Monday, March 29, 2010

Who's on Your Team?

Depending on your own skills and preferences, you will need to depend on professionals in several different areas of expertise if you are buying, selling or investing in real estate. They may include all or some of the following:

Real Estate Agent: Unless you have your own real estate license, you will probably be using agents to help you find, negotiate, or market property. In exchange for their expertise, they typically receive a commission for their work. Real estate agents can advise you on all aspects of real estate acquisition, finance, negotiation, and marketing, including trends in the market, values of specific properties, legal requirements and paperwork, along with referral s to contractors, brokers, escrow agents, lenders, and other real estate professionals. They can be a valuable source of information.

Mortgage lender 1-4 units
Mortgage lender (commercial)
Hard money lender
Private lender
I am of the opinion that an investor can never have too many lenders. As with all of these professionals, ask around. Check with fellow investors and find out who they use. Line up your lenders, and get pre-approved with at least one mortgage lender and one hard money lender in advance of making any offers. Lining up private lenders is another whole area of expertise, and we will cover this topic in more detail in a future blog.

Insurance Agent: As soon as you buy a property, you will need insurance. Best to line this one up in advance as well. Get referrals from your real estate agent.

Real Estate Attorney: I love my membership in Pre-Paid Legal, as I can call any time I need legal advice for a mere $17 per month. I call all the time—to update my will, seek guidance on landlord-tenant law, draft property easements, and so much more. At the same time, I also have 2-3 good attorneys I can use for anything that requires more consultation—and so should you! Find a reputable real estate attorney to add to your “team!”

Escrow/Closing Agent: If you are doing creative investor-type real estate purchases, you might find that you need a specialized closer, and not your traditional escrow agent. Have one of each—the traditional escrow agent or attorney to close your simple deals, and perhaps find a closing agent through your REAPS network who understands “Subject To,” simultaneous closings, assignments or other “unusual” closings commonly done by investors.

Contractors: whether you are a rehabber, a landlord, or just a plain old homeowner, you will need to develop a list of your favorite plumber, electrician, carpenter, framer, painter, roofer, flooring installer, handyman, and on…and on…and on. This is one list that you will be continuously updating—even after you get to the point of having a regular core crew of guys (and the occasional gal).

CPA/Accountant/Bookkeeper: It’s not just about keeping the books straight for taxes. It’s also about keeping your records in order to avoid lawsuits, maximize tax deductions and profits. These professionals keep you honest, and can help you find ways to keep more of the money you earn!

Home Inspector: Don’t wait until you put in an offer—line this professional up now. Once you submit an offer, you typically have ten days to get any inspections done on your property.

Property Manager: Many investors try to save money here by doing this themselves, but if you do be sure that you are up to speed on the latest laws. Tenants love to sue landlords, and if you’d rather not deal with tenants, you might just want to hire a property manager.

Assistants: Start by delegating more mundane and routine tasks when you are ready to do so. I like to hire teens or seniors to hand-address envelopes for my direct mail campaigns, but I also use virtual assistants. I like for my virtual assistants, but there are several virtual assistant sites on the internet you might like to use.

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