The Laurex Process: Strategy Development
Constructing Your Real Estate Success Team
By Barbara Karnes

Successful real estate investors know the importance of building a strong team. As an investor, you become the CEO, the coach of your own success machine. As a leader, you need to pour a solid foundation to support your efforts, and in doing so will find you are now free to do what you do best… locating deals.

Your team will work like a well-oiled machine once you commit to finding the right members. A good team player clearly understands his or her goal is to make sure you achieve your goals. In real estate investing, as with most wealth generating endeavors, building a solid team can be as easy as being:
 

• honest
• willing to ask questions, and
• sure your expectations for each member are clear, and in writing.

By taking the time to build the right team, you are investing in yourself. And, as with any relationship worth its salt, you must be willing to sustain it through respect and recognition. Whether you are new to investing, or simply want to take a fresh look at your wealth machine, there are a few key positions to examine. All are real estate professionals, and include your Attorney, Realtor, Lender, Insurance Agent and Accountant.

Attorney – Your attorney should be experienced in the type of real estate transactions you do, or want to do. You can usually find a good lawyer through referrals from active investors. When you get a short list of possibilities, call them up and schedule an interview. Prepare your questions in advance. Keep the session 15 – 30 minutes in length to demonstrate a respect for the value of the attorney’s time. Be honest when you meet. Explain what you want to do and find out how he or she would handle such transactions. If you are new to investing, say so. Find out how and when you will be charged for services rendered, and who does the work. A competent attorney will expect these questions, so ask away.

A good attorney usually means good title work, too. In New York, it is typically the legal counsel that is responsible for contracting a reputable and reliable title company. Let them. Ask questions if you need to. Learn all you can, but let them take care of the details. That’s why they are on your team.

Keep in mind, you don’t want to train your attorney on how to do creative real estate transactions. You want him to be available, if needed, to help train you. Once you and your attorney are on the same track you should be able to brainstorm to resolve challenging situations. You need an attorney that is going to be a deal maker, not a deal breaker, one who understands the game is to close with a win/win for all, when possible, and one who is willing to work through the unexpected kinks. You don’t want a lawyer who takes one look at your paperwork and says, “This won’t work.” “No chance here,” even before any options have been explored. Bottom line… look around and find an attorney you are comfortable with and one you want to work with.

Realtor – A good Realtor will learn your routine. Let them know you appreciate their work and show them you’re interested in increasing, not cutting their commission checks. They are very good at what they do… listing houses, selling pretty homes using traditional financing. Don’t assume all Realtors understand all of our unique financing techniques, or that they know what a wholesale deal, REO, hard money lender, assignment, or the like are. That’s not what they are taught to do as a real estate salesperson, and that’s not necessarily why they became a Realtor in the first place. Once you understand the training and the payment structure of a Realtor, you can start to relate to them and communicate your needs better.

What they are working for is commission. You need to pay them generously. When you walk into a Realtor’s office, tell them you are a new investor if you are one. Be honest with them about what your purchasing goals are and exactly how you intend to follow through. Be up front and tell them what you expect from them, too. Let them know you value their time, and don’t want them to run you all over town looking at houses. Explain that you want them to provide you with viable listings, occasional comps, and to make offers for you. Be clear and tell them you will be making a lot of offers and many are going to be low. Acknowledge that some people are going to be insulted by your offers and that is OK. Simply say, “If I can put an extra commission check in your pocket each month in exchange for your time investment, is that something you’d be interested in?” If the answer is “Yes,” then you know you’ve found a new member for your team.

Lender – A good candidate should know exactly what you are trying to do and be excited to work with you. You want to have a spectrum of lenders. At a minimum, you’ll want to locate a private, hard money lender, a small local banker involved in the community (and one with whom you may be able to set up a line of credit), and a mortgage broker for you and possibly your buyer’s deals.

At first, talk to all the lenders you can in order to educate yourself about what types of financing is out there. In the end you’ll work with just a few. You may even want to explore joint ventures with other investors who lend money. If you choose to work with friends and family, do it carefully and do it on a deal by deal basis so you don’t end up loosing your relationship over a partnership arrangement gone bad. In addition, whenever you consider a partnership one person should be 100% responsible for providing the money and the other person should be 100% responsible for doing everything else. That’s the cleanest way to assure there isn’t an overlapping of responsibilities or understandings.

Insurance Agent – Find an insurance agent who knows the way investors work. Research what types of insurance is needed in your area for FHA and other types of approval. Then, make sure your agent is able to write a policy to cover that type of situation. You may find your deal is going along fine… motivated seller, locked in financing, clean title, and then, without warning the deal falls through just because you or your purchaser cannot get the type of insurance coverage needed to close the deal. For your deals, have your agent do the homework and take care of any issues in advance. For your purchaser’s deals have your agent available as a back up option.

Accountant – A good accountant and financial advisor can save you a boat load of money by knowing what types of deals you are doing. He or she can recommend entity structuring, profit reinvestment options and tax reportability requirements that work for your specific business plan and lifestyle. A great CPA will be the cornerstone of your ongoing wealth, and often times will work directly with your attorney to explore options that blend their mutual expertise. Don’t scrimp when it comes to finding, and compensating, a solid accountant. And, make sure they keep you informed of all transactions before implementation.

The question that many new investors ask is, “When do I need an accountant?” The answer is simple. When you start asking, you probably need one. The best way to find out is to meet with a few advisors that specialize in real estate accounts. Ask them to answer that question for you. When one does to your satisfaction, you know you are ready to move ahead with adding another member to your success team.

Building your real estate success team will afford you the opportunity to be surrounded by experts in their respective fields. You will have more time to grow your business by being able to delegate essential tasks to other professionals. By paying them what they are worth and providing them with plenty of business, your team members will be happy to work with you, and will bend over backwards to ensure your success. The key is to develop and maintain a relationship with each one. Give it a try. All you have to gain is time, money and relationships that may last a lifetime.