Build a Real Estate Team

Investing in any market may be risky, as there is always a degree of risk on any investment, even if it is just the systemic or residual risk. You may have heard this time and time again, but being surrounded by the best alows you to become even better. Investing is a process, is a plan, being it investing in pension funds or in an all-in stock portfolio, and having the help and advices from the people who know better how to handle it is an important detail. Some of the mentioned professionals may seem obvious, but others not so much, and each one has a perspective of investing that they specialize, and together they create the perfect environment for a simple and unstressful investment ventures. From accountants and lawyers, to contractors and construction products shop salespeople, these are the most important elements of any real estate investing team.

RE agent

The first and most important contact is the real estate agent, or even better, a network of real estate agents from various real estate agencies, as they’ll be the ones that will present you your best properties investments. It’s important to maintain a good and healthy relationship with real estate agents so you can have the best deals delivered to you firstly, as they will prime the clients with whom their contacts and talks are most appealing. A good relationship is built around the trust in the parts, i.e., by not pressing to much to squeeze the lowest purchase price from the agent, this may lead to him or her not to give those best deals in first hand. They usually charge between 3%-5% of the purchase/sale price, but it may well be worth it.

Property Manager

Being it an enterprise or a single individual, a property manager deals with the business side of real estate investing, looking after the physical and financial conditions of the properties under their supervision. Their tasks can vary from recruitment and selection of tenants, managing the rents (its value, increases, payments, due diligence), and they are also the first contact for all problems and needs of the property like repairs and condominium questions. Usually they’ll charge between 5%-15% of the monthly rent for their services, and sometimes it is better to pay a little more but have a well done service delivered.

Lawyer

We don’t know everything and having a specialist helps in the process of investing. Buying real estate has more to do with a business than to impersonal investing or trading, so, a more profound knowledge of the surrounding expertise areas are important to learn, and law is one of them. There are many documents, licenses and forms that are truly indispensable to real estate investing, in every sector of this type of investment. A lawyer will help you with all the due diligence that is connected with buying, selling and renting, preparing all the forms that are required and applying for the correct licenses.

Engineer/Contractor

An engineer is a professional who understands the planning and construction of infrastructures, namingly, properties. It is a valuable asset to your real estate investing team as he or she will have a persception of the value, materials, modelling and all other aspects regarding the property. Allied with a contractor, the engineer will also help you reform the property, fixing it’s issues and planning how your new asset can be improved. The contractor is the professional who is practically managing the construction site and the property renewal, it will be your direct contact to understand what is being done, and how is it going accordingly to the plan.

Lender

It can have various forms, but you’ll need external capital to help you grow your portfolio, and one of the ways is through lending (in contrast with equity capital). Lenders could take a form of institutions of credit, mutual funds or private investors. The lender will be the one financing your asset acquisition, while you’ll be the one managing, and for that it’ll require one type of revenue: interest. In the other hand, equity lender will require a portion of capital, be it directly in the asset, or through a partnership. If your financing is by banking credit, your best option is to know a handful of bank account managers with whom you can establish a relationship that’ll help you access credit.

Insurance agent

Damages can occur in any occasion and being prepared is always better than having a catastrophe that can get bigger and bigger. Insurance is your best ally, more specifically, insurance agents, the people who negociate and get the best insurance contract for the best price for your situation and circumstances. As always, having a network of people is better than only depending on one, and in this way, you can compare the different offers you can get to protect your property and inveestment. No two properties are exactly the same, and so will be the insurance contracts, that can or not cover situations like: fires, floods, thefts, broken windows, etc.

Accountant

An accountant, or accountant’s office, is essential to garanty that you keep track of your revenues and expenses, not just for the sake of fiscality , but for measuring and planning your investments. These professionals know how to read financial information and can predict your business evolution but also help you determine what to do in order to evolve your activity to other levels. Fiscality is important in order to save money in taxes that can be invested in other projects, so there’s another advantage to ask for the services of an accountant.