for insurance)
5. Contractors-- I use about 10 different contractors.
General Contractor Licensed and Insured
EMP's Electrician--Plumber--Mechanical (HVAC)
Exterior Contractor that will do Painting, Fasica, Soffit, Gutters, Brickwork etc
**Those are my 10 contractors that I use on a normal basis unless I get into Tear Downs or Gut Jobs.
6. Listing Broker I want someone that works with buyers and knows how to move a house quick. NOT just anyone with a RE license.
7. CPA to do taxes
(Now if you are not experienced you may want to also know a Home Inspector as well)
That is a general list off the top of my head that I work with I am sure there are some other people as well. Mortgage guy for when you sale, Staging company for when you list, Real Estate Attorney (other than closing attorney), Self Directed IRA Company, etc etc. But this is a good start for you when you are talking about setting up a REI team.
Hope it helps.
This one is not easy, because you have to go through people to find the right ones. If you deal with other investors in your area, ask them for referrals, it will save you a lot of time and money.
Learn to network locally.
@Minka Sha @Troy Young Thanks for the insight... networking seems to be key, and having multiple options to identify the right team member seems to be the way to go. I admire your courage, Troy... i'm finding myself a bit paralyzed by the need to "do my homework" and get a full team put together before doing my first deal.
@Andrew Cordle Thanks for the detailed response. Interesting that you have a wide breadth of contractors that you rely on, focusing on deep expertise in these areas rather than using general handy-man/contractor. Could you elaborate on your second bullet around identifying leads? Thoughts on locating these people?
@Morry Eghbal good advice... just signed up with a local real estate group and am looking forward to the first meeting in the new year!
@Jason Young I am so proud of you, may the LORD bless you and keep your ways prosperous.
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