“Talent wins games, but teamwork and intelligence win championships.” — Michael Jordan
I know that “building the right team” is a very popular topic in business circles and here on BiggerPockets. Actually, when I typed the word “team” in the BP search bar, here are the results:
- 19,277 total search results
- 10,902 forum results
- 569 BiggerPockets Blog results
I am sure you would agree that is a lot of search results! And quite honestly, it should be a popular topic. Without a great team, you can only get so far in this business. The interesting fact about building a team is that it is something you WILL always need as long as you are in this business or any other business. It is not something you “outgrow.” It is not something you need when you begin and something you don’t need when you get more experienced. Wherever you are in your business, you need a strong and effective team. The other important point to note is that your team will change and evolve. People will come, and people will go. As you grow and evolve, you will outgrow certain team members. As you continue to grow and evolve, so should your relationships and team members.
Before you seek out team members, there are a couple of steps I highly recommend.
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Action Steps Before Finding Team Members
#1: Get crystal clear on your real estate investing niche, strategy, and goals FIRST.
Too many people “jump in” to this business without a focus, plan, or goals. They go to networking events, share with people that they are real estate investors, and hope to find people to help them. Wrong move. It is much more effective to become clear on your investing niche, strategy, and goals before you seek out team members.
For example, we currently have a few investing strategies we are focused on, one of which is buying large multifamily apartment buildings in PA. The other key niche is buying small multifamily properties in our current market, which is Trenton, NJ. For this particular niche, here is our strategy/process and two potential exits once we have the property leased.
I share this with you so it will encourage you do the same. What is your niche? What are your goals? And then what is your strategy/process to achieve these goals?
#2: Once your plan, strategy, and goals are in place, ask yourself (and answer) the following questions.
- What team members do I need for every step of my real estate strategy/process?
- Where can I find these people?
- Who do I already know who might have some recommendations?
Once you have recommendations, do not drop the ball on cultivating these relationships.
As a case study, I thought it would be helpful to share who we use as our team members for each stage of the above strategy I shared. Hope this helps you with your team building strategy!
Who You’ll Need for Every Investing Step
#1: Find/Evaluate Property
Finding Property: Wholesalers, attorneys, birddogs, real estate agents — any and all people in your network. The key is to share your goals and what type of deals you are looking for with everyone you know. You have to make sure you are “top of mind” for people!
Title Company: Having a responsive title company (who you give repeat business to) is imperative. This becomes even more important if you decide to buy property at auctions!
Local Municipality Representative: Something new investors forget to do is to check if a property that they are considering purchasing is a legal multifamily. Before we purchase any multifamily in our trading area, we typically call the city inspector and ask them to verify that the address we are considering is, in fact, a legal multifamily. It is not the end of the world if it is not, but it certainly will take more time to make it one.
#2: Purchase Property
Attorney: We have attorneys who helps us put together funds where we raise money from investors to purchase buy and hold properties. We have an attorney who helps with contracts and one who helps with evictions. It is helpful to have different attorneys who specialize in various areas.
Due Diligence: This is a huge part of the “purchasing” stage (i.e. when you have the property under contract). This is when you conduct due diligence on the building, from the roof to the major building appliances to the actual apartments/units themselves. It is helpful to have a contractor or someone that knows buildings well on your team to help during this stage. Due diligence also means collecting data from the current owner (i.e. tax records, maintenance numbers, utility numbers, etc.). You could have someone on your team to help collect these items. If you are not a detail person, get someone who is to help drive this process!
Funding Source: Whether it be your own money, private money, institutional money, or hard money, every investor needs to get their funding in place. There are a ton of articles written on this topic. Actually, my husband just shot a video for BiggerPockets regarding this subject a few weeks ago.
Always be on the lookout for new funding sources. The key is to have options and not feel stuck!
#3: Renovate Property
Contractors: We have had our own in-house construction staff renovating properties and we have also had sub-contractors renovating our properties over the years. There are pluses and minuses to both. We are currently using the model of hiring sub-contractors for renovating our properties. Regardless of the avenue you choose, you must have a written scope of work for each phase of the project, and you need to closely monitor and manage progress. We have two major renovation projects going on that are mixed use buildings around 4000 sqft. However, both are on the same block of our office building. My husband Matt stops in once a day to see how things are going. The key is to manage to a defined timeline and budget!
Inspectors: Most of the properties we purchase always need a ton of work. Therefore, before we can lease the property, we must get a “certificate of occupancy.” While you can’t have your own inspectors on your team, you could certainly get to know and build a relationship with the local inspectors so that you begin to understand what they are looking for during an inspection. I am not going to sugar coat this one; it can be a very frustrating process. What one inspector sees as a violation is not always what another inspector sees as a violation. The key with this process is to stay in communication with them, and don’t talk to them only when you need something — build a relationship with them.
#4: Lease Property
Property Manager & Leasing Agent: Once the property gets the C of O, our property manager gives the OK to our leasing agent to begin marketing the property. The leasing agent then acts as the “point person” to get our units filled. Our property manager then steps in once we get applications. Based on our criteria, the applicant is accepted or denied. Our property manager steps back into the process to on-board them (lease signing, etc.). The key to this stage of the process is to have our property manager and leasing agent in strong communication. They work “hand in hand” during this process, so strong communication is imperative.
#5: Refinance/Hold/Manage Property
This one is fairly self-explanatory, but this is where you are managing the property efficiently and effectively. The most important decision to make before you determine the right team members is to figure out if you are self-managing the property or outsourcing to a third party property management company. For the majority of our portfolio, our team manages the properties. We have a bookkeeper who handles all of our accounts payables, receivables, rent collection, etc. We have a property manager who handles all lease renewals, move out, maintenance issues, etc.
Additional team members for this process include:
- Maintenance Person/Handyman
- Property Manager
- Key Sub-contractors: Some of the key ones we have include pest control, plumber, electrician, carpeting, used appliance company
- Third Party Property Management Company
#6: Market/Sell Property
As I shared earlier, one of the strategies we’re ramping up is the ability to sell renovated/leased property to other investors. For this stage of the process, your team members can be the same team members who helped you find the deals in the first place. We work a lot with wholesalers. We are not interested in being wholesalers ourselves, so we prefer teaming up with great wholesalers who can help us find deals and sell investment property to investors. Other team members for this stage can be real estate agents and birddogs.
In summary, here are some keys to building a successful (and lasting) team:
- Find the best team members by getting involved in the community you are investing in.
- Stay in front of your team. Use technology where possible — for example, we send out a monthly newsletter to our investors and business network. If you can do something like this, then you can stay in front of your network, so they don’t forget about you.
- Cultivate relationships. Don’t just reach out when you need something.
- Align with people who want to see you successful and really get “the most you succeed, the more they succeed.”
- Build relationships with strong advisors, like a mentor, business coach, and mastermind group!
I hope you found this article to be helpful. I am sure I missed some team members. Please share in the comments below who I might have missed!
Thanks for reading and be sure to leave a comment below!