Investing in real estate, like many other unconventional business ventures, can easily push us past our comfort zones. The wide array of options and strategies available for investing — such as wholesaling, fix and flip, and turnkey — can be bewildering, especially if you’re starting from square one with no previous background as a real estate investor.
But, whether you’re in the early stages of developing your real estate portfolio or are a seasoned commercial real estate investor, relationship building should be an essential component of your business strategy. Like other industries, relationships are invaluable and can make entire processes run much more smoothly. The more people you network with, the more business you stand to secure.
With real estate investing in particular, it takes a village to make an informed decision and determine how, when, and where to properly find a high quality investment property. This typically requires experts in a few different fields as no one ‘guru’ has the bandwidth to be wholly knowledgeable in every facet of a particular subject matter.
Here are some of the key players who can help mitigate the challenges associated with real estate investing:
As a budding real estate investor, you’ve most likely heard second hand of the great achievements of others who have embarked on a similar journey and ending up finding success. These stories often neglect to tell the truth in its entirety, of the real trials and tribulations of real estate investing.
But, if you have a knowledgeable real estate professional by your side, you are already one step ahead of the game. A mentor is an excellent resource because they have not only done the legwork themselves, but are more likely going to be honest about their experiences. You can connect with mentors within associated networks of professional real estate investors or a property management investment firm.
Brokers are licensed to negotiate and arrange transactions and are often required to have a broker’s license, in which the requisites differ from state to state. They also tend to have more education and experience in real estate overall. Most importantly, a broker can provide counsel on why a property might be a good investment, alleviating concern about potential drawbacks. Brokers also have a wide network of real estate agents who can help you find both commercial and residential real estate. Whether you're considering investing in single-family homes or interested in diving into the commercial real estate market, a seasoned broker is a great expert to have within your network.
Introducing a banker to your network would allow technical dexterity on the financial side of investing. Bankers can offer valuable guidance on how to effectively manage relationships with banks, what they look for when it comes to return and interest, and might even be able to deliver a beneficial financial forecast. Having a banker on hand will help you feel as if you have the financial freedom as an investor to generate the right amount of cash with the assets you have available to you.
Part of protecting yourself and making sure you’re making the best decisions with your money and your property is finding and retaining a superb lawyer. Lawyers understand the terms of a contract and can successfully navigate the various negotiations and purchases required of real estate investments, ultimately helping your make a better, faster decision. Depending on the state that you're investing in, a lawyer can help you determine key information, such as property taxes and how to best manage your investment property legally.
In fact, issues regarding contracts that are used to buy and sell real estate are one of the most common areas in which real estate litigation may arise. Disagreements often occur as a result of language in the contract being too ambiguous, or because both parties involved did not properly review the contract before it was officially established.
Another common (and costly) problem that a lawyer can advise on with real estate investing is assumption of liability. Prior to purchasing a piece of commercial real estate, you will want to make sure you are not assuming liability for any violations of law that may exist. For example, if you purchase a property and then later discover that environmental hazards exist, you will be responsible for eradicating the problem whether or not you or the previous owner actually caused it.
REAL ESTATE APPRAISER
Accurate evaluation of the property is vital as it will directly impact the decisions you make going forward. Appraisers are responsible for assessing the value of land and the properties on the land before it is sold, mortgaged, taxed, insured, or developed. The buyer typically can't finalize a mortgage until the appraiser weighs in with an estimation of a property’s specific value.
Having a real estate appraiser within your network can help you save a lot of time and money in terms of your investment. A real estate appraiser can expertly evaluate whether or not the property is worth the amount that it's listed for. A real estate appraiser essentially can save you from having to do hundreds or thousands of dollars worth of repairs, saving you time, money and the headache of going through that process.
Having a repair expert on hand who will give you sound advice on the actual costs needed for patch-ups or renovations will give you peace of mind. This advice can also protect you from other contractors who are likely to upcharge.
Similar to the real estate appraiser, a repair man can easily get jobs done and give you quick and accurate estimates for repairs or projects, so you can easily calculate how much the cost affects your cash flow on the property.
PROPERTY MANAGER (CURRENT OR PREVIOUS)
Property managers can make recommendations when it comes to multi-unit rental properties, including tenant-landlord law and whether or not the property can generate enough rent revenue to be worthy of investment within a particular timeframe.
As the old adage goes — “Behind every great leader is a great team.” While you certainly don’t have to administer the help of every single individual on this list, if you want to catapult your financial success to the next level, you need to assemble your own dream team of experts to support you and help you make informed decisions that will pay off in the long run.