Teamwork has always been recognized as one of the primary reasons why some business ventures succeed while others falter and sometimes fail altogether. This is certainly true when entrepreneurs decide to invest in real estate as a way to improve their financial lives. Unfortunately, many inexperienced investors start their real estate career without a clear idea of how to build a support team.
Your real estate support team should consist of many different people who fill roles similar to the players on a championship basketball team. Just as the point man calls the plays and sets up how the ball is moved down the court all the way to the hoop, the real estate entrepreneur will develop the plan, guide the other members of the team, and ultimately be responsible for the success of the investment.
You are the real estate entrepreneur and you will be responsible for the success of your investment career, but the journey becomes much easier if you learn who should be on your investment team and what roles these individuals will assume. Michael Jordan is recognized as one of the most prolific and well-respected champions ever to set foot on a basketball court. In an interview, he once said, “Talent wins games, but teamwork and intelligence win championships.”
Every real estate investor will have different goals and will also choose different strategies to accomplish those goals. What successful investors have in common is the ability to surround themselves with a support or investing team that is united in purpose and works toward well-defined goals and objectives. Let’s look at 5 easy steps you can take that will help you build a successful real estate investing team. We can call these the 5 D’s for team building success.
Step #1 – Decide on Your Personal Real Estate Investment Strategy
Everything starts with a well-thought out real estate strategy. Prior to jumping in to the real estate arena, you need to decide which strategy or strategies you are going to pursue. There are multiple strategies available for investing in real estate. Perhaps you are most interested in finding potential rental properties and then building a portfolio of properties. If this is your goal you will need to understand all the responsibilities that come with being a landlord. On the other hand, you might be more interested in locating “fixer up properties” and then rehabbing them and making a profit. It doesn’t take long and you will see that there are a number of real estate investment strategies that make sense.
Once you decide on the basic real estate strategy you are going to follow, you will need to establish some basic objectives in terms of timing. The more specific you are when setting these preliminary objectives, the easier it will be to accomplish them. Unless you set realistic timetables, it will become very difficult to stay focused, and if you lose focus, you will also become discouraged.
Step #2 – Define Your Team Roles
Having a basic understanding of where you want to go is important, but now you need to be more focused on what exactly it will take to make it happen. If you are like other real estate entrepreneurs, you might be a little overwhelmed by the scope of the task and the amount of work that needs to be done. There are properties to find, inspections to be made, appraisals to be arranged, repairs to be coordinated, financing to be secured, closings to be coordinated, and the list seems to go on and on.
If you try to do everything yourself, it’s entirely possible that you will miss your timetables and more often than not, actually fail to accomplish your goals. Now it’s time to consider bringing in extra help and set up an investment support team. These individuals won’t necessarily be employees, and in fact most of them won’t be. They will probably be professionals in other fields that will help you by simply doing their regular work.
Let’s look at a few roles that these other professionals will fill.
- Realtors and Brokers. It’s inherent that you will need to become extremely familiar with the real estate market and a good realtor or broker will help you do that. You will need to be very open and straight forward with your realtor so that you are both on the same page. Once the realtor knows what you are looking for, the search for the right properties becomes much easier. It is highly recommended that you consider engaging a good “buyer’s agent” who will work on your behalf and not for the seller. There really is a difference.
- Real Estate Attorney. A good real estate attorney will help you accomplish three main objectives. First, your attorney will help you structure deals that work for both parties. It is imperative that you find an attorney who understands your goals and who will work to find solutions and not just problems. Second, your attorney can protect you from unknowingly signing a document that puts you in peril down the road. And finally, your real estate attorney can help you follow procedures that make negotiation much easier when dealing with the other parties to your transactions.
- Financing Professional. This individual might be a loan officer or bank official. It might also be a mortgage broker. Not only will this member of your team be familiar with the different financing possibilities, but he or she will also be fully informed of your financing needs as well as credit problems. The more familiar this person is with your financial requirements, the better deals you’ll be able to make.
- Insurance Agent. You may need property insurance, rental insurance or even business liability insurance. Insurance serves a real purpose when investing in real estate.
- Accountant. You may think that you will only need an accountant when you develop a portfolio of investment properties, but this is just opposite of the truth. You need an accountant on your team who can help you structure deals within your financial capabilities.
- Title Company. A great working relationship with a quality title company will help you secure title insurance and set up closings. When problems arise, and they will, a good title company can help solve those problems and avoid failed closings.
- Networking Person. You may need a “bird dog” or individual who will do specific jobs for you. This person may work on commissions or be an employee, but he or she will need to network with the remaining members of your team.
Step #3 – Draft Qualified Team Members
Once you have identified the key positions on your potential real estate support team, you need to find the individuals who will fill those roles. You may start by networking with other real estate investors in your area and asking who they use for insurance, title work etc. They will usually be happy to share that information with you when you are asking for the names of quality professionals. They may share with you information on realtors, but remember that you are interested in finding realtors who will work FOR YOU.
You can also talk with people you personally know in banking and insurance for help in finding people who will fill those roles. As more and more of your friends and associates know about your desire to invest in real estate, it will be easier to solicit recommendations for people or companies to become part of your support team.
Identifying the key people to fill the roles on your team is only part of the solution. Now you need to talk to them and let them know what your investment strategy is and to show them how they will benefit by becoming part of your team. When you succeed, other members of your team will also succeed.
You need to spend time with the potential members of your team and let them know how you are going to work with them on win/win solutions. It’s not just about your becoming successful. When you succeed, they succeed.
Step #4 – Delegate Responsibilities
Never forget that you are the leader of the team. It’s your real estate investment strategy and it’s up to you to make things happen. The only way you are going to accomplish this is to delegate responsibilities. Delegation is important for efficiency.
If you assign a task to a member of your team, you need to allow them to accomplish it. While you are establishing a team, you need to learn which members of the team take responsibility and run with it. The only way this will happen is for you to let go and then allow the member of your team to follow thru. This may sound like you are just stepping out of the way, but the opposite is true as long as you start with explicit instructions on what you want accomplished.
Let’s consider the idea that you are asking your realtor (who is a potential member of your team) to find the best properties that might be used for rentals in a certain geographic area. Start by including exact requirements for the properties as far as price, number of bedrooms and baths, and proximity to good schools. Your list of requirements could be fairly extensive, but make sure it is complete. Now give your realtor time and see what they come up with. You are delegating the responsibility to the realtor, now you need to step back and let them assume that responsibility.
Once you delegate a responsibility to a team member, you will need to follow thru and see that the team member accomplishes the task.
Step #5 – Don’t Take all the Credit
If you want the members of your team to continue to support you and work with you, you will want to show your appreciation for their efforts. This appreciation can be expressed through both words and actions. If you make a great deal on a real estate property and certain members of your team performed a needed role, don’t forget to share some of the rewards with them.
When you remember that you are guiding the team and performing the role of the point guard on the basketball court, it becomes much easier to recognize the contributions of the other members of your support and investment team. If the point guard hogs the ball and fails to get the ball to the team member ready to make an easy basket, the score is never made.
Henry Ford had a dream and a vision that evolved into one of the largest and most successful companies in the country. He understood the value of working together as a team. He is quoted as saying, “Coming together is a beginning, keeping together is progress, working together is success.” His view of teamwork can be the catalyst of building your successful real estate investing team in 5 easy steps.