Regardless of if you have one investment property or one hundred, you absolutely, positively should have at least a skeleton business team in place to make sure that your investment is running smoothly and efficiently. And this doesn’t just apply to the buy and hold investor. If you’re a rehabber or a wholesaler, you can get more accomplished in less time by having a solid business team in place.
The year 2015 is going to be a big year for me as a mortgage broker. My goal is to grow my mortgage business, and that means working on my business, not in it. More specifically, for me that translates to working on providing the environment for my service-based business. And to accomplish this, I will need a transition from actually doing loans to delegating loans to my team members.
But how does that translate for you as the real estate investor, and why would you want to do it?
Simply put, it means that you need to develop your team to help you grow, or at the very least, maintain your business. This allows you to work on building your business and not necessarily working in your business.
Think about the fundamental definition of what “business” really is. If you search online, there are many definitions that pop up, but one of the most common is that a business is the activity of making, buying, or selling goods or services in exchange for money. In real estate investing, we buy a physical living space for someone and either enhance that and then re-sell it (for money, of course), or we are renting it out in an effort to make a profit. (Obviously, there are many variations to actual real estate investing, but this the basic process however you decide to accomplish it.)
With that definition in mind, here are the key players that I see having the greatest impact on your business and why you need them. Keep in mind that I’m not talking about the members of your investment squad, like the realtors, mortgage brokers, attorneys, CPAs, title reps, etc. Those people come and go, but the following team members will allow you to work on your business, not in it.
How I Bought, Rehabbed, Rented, Refinanced, and Repeated for 14 Rental Properties
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3 Business Professionals to Add to Your Real Estate Team
If you don’t know where you stand financially, it’s hard to figure out what you need to do to make money. A well versed bookkeeper who has some experience in your type of real estate investing is valuable in many ways. Bookkeepers can give you advice on the way your money is coming and going. Maybe you’re paying too much for your phone plan, or maybe you aren’t budgeting correctly because you get caught up in the day to day of your business. A good bookkeeper can help you with these types of problems at a fraction of the cost of a CPA.
Bookkeepers are everywhere, and they’re definitely not that hard to find. If you’re just starting out, hire a freelance bookkeeper. There’s no reason to pay someone full time to keep the books when you don’t have a lot of transactions happening. Sure, you could do the bookkeeping yourself, but why waste your time on non-money generating activities?
I actually like to find freelancers online, and bookkeeping is one of those independent contractors that I tend to outsource. I’ve used Elance many, many times for various tasks, including both one time projects and ongoing projects. I have a personal bookkeeper to handle my personal accounts, and I have a business bookkeeper to handle my business accounts. I’ve had to go through a couple of them to find the right ones, and now I’m at the point where my two bookkeepers know exactly what they’re doing and when to do it.
The thing that I like the most about these internet sites where you can find freelancers is that they allow me to post a detailed job description of exactly what it is that I’m looking for. You can have people from all over the world bid on your job, or you can keep within a certain geographic location. It’s easy to narrow down those who don’t fully understand the job description. In any event you’ll get extremely qualified candidates to handle your bookkeeping for you.
On the other hand, if you want to keep it local, post a detailed job description on sites like Craigslist and you’re sure to get some qualified candidates that way. In this case, you can actually see, hear, and smell your bookkeeper of choice!
I hope you’ve read The 4-Hour Workweek by Tim Ferriss. If you haven’t, it’s got a ton of great information. The premise of the book is to outsource as much of your daily, low income generating tasks as possible in order to work on your business and not in it. I’m not saying you should build a real estate investing business where you’re only working on it for a couple hours per week, but what I am saying is that delegating many of your repetitive tasks is essential if you want to grow your business. Tim does an awesome job of explaining this.
A personal assistant can do an immense amount of work for you. Things like answering your email, answering telephone calls, setting appointments, greeting your clients/customers, stuffing envelopes, scheduling your daily activities, writing thank you notes, filing documents, typing memos, and close to a million more functions.
All of those tasks take your most valuable thing you have: time. Hiring and training a personal assistant can save you an immense amount of time in the long run to help you do what you do best… INVEST IN REAL ESTATE!
Again, the question will come up of where to find these people. Many investors use the online freelance sites to find qualified individuals for a fraction of the price of hiring someone full time. This may be one option for you, but I want someone who I can see, train, and evaluate in person. It is usually more expensive than a virtual assistant, but may be worth it if you want your business to get to the next level.
Marketing is the absolute life blood of your real estate investment business. If people don’t know you, like you, and trust you, how in the world are you going to make deals happen? The answer is that you’re not. And if marketing is the lifeblood of the business, then a solid marking coordinator who can implement a strategic marketing plan is the heart that pumps the blood through the veins.
The marketing coordinator should be able to work on a couple of different aspects of your business both online and offline. For online needs, they should be responsible for a website with some sort of list building system and definitely a social media strategy. And for offline, the marketing coordinator will be defining what you need most in your specific space of real estate investing and will be able to help you execute that plan.
I’m one of those people who absolutely loves marketing, especially guerilla-type marketing that is highly effective and very low cost. Even though I love it, I completely suck at it. Fortunately, there are a lot of marketing folks out there who can do the job effectively and efficiently with a lot less effort than what I can put into it. To me, it’s more efficient to build the system than to do the task in this case.
“But Jeff, where do I find these people?”
I’ve already mentioned a couple of ways to find these essential players on your team. Online freelance sites are great, and so is Craigslist. You can also ask friends, family, and other small business owners who they use for their services. I would assume that most other investors have some sort of bookkeeper or accountant to do their book for them. Oftentimes these referrals are the best because there is always that ever-present feeling of trust with these individuals. If your friend trusts them, you may also.
Here’s a hot tip to make sure you’re efficiently running the business system. You should audit your team members at least once per year, maybe even more often. How do you do that? By continuously looking and recruiting better talent. This will keep your team on their toes, and it will establish a culture of peak performance.
To conclude, I think it’s imperative that you have these three core team members on your business team. They will allow you to do more deals, make more money, and help you focus on what you do best: make money!
What other team members would you include as part of your business team?
Submit your comment below.