Building Your Team
In real estate investment, a key differentiator – and often the difference between success and failure – is the ability to put together a great supporting team. Using whatever means necessary — networking contacts, other investors, referrals, and detailed research — it is imperative that you build a strong team of professionals to help you maximize your chances of success when flipping houses (or doing any type of real estate investing).
At very minimum, you find the following team members to help you with your investing:
Real Estate Attorney
- To define and create an initial business structure and entity for the company
- To provide legal advice and review contracts received from other professionals
- To create contracts to control property during due diligence
Certified Public Accountant
- To define and create an initial business structure and entity for the company
- To help create methodologies for tracking revenue and expenses
- To help identify tax strategies
- To complete annual taxes
Real Estate Agent
- To provide access to available properties (and MLS, if necessary)
- To provide insight into the local markets
- To identify and analyze available investments
Property Inspector
- To provide inspection services prior to purchase
- To help define cost of repairs and improvements
- To make strategic recommendations on improvements or repairs
Appraiser
- To help define comps and reasonable market value when dealing with non-typical properties or non-typical investments
Mortgage Broker or Lender
- For all financing needs and future finance planning
Title Company
- To clear title for acquired properties
Insurance Agent
- To provide insurance on investments
- To provide recommendations on insurance strategy for investments and tenants
General Contractor
- To help assess scope of work and costs for rehab projects
- To provide access to sub-contractors to perform your rehab
{ 5 comments… read them below or add one }
Your site is very helpful. Thank you for sharing!
Mr. Scott,
I am in the process of putting together my support team, composed of the professionals listed above.
My question is concerning brokers. I have done some research concerning the importance of picking the right broker, with a good reputation, who will work in favor of your (my) best interest. Do you have any advice on how to find these brokers through networking, etc? And maybe a good screening process in order to select the correct one?
Thank you for your time.
Hey Max,
I assume you’re talking about mortgage broker, correct? Unfortunately, there is no tried and true way to find a good mortgage broker — it’s all about asking for references from other people who know good brokers (especially other investors) and doing lots of “interviewing” of potential brokers to see how well-versed they are in the investor side of things.
For example, if you read on this blog about the FHA rules around flipping (the old 90-day rule, the requirements for second appraisals, etc), you’ll probably know more than 90% of the brokers out there do about FHA rules. So, if you can find a broker or two with that knowledge, you probably have one in the top 10%. Secondly, you want someone who is tremendously communicative — the worst trait of most brokers is that they won’t call you for two weeks during a deal, and you have no idea if things are going along smoothly or not.
Once you have a broker or two that seems to fit the bill, give him a try and see how he does. Any issues, cut him loose and move on — like I said, most brokers are horrible, and it may take a couple iterations to find someone great who will help you be successful!
I am trying to decide how necessary a broker is, I guess I will find out through experience. My next question is, which networks have you found to provide the most value to you? As far real estate associations, maybe even the chamber, etc. I am located in your neck of the woods, and was wondering what you would suggest.
Hi Max,
The advantage of a great mortgage broker is that you can get your buyers pre-qualified before you commit to taking your properties off the market for weeks at a time. Before we found a great broker, we’d routinely take the property off the market only to find that the buyer didn’t really qualify for a loan or the broker wasn’t competent enough to get it done. My current broker is amazing, and has NEVER told us that he could get a loan done for one of our buyers and then not delivered. We wouldn’t be nearly as successful without him.