Newbies, if You Want to Land a Property Within 12 Months, You Need to Do THIS Now

by | BiggerPockets.com

Getting ahead of problems is one of the single most influential things you can do in life—and real estate is no different. This is a business that works in long timelines and complex systems. It’s a high stakes game. This makes it imperative that you get on top of future problems immediately, and that requires people. You need great people to see big success, and the sooner you bring them on, the more success you will see.

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Scrambling to Find Help is Not a Strategy

Imagine this common scenario: A person moves towards closing a deal, and as they get close they find themselves needing help, the person goes out searching for someone to tag in during the eleventh hour. When the whole procedure relies on hoping to find someone at the last moment to complete the last mile, then it’s no longer a strategy. It’s just hoping for luck.

It is very common to hear stories of people who bought a house and then can’t get a contractor to show up and do good work. Another common problem is when people buy a house to BRRRR and then can’t get a refi loan once the property is done. These have a common solution: Bring your team in earlier to strategize and implement a solution.

Team Building is an Ongoing Process

Some people really need a team of partners to help them get the initial process started and to feel confident going forward. If this is you, start building your team now. Others can get that first bit of momentum but then get caught in the middle of a deal when a rehab or refi goes badly and need some help to get through. Having a team in place would have helped mitigate that problem. Still others can do deals all by themselves, but they quickly realize that if they want to grow bigger, they can’t do it alone. If this is you, the answer is the same: Build a team, today!

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Related: 20 Must-Have Team Members for Real Estate Investing Newbies

Starting to Notice a Trend?

Building a team isn’t a “set it and forget it” type of task; it’s constant and never ending. You’re always going to need the next contractor, real estate agent, property manager, or lender, so be on the lookout. Build that relationship now while it’s easier and less is on the line. It’s much harder to make friends when you start in a stressful environment. Once you have a great group of people, start looking for backups and replacements for when the good ones bail, which eventually they will. This is the nature of business. It’s highly unlikely that you’ll find a great group of five people and stick with them forever. You’re going to change teammates, and you don’t want to be caught without a solution. Start solving it now by working on those future relationships today.

Don’t be Shy

It’s difficult to find a vender and reach out to them to build a relationship when you don’t have a deal for them immediately. I am not unsympathetic to how awkward it can be to try to talk about business with someone when you don’t really have business to do with them yet. But look, I only said it was awkward—you’re not going to lose a limb or anything. You’ve got do it even when it’s awkward.

Use the internet, referrals, and the BiggerPockets search function to find great people and try to create an organic relationship with them, i.e. make friends. Don’t be apprehensive, be ambitious! Reach out to people and just try. You’ll be surprised how receptive people are, especially if you are someone who seems like a good investment.

The Real Value in Business Lies in Relationships

Are you looking at your team as a couple people who can help you deal with a transaction? Does your team look to you for leadership or inspiration? I say the same thing in every piece of content I produce: Business is about relationships. If you get a deal together and then go to the marketplace to find someone to hire for a job, that’s the same thing you’re going to get in return: someone who is just waiting for the marketplace to hire them. This person isn’t concerned with your motives or long-term vision. They are not internally motivated to complete a common goal with you. If you can motivate and inspire people to believe in a common goal (yours), then you’ll have a diligent and loyal set of friends who will propel you forward far beyond your own talents. Building a great team is far more valuable than any single real estate deal.

real-estate-networking

3 Ways I Involve My Team Early & Often

1. I give my lender my tax returns at year-start.

Talk about super early! The last two years, I’ve gotten my tax returns back from my CPA—and before I’ve signed and returned them, I’ve given them to my lender for review. He then makes sure my income will support my total strategy for the year going forward. Maybe I’ve been writing too much off, which would hinder my DTI. It’s important for me to know about any potential upcoming problems and deal with them as early as possible.

Related: The Best Way to Attract Like-Minded People for Your Real Estate Team

2. I encourage my real estate agent to join me in new endeavors.

My real estate agent and I work hard to buy residential properties for our network, but I have started to transition into commercial properties, and I didn’t necessarily want to find a new partner. So instead I’ve motivated my agent to move towards her own career in commercial property. Now, she had a desire to do this anyway, but I’m also getting a long-standing partner to grow with me, rather than having to find someone new for these upcoming deals..

3. I talk to my team in terms of solving next year’s problems.

Solve tomorrow’s problems, and the problems of today become super easy. Think of it like this: If you’re spending your days trying to pay off credit card debt, then you’re essentially solving problems from yesterday. Instead, solve the problems of tomorrow and get ahead of your life rather than playing catch up. This goes right in line with team building as well. Don’t build a team last minute to solve a problem (a house rehab or refi) that you already created. Instead, build a team NOW to solve the problems you’re going to run into tomorrow.

