In the previous post, we talked about finding and purchasing an investment property. There are many important steps involved in this process, and you may be wondering whether you can do all this work by yourself. If you have the time, inclination, and ability to take care of many things on your own (in other words, if you are a Jack- or Jill-of-all-trades), then you can do some of it, but you can never do all of it completely by yourself.

The reality is that no one can be good at everything that is involved in finding, organizing, and managing a real estate deal. A real estate entrepreneur‘s time is best used by creating and managing an effective team and then doing deals—rather than trying to do everything alone. With that in mind, let‘s take a look at what is involved in creating our winning real estate investment team. In this post, we will look at the experts who can help us with each step, as well as what their individual roles and responsibilities are. Assembling the Power Team is definitely a team sport, not just a one-person show. It requires the input and the help of many different professionals, including a realtor or real estate agent. 

A real estate agent‘s role is to both help us find properties and sell them for us when we are ready to do so. A good realtor can also be very helpful with negotiations and making sure that the paperwork for our deals is in order. The next member on our team is a mortgage broker—in other words, the finance specialist. This person shops the market for the best financing for our deals, prepares the paperwork, and presents it to different lending institutions in order for us to get the ideal loan for the property.

One advantage of working with the mortgage broker is that they don‘t work for any one particular bank. Instead, this person will scout around and find the best financing for our particular situation. Typically, for single-family properties, the mortgage broker gets paid by the lending institution. But for multi-family and commercial properties, we will have to pay the mortgage broker‘s fee.

The next member of our team should be a financial professional (a bookkeeper and/or accountant) who has experience with real estate deals. A financial professional will keep our books in order and make sure that our tax bill is as low as possible and that the taxes we do owe actually get paid.

We will also need a real estate appraiser to determine what the true value of a given property is and to ensure that we are not overpaying for it. This is important not only for us as the deal-maker but also for the bank, since it doesn‘t want to loan us more money than the property is actually worth.

An insurance specialist is also an important part of our team and will obtain the correct insurance plan for the property—a plan that covers fires, earthquakes, floods, and other natural disasters. Those are the most obvious kinds of insurance that we will need for the property in case a catastrophy occurs. However, there are also some lesser-known insurance policies that are important as well, such as liability insurance (which protects us in case the tenant or somebody else gets hurt on the property).

There is also loss of revenue insurance. If something were to happen to the property, it might take a long time to fix it. In the meantime, this kind of insurance will cover not only our mortgage payments and expenses, but also our net income from the property, so we are not losing all of the cash flow.

Now let‘s talk about legal experts and the role they play on our team. When purchasing the property, we want to make sure that everything is done legally and above board. It‘s important that each person—not just the buyer and seller, but also any investment partners involved—has access to their own independent legal advice. This way, everyone‘s interests are represented fairly. This legal paperwork should outline such details as how the deal is going to be structured, what each party is responsible for, etc.

We will also need some good suppliers on our team. If we are involved with the construction or renovation, we will need people who can sell us furniture, appliances, and other equipment for our properties. If we establish a good relationship with these suppliers, chances are we will get better pricing and service from them. Depending on the kind of property we are buying, we may have to use one or more property inspectors. These professionals are very important for several reasons. First of all, we want to make sure that we go into the deal with our eyes wide open as to what the current and potential challenges with that property are.

Therefore, we must ensure that we have a very knowledgeable property inspector who will go through the property with a fine-toothed comb to detect all of the problem areas that might exist. This is also a very good way to be able to renegotiate the purchase price: if the inspector finds any problems with the building, we can either ask that they be dealt with by current owners before we buy the property, or get a discount so we can take care of those issues ourselves.

More team members include maintenance and construction specialists. These professionals construction workers, plumbers, heat and air-conditioning installers, etc. Are very important if we are planning on building or renovating houses. We will also need property management professionals. Once we find and buy a property, we will need someone to manage it.

The property manager will be responsible for finding tenants, as well as maintaining the property. As you can see, each of the above mentioned professionals has a clearly defined role. Together, they will form a power team that will make sure our investment is in good hands.

Summary:

Purchasing and managing a successful investment property requires the help of many professionals with different roles and responsibilities. A power team usually consists of a realtor or real estate agent, mortgage broker, financial professional (a bookkeeper and/or accountant), a real estate appraiser, insurance specialist, inspector, legal expert, suppliers, maintenance and construction specialists, and property management professionals. As wonderful as real estate investing is, it also has some risks and drawbacks involved. In the next post, we will look at some of the most common challenges associated with real estate, as well as some solutions. This way, you will be fully aware of both the opportunities and the potential downsides.

Questions about this post? Don‘t hesitate to contact us and book a call.

“Buying real estate is not only the

best way, the quickest way, the safest

way, but the only way to become wealthy.”

Marshall Field