Today I’m bringing you a guest post from a fellow military member who is building his real estate empire. David is an active-duty Marine who devotes his free time to teaching service members and veterans how to build wealth through real estate investing, entrepreneurship, and personal finance. He blogs at https://www.frommilitarytomillionaire.com/military-millionaire/. David is here to talk about how he builds a real estate team and system to simplify real estate investing. I’ve talked a little bit before about being a landlord, but this is by no means my area of expertise. So let’s hear from someone doing it far better than me. Take it away, David!
Building a Real Estate Team/System That Complements Real Estate Investing, Despite Being Stationed Elsewhere
Real estate investing is a team sport.
The stronger your team is, the more successful you will be as a real estate investor.
For example, my property manager has (on a few occasions) evicted a tenant, prepped the unit for a new tenant, and had a new tenant move in before I ever knew that we needed to evict somebody.
This takes a lot of the stress of investing out of my life and allows me to focus on more important tasks.
Conversely, if I had a bad property manager or self-managed my rentals, I would be stressed to the max about evictions, vacancy, and maintenance issues.
That is the power of a solid team with great systems in place!
Referrals
The best way to find quality members of your team is through referrals.
David Greene always says that “Rockstars know Rockstars,” and I agree completely.
For example, if you have a high-quality, successful real estate agent on your team, he or she will not want to tarnish their reputation by referring crappy people to you.
My go-to mortgage broker, insurance broker, contractor, and Certified Public Accountant (CPA) were all referred to me!
Key Players
There are so many occupations that could complement your team. However, these are the four must-have rockstars on your team.
Real Estate Agent
You need to find a solid real estate agent for your team ASAP!
Even if you are purchasing off-market real estate deals, I recommend utilizing a real estate agent to cover your butt, in case any transactional errors occur.
There are two tricks I use to find decent real estate agents when I am stationed out of state.
First, I will conduct a Google search for “Best real estate agent in [insert city].” This will inevitably pull up a Yelp.com page like this:
When you open this article, you want to scroll past all of the “sponsored results” real estate agents and down to the “all results” section of real estate agents.
You don’t want to be sifting through the agents who are paying to be at the top of the list, you want to sift through the agents who are at the top of the list due to genuine reviews!
I will then narrow this list down to three candidates and contact all three of them to arrange a meeting.
Meet with these agents, let them know what you’re looking to purchase, and then give them all a “trial run” in order to determine which agent communicates best and works the fastest for you!
Not every agent can handle working with investors, and that is okay.
The second way I may find decent agents is to simply work with the listing agents on various properties I’m interested in (on Realtor, Trulia, or Zillow) and keep whichever agent communicates the best and works the hardest to answer my questions.
Property manager
You can follow a similar Google-search process of elimination to find a good property manager or you can ask your real estate agent who they recommend.
I interviewed two property managers from Google searches and one property manager who was referred by my real estate agent before settling on my current property manager.
The most important thing you can do is interview these property managers thoroughly and read through the contract you would be signing to work with them.
Yes, you need to actually read this contract in detail!
You need to ask them about their experience, maintenance team, bookkeeping, how they are insured, etc.
Also, be sure you verify that they ONLY get paid from rent collected. Your manager should not get paid if the unit is vacant, as there is no incentive for them to rent your place faster.
I have compiled a complete list of 20 property manager interview questions you need to ask!
Lender
I like to utilize the Community Bank Locator (ICBA) app to find potential lenders. This app allows you to type in a zip code, and it populates local banks that might have the mortgage decision-maker in house.
I have also found an independent mortgage broker through – you guessed it – my real estate agent!
I recommend you get pre-approved through 2-3 lenders in order to see how their requirements, rates, and the amount you can borrow stack up against each other.
A good lender can save you a TON of money!
Contractor
You contractor can make (or break) any renovation(s) you make on properties as your real estate empire expands.
Unfortunately, it is hard to find a good contractor. The better they get, the busier (and more expensive) they become.
Getting a referral is always a great way to find contractors, but a lot of investors are hesitant to give out the information to their contractor. That is because they don’t want to overwhelm their contractor. This is the “If he gets busy working for you, he may not be able to handle taking a job for me” mentality..