Start Building Your Team TODAY!

If you want to buy a house in the next 12 months, then you need to start working on a team right now. You never know who will help you, what you’ll learn, and what other opportunities people will provide along the way. That’s a lot of opportunity cost to pass up in the present just to have to eventually build the team anyway. Instead, do it right now—it’s easy!

About Author

Alexander Felice

Alex is a long distance single-family real estate investor and a full-time underwriter at a commercial bank. After a few years of success in real estate, he felt compelled to teach people real estate is more profitable than they might think and far less risky than they assume. Alex is the author of brokeisachoice.com

10 Comments

  1. Cindy Larsen

    Great article Alexander. Less than a year ago, I sold my property in CA and moved to WA where I proceeded to buy as many cash flowing properties as I could find before my downpayment money and/or credit run out, and the interest rates go up. being new to Washington, I started out with only my sons on my team: they have impressive remodeling skills (some of which I taught them) but limited time to help me out.

    I was searching for good deals in 3 different counties (my idea of diversification), so I found three different RE agents with some multifamily experience. All of them turned out to know less than I do, but even so, one of them helped me get my first Washington deal done (3 duplexes on two contiguous tax parcels). During that deal I managed to:
    – find an execllent home inspector: who subsequently saved me from several deals that looked good, but were not. He has inspected 11 tax parcels for me, 6 of which I bought. Yes, I paid almost double for home inspections, but not buying bad deals was worth far more then the home insoection fees
    – shopped for a good lender, and found one that I have used to buy 5 properties. Not only did they offer good rates, They helped me by migrating my information from one deal to the next, which saved me lots of time uploading the same info multiple times. And that lender also used the income from each deal to help me qualify for subsequent deals.
    – found a good home insurance agent who specializes in multifamily
    later
    – found a good roofing and gutters contractor because they had just done the roof on one of the properties I looked at, and my home inspector said it was a good job.
    – found a good plumber who gives me the same rate they give property management companies: which is about 40% of what random plumbers have quoted me.
    – found a good chimney/masonry guy
    – found a good electrician
    – and a good structural engineer

    I’m still looking for good general contractors. I’ve found a couple of them who know what they are doing, but who try to overcharge me, and are not really interested in win-win: just get the job done and move on to the next client. I also need a good handyman. And a gardner.

    One of the real estate agents I picked turned out to either not know, or not care, if she was doing a good job, and almost cost me over $100k. Fortunately, I check everything, and I found out she was wrong, just before I signed. She tried to push me into signing without checking the meaning and consequences of an inspection report. After I fired the bad RE agent, I finally found my RE partner, who I hope to work with for many years.

    It has been a challenging journey. Building a team on the fly is HARD. But my team is battle tested and invaluable. Each additional deal has been easier than the last, because I have people I trust on my team. Some of them, I had to convince to trust me, and believe that I know what I am doing. Some of them have chosen me as a mentor. Most of them, I have learned from.

    From experience, and with the support of my team, I went from taking about a week to analyze and offer on a deal to less than 24 hours from when it popped onto the MLS. At least half of the deals I offered on, I got under contract, in a hot market, by learning how to make my offers attractive to the seller, without offering too steep a price. A big part of this was another team member: the Bigger Pockets Rental property calculator. I learned where to get realistic and/or conservative numbers to put into the calculator. Then, I could determine with a good degree of confidence how much I could afford to offer, and could offer attractive terms. I got my most recent deal largely because I offered to put down additional downpayment if the property appraised low, and offered an escallation clause. I could do this because I knew what those events that would do to my cash flow, by playing what-if with the BP calculator. If my team has responded 2 hours slower, I would not have got that deal. No way I could have done it on my own, even with the calculator.

    Finding a team up front would have made everything go much smoother and easier, and faster, with less risk. Building relationships with good people is essential. Enlisting them in your goals by treating them as equals and explaining the path you are on, and how valuable their skills are to you, and offering them a long term win-win relationship (e.g. recommending them to others, to give your team members more business) is rewarding. Most of my team are now friends. Not only are they on my team, I’m on their team.

    I’m sure it would be easier to do team building without the stress of buying properties at the same time. I am entering a consolidation phase, getting units remodeled, turned, and rents increased. Meanwhile I will keep growing my team, with the right people, so my future deals are even better.

  2. Louis Henry

    Thanks for the great article, I’m a newbie just starting out. I have a few members on my team and I definitely see how much easier it is to get information that leads you in the right direction and helps you stick to your strategy!

    Thanks for the great article!

  3. joshua Kohl

    So enjoyed your article. I am listening to your recent podcast now.

    Just got under contract on my first property and put 25% down, so am looking into the BRRR strategy more and more because I can’t raise enough capital to do deals quick enough.

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