I am curious about something regarding building my REI team. As I am sure you know, it is important to have a team of specialists in place, ie, real estate tax accountant, real estate lawyer, broker/realtor, etc…
This is for the veterans, based on your hindsight, which team member should I be looking for first?
For example, should I be looking for a real estate tax accountant first so I can get my financial in professional order or should I be looking for a real estate attorney so I can get my legal affairs in professional order?
Does it even matter who is first on the team? Right now, I am just networking and getting contact information through referrals.
I believe in having a team assembled when you’re ready to start investing. Being ready to start means you’ve got you financial house in order, you’ve educated yourself on your chosen area, and have the discipline and work ethic to succeed. You should also have a goal and plan to achieve that goal. When you contact these potential team members, you don’t to waste their time if you’re not ready. I’d start with a financing source. You need to know what your optionsa are. Then you can contact a RE agent with the experience to help you reach your goal. You should be able to get referrals for the other team members as you go. Share your business plan with these people so they can help you better.
Wouldn’t some type of account be needed sooner than later? I don’t have deal but see myself going through money
be it markerting , educating , website list $$$, gas driving looking for properties , REI membership, business cards ,General startup cash . it can add up
It would be good to talk with an accountant to figure out how to set up your business records, but if you know how you’ll be taxed and what form you will file, you can model your records off the IRS form. That will make it easy to translate your numbers to the form at the end of the year.
So yes, it’s a good idea, but not a requirement to have an accountant up front.
Depends on if you want to set up your business that way. Some people would rather do things on their own. If you bring on investors, you’ll need to draw up agreements so each party knows what their rights/responsibilities are. Some people NEED investors because they have little or no money or bad credit. Other people may just want to partner up to do more deals.
The reason I brought up investors is because it sounds like single member LLC’s are too easy to pierce as well as additional capital.
I have been talking with two people who are interested in a small investment where I am the majority partner with 60 percent and the others are 20/20 so the payout would be 60/20/20. We are all at the stage right now where we are networking to get the team players that fit our team goal.
Our plan is starting to take shape now that we have been listening to other investors and their experiences, pros and cons. It just seem like it is more a puzzle to put together than step by step.
Seems the major question is will any of you be actively managing and making repairs to the property? You can search the asset protection / legal forum to see how managing the property yourself will open you up to personal liability.
Biulding a team is instrumental and is usually what separates short term from long term investors. I once read the following words and it completely changed the way i look at this business:
" YOU are a dealmaker,NOT an attorney,NOT a Realtor,Not a handyman,Not a title company. DO NOT TRY TO DO THEIR JOBS! You must surround yourself with the most capable people in your industry. Creat a win-win with these individuals and see first hand how efficient you will become."
There is a lot more to it of course but you get the idea.
Terrific response from everyone here. Thank you for your feedback. The reason I mentioned the setup is because of reading Propertymanager’s book. Terrific book by the way. I will be actively managing the properties myself but also be the majority “holder” in the LLC or appropriate company structure.
I am curious about the mortgage brokers, are they better equipped to contact HML along with the banks for the mortgages?
While I do intend to purchase properties with 10 to 20 percent down at a discount (including seller financing whenever applicable), it seems like a mortgage broker would open up a wider range of loans than a bank. Just not sure whether to use a broker or contact the HMLs that operate in PA because the properties typically ranges from 65K to 150K for multi-unit residential rentals (2 to 4 units).
It really does not matter who is on your POWER team first. By the time you are finished with your first transaction you will be in need of most if not all of them.
Here’s a great place to start, preferably before you put your first property under contract. Find out who is in charge of your local “respected” REIA (Real Estate Investor Association). Some people assemble these groups purely for the money so you need to be careful. Here’s a trick that we have used when dropping into a completely foreign market, such as: our venture into Charlotte, North Carolina.
You contact the President of the REIA and ask him when the next meeting is and tell him that you might be interested in joining. During the conversation you ask them how strong their corporate membership is and if they have a website. If they have a website many of the people listed on the chart below will be advertising their services directly.
Ask for a half-hour meeting to discuss membership and ask a few more questions. Tell them you are “anxious to get started”, you will have your checkbook and if everything looks good you will go ahead and join up at that time.
Bring the chart below to the next meeting and ask them to fill it out completely. If they are unwilling to assist you with all of the items, ask them why? Pretty much any answer is unacceptable and do not join their REIA. They are not actively involved in buying and selling properties each month. If they are flipping, rehabbing or land lording they will have these contacts for you.
If this fails to work for you call your local HomeVestors Franchise and see if they can help you. They purchase a lot of properties from wholesalers and should be willing to help another Investor get started.