Another fun way to find contractors is to drive by Home Depot at 0600 and see which contractors’ trucks are outside. These contractors are motivated to get to their job sites and also planned ahead for what materials they will need for the day. You can even talk to the Pro Desk later in the day and ask their opinion(s) on the contracting companies you saw in the parking lot. They should be able to give you some feedback on these contractors.
(Mil$ Note: I found a fantastic house painter using the Home Depot Pro Desk method. He has painted my rental property twice, both times for significantly less money than others quoted and the results were superb.)
Second-String Players
Here are some of the additional people you should have on your team.
This list is not all-inclusive, and you can build as big or as small a team as you would like!
Wholesaler
A good wholesaler will be able to feed you potential deals.
The more deals you analyze, the more properties you can purchase. There are various types of deal-finders, but a good wholesaler is my favorite!
Search for phrases like “I need to sell my house fast,” or “we buy houses” on Google. These are some of the key phrases that wholesalers use to target potentially motivated sellers. Most of them will have a spot on their website to be added to their list of buyers. If not, shoot them an email and ask to be added to their list.
Don’t take their word on how much the renovation will cost, or the after repair value (ARV) of the property. Always do your own due diligence!
Insurance Broker
The best advice I can give you for this is to shop around for a good policy.
You could look into an insurance broker and have them shop around for you. Or you could shop insurance policies your own.
Ultimately, you want good insurance at an affordable rate. Just compare a few companies and make a decision.
One additional thing to look into is an umbrella policy. This is an insurance policy that would cover expenses larger than what your normal premiums cover.
This umbrella policy is an overarching policy that covers all of the individual policies you have for each property.
CPA
Nobody likes paying taxes.
I especially dislike paying taxes that could have been avoided!
For this reason, I recommend you find a certified public accountant (CPA) to help you file your taxes. A good CPA will save you a lot more money than they cost.
My CPA does tax planning, which allows me to determine what I can do to maximize my tax return each year.
I have saved literally thousands of dollars every year I’ve used a CPA, and this number is only getting better as I learn more ways to document my expenses!
Systematize
Building a team is very important, but if you want to build an empire you need to systematize everything.
Systems allow you to automate and expedite routine problems.
A good example of this is how I systematized the documents required when I apply for a loan. I used to send tons of emails with all of the documents my lender needed. I would wait for them to request more documents and then find them on my computer and email them off.
This is not efficient at all.
Now, I have a folder on my Google Drive with a folder for 2016, 2017, and 2018 tax returns, as well as a miscellaneous folder. When I apply for a loan, I simply email the link to my Google Drive, and everything they need is in those folders for them to utilize.
This simple trick has saved me a lot of time and frustration, while simultaneously making my lender’s life easier!
Identify your Weaknesses
A good rule of thumb is to automate anything you do more than once. For example, I send an email to all of my podcast guests once their shows are published. I have this email template in my Google Drive, so I can copy/paste this email every time, rather than having to type it out.
I recommend that you make a list of every task you complete throughout the day/week. Then determine which of these tasks you either A) don’t enjoy doing, B) are not any good at, or C) take a long time to accomplish.
I’ll use myself as an example (again). I enjoy editing videos for my YouTube channel. However, it takes a long time to edit a video because I’m not very good at it. For this reason, I have been trying to find someone to edit my videos for me.
Outsource
Once you’ve identified the task(s) that are inefficient for you to continue doing…OUTSOURCE THEM!
You will never be able to scale your time.
Don’t waste time trying to get a little bit better at something you don’t enjoy doing. Find a way to outsource it to a virtual assistant, freelancer, or employee, and then do it.
The more tasks you outsource, the more time you save. The more time you save, the more time you have to work on more important steps.
Your time needs to be focused on the high-value tasks, like negotiating real estate transactions and improving operations to generate more revenue!
TL;DR Building a Real Estate Team and System
Building a team of motivated professionals will make your life much easier. Creating systems to increase efficiency will give you time to focus on building your business.
The more you can streamline your standard operating procedures, the faster you can scale your business!
Along with being able to grow and scale your business, systems allow you to accomplish more with less stress. I’m a huge fan of anything that saves me time, stress, and effort.
Build your team, master your systems, and conquer the world!
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