Blog | Real Estate

The 8 Most Important Team Members You Need Today

How To Build The Best Real Estate Investment Team For Success

You’ve probably heard before, “It’s not what you know, it’s who you know.” This simple premise is the reason why networking is the number one way that people find jobs and clients, and it’s a key Rich Dad principle.

Robert Kiyosaki’s rich dad told him, “Business and investing are team sports.” By their nature, E and S people—people on the left side of the CASHFLOW® Quadrant—operate individually and autonomously. Their own efforts provide them with their own rewards. But B and I people, by their nature, capitalize on the power of teams, which can accomplish far more than can be accomplished by a single person.

Successful real estate investors realize the value of surrounding themselves with experts in a range of areas—taxes, the law, real estate, insurance, property management, etc. When these experts come together out of trust, respect, and a mutually desirable outcome, they learn from and support each other, effectively improving the outcomes and streamlining the process.

Here’s a typical list of advisors and experts that you might want to consider adding to your investment team:

• Real estate brokers: Realtors or other agents are your eyes and ears to the real estate market, so they’re essential parts of the team. They know the trends, they recognize patterns, they know the market, they have access to information you need, and they can tip you off to deals.
• Real estate lenders: These people might be mortgage brokers or loan officers at financial institutions, or they may simply lend money as private individuals. Your lender can tell you what you’re qualified to invest in, and, hopefully, is prepared to support you in your purchase. It’s a good idea to get quotes from several lenders, to be sure you select the one best for you and your situation. On a side note, you may opt to find other sources of investment capital, including friends and family members. Sometimes this is a great solution, but sometimes it ends up making things worse. Money has a way of interfering with relationships. My advice is that if you’re planning to go this route, you spell everything out in writing in a formal document that clearly defines the “exit strategy”—Would you sell the property? Buy the other out?—before you enter into the arrangement. Emotions can heat up during an investment, and it’s a good idea to have a logical, peaceable agreement in place to govern what happens before that emotion overtakes sanity.
• Real estate attorney: Some states and jurisdictions require real estate attorneys to preside over all real estate transactions—the laws vary by location, so be sure you select an attorney who is familiar with the area and type of real estate in which you plan to invest, and who actually specializes in real estate.
• Bookkeeper: A bookkeeper is a valuable resource to have, as he or she will assist you with the day-to-day oversight and management of your books and records. You might opt to tackle this yourself as you get started, but what often happens is that investors quickly realize that they’re spending valuable time on these administrative tasks that they should be devoting to their investment activities. Hiring a bookkeeper is an investment in accuracy, as well as your valuable time, and it is well worth it.
• Real estate accountant: Your accountant will analyze the records that your bookkeeper provides and ensure that your financial records are in order and compliant with the law.
• Tax accountant: This may also be your real estate accountant, but he or she will not only know the law as it pertains to your taxes, but also the tax ramifications and loopholes inherent in real estate investment. A good tax accountant is an invaluable member of your team, and in the case of an IRS audit, he or she will represent you. Ultimately, this person always has an eye toward minimizing your tax obligations.
• Insurance agent: You’ll need to find an agent who specializes in real estate to make sure you have insurance coverage on your properties to cover risks and liabilities.
• Property manager: Although many people manage their own properties, especially as they just begin investing in their first properties, a property manager is a wise investment that can save you a lot of time and money.

As you advance in your understanding of real estate investing and become more successful, your team of real estate brokers, attorneys, CPAs, property managers and the like may evolve and change. You may add team members, or replace members who simply aren’t fitting with the direction of your investment team. And if you decide to branch out into other areas or types of real estate, you may find you need professionals with a new set of credentials and experience. Know too that if you grow to the point where you need a bigger mortgage company, for instance, or a larger accounting firm, you can expect to pay more for those services.

To learn more about building a winning team get my book, Loopholes of Real Estate.