Hi I am fresh to the real estate biz and I am interested on building a team to help get this show on the road. I would like to purchase a duplex on the first run. So who should I look for on helping me value the investment? Currently I have a finance guy to help me determine if the numbers make sense. I have access to an Real estate attorney and possibly 2 Generals to possibly get a good estimate of rehab cost. Is there any other additions I should make to the team? if so what experts should I look for?
not looking for referrals just general suggestions
If you’re serious about getting into the rental property business, then you will find your most valuable “team member” in the mirror. YOU must learn YOUR market. Depending on someone else to value property for you is an invitation to disaster. YOU must also know how to determine if the numbers make sense. Depending on someone else to tell you if a property is a good deal is a recipe for disaster. The vast majority of people, including many of the so-called gurus, have absolutely no idea how to determine the cash flow on rentals properties. Realtors and finance people are even more incompetent when it comes to picking good investment properties. The vast majority of newbies in the rental property business fail in a short period of time exactly because they don’t understand these issues.
I would suggest that you do WHATEVER IT TAKES to learn the business before you buy anything. You don’t need “a team” until you understand the basics of the business. A good start is to join your local REIA (real estate investors association) and make friends with the SUCCESSFUL investors in your area.
Jay - I hope this answers your question, so here it goes. I started with an RE attorney, a CPA that has rental properties experience 9she owns some herself), a local lender, a realtor, inspector, appraisal, title co., and a general contractor for estimates (but most of the properties I get only need paint/flooring).
You don’t pay a dime until you used their service, but it’s good to have everything and everyone lined up. NOW, the key is knowing how to use each one, and when to use each one. That knowledge is learned from books, REI Club, other investors, this forum. But you don’t want to have a deal THEN go looking for these folks b/c you will end up not interviewing them and asking the right questions. Take your time, and be thorough.
Also, as stated, YOU are the one that has to decide what and where to buy. NONE OF THEM WILL KNOW. They will all have an opinions, but you know how that goes. At the end of the day, it’s YOU.
Thanks Exodallas that answer is exactly what I needed. Yes I will take your advice as well I appreciate the good suggestions. Negotiator If I understand your question correctly I am targeting lower income segment.
Oh yeah so an inspector and appraiser can be two different tradesmen?
Yes, Inspector and Appraiser are TWO totally different people. If you looking into LOW income housing, do a few walkthrough with the inspector and you’ll learn all the “major” things to look for in your area (roof, foundation, electrical codes). The key is to find a “chatty” inspector, one that is willing to show you all the issues and explain in details. Do a few of these and you will have a better idea of the cost of rehabs for future projects. AS for appraiser, I’ll probably get flamed for this one, but I don’t really use one. Since I’m a buy and hold guy, I look at the market RENT in the area. I look at the TAX appraisal found online as well. It’s not exact, but it’s a decent guide.
Remember, the above strategy is what I use for my buy and rent model.