24 Feb 8 People You Need on Your Real Estate Team
In this blog post, I discuss the 8 people you need when developing your real estate team. Having a good team and a good system in place when investing in real estate is crucial. Underestimating the value of these key players is one of the biggest mistakes I see investors make. Proverbs 15:22-23 (ESV) says, “Without counsel plans fail, but with many advisers they succeed. To make an apt answer is a joy to a man, and a word in season, how good it is!” Don’t work harder— work smarter by incorporating these roles into your real estate team!
1. Real Estate Agent
It probably doesn’t come as a surprise that you need a real estate agent on your real estate team. A good real estate agent that genuinely has your best interests in mind is a great asset—you don’t want someone who just has “commission breath.” A real estate agent is immersed in local and regional market activity, as well as industry news. They’ll research active, pending, and sold listings in the areas you’re interested in and keep you up to date on prospective properties.
You probably want to have a couple of contacts for this role in your back-pocket, as contractors need to be fast in available in order for you to make the most money. Look for contractors that are solid, dependable, economical, and experts in areas that where your properties might need rehabs and repairs.
3. Property Manager
I am a huge advocate for working with property managers as opposed to managing everything yourself. This way, you can spend less time managing property and more time finding deals! There is an exception: If you’re a first-time investor, you need to manage a few properties yourself FIRST to know what to look for in a property manager.
4. Mortgage Broker
Your mortgage broker will connect with mortgage lenders on your behalf and seek out the best fit in terms of your financial situation and interest-rate needs. Just like your real estate agent, you need to find someone who understands investor loans.
Having a banker helps, especially if you want to move quickly on deals. For example, if I want to flip a property, I will typically have a local bank loan me money rather than a mortgage product. We will then work out the parameters on the loan-to-value on the property (the loan’s size to the appreciated value of the property). Local banks are typically much more flexible than mortgage products. Those loans are usually good for six months to three years. You can renew them, but I will usually refinance with a mortgage broker, take the money I put in that project out, and then move onto another one. I have several banks set up so I can have several projects going at the same time.
6. Insurance Agent
Your insurance agent needs to understand investment properties and how they need to be covered. For example, in all of the areas where I have properties, I use an umbrella-type of liability policy, hazard insurance, and, in some cases, floods insurance.
Accounting is CRUCIAL for understanding how to account for your expenses. There are several nuances, such as, for example, spending money on a roof. Is it a repair or capital expenditure? The answer matters because capital expenditures allow you to have more depreciation as you move forward. There are several instances such as this that your accountant will be aware of.
This is one of the most significant members of your team. We like to use what we call an LLC Tree in our real estate holdings. (You can learn more about that in my book ‘Strategic Real Estate Investing.’) Attorneys are a key part of setting up systems that protect you and your holdings.
Each one of these real estate team members has specific responsibilities and talents that can really elevate your business. My wife Becky and I often pray for divine connections— that God will bring the right people into our life. If you are in real estate investing or foresee yourself there in the future, we encourage you to begin praying for the right people to be brought into your process. You can help them with their business goals, and they can help you with yours. When we all work together, emphasizing and utilizing our different skills and talents for God, it’s truly Kingdom work. There are tangible benefits that will come to your business from building these roles into your real estate team, and there are spiritual, relational benefits that God can weave into these relationships as well.
Want to learn more? We invite you to check out WealthBuilders University, where we have robust courses on Real Estate, as well as several other topics relating to business and leadership! And keep an eye out for our Real Estate workshop this spring– dates are coming soon!