“How am I going to invest in commercial real estate by myself?”
This is a common question amongst beginner investors, and the good news is that no successful real estate investor works alone.
Simply put, real estate investing is a team sport, and you must assemble a team of experts to win.
What Is A Real Estate Investing Team?
A real estate investing team is a group of specialists who collaborate before, during, and after acquiring real estate assets.
Your real estate investing team assists you with deal sourcing, financing, due diligence, and managing your real estate investments. Having an established team can help you save significant time and money as you build your real estate business. Finding qualified, dependable people is the key to forming a successful team.
Why Should You Build A Real Estate Investing Team?
Every aspiring real estate investor has distinct dreams and goals, but nobody has every skill set necessary to successfully invest over the long haul alone. For example, you may be great at finding deals but don’t know much about commercial real estate law. Or, you may be a great investor relations manager but don’t know much about accounting.
By putting together a team of core team members who are experts in their particular field, you have a better chance of building a successful real estate portfolio. You should consider your real estate investing team members to be business partners who will assist you in achieving more success than you could achieve on your own.
7 Must-Have Real Estate Investing Team Members
When you start building your real estate investing team, the big question becomes: “Who are the key players I need to have on my team?” The seven real estate investing team members that are fundamental to your team include a broker, attorney, insurance broker, lender, accountant, bookkeeper, and property manager.
Here’s more information about each one:
Commercial Real Estate Brokers
Brokers specializing in commercial real estate and operating full-time in the region where you wish to build your portfolio are key. Having a great broker on your team will help you secure more deals faster and with more reasonable prices than having an inexperienced broker or out-of-state broker.
Real Estate Attorney
Having a real estate attorney on your team is easy to neglect because they can be expensive, but a great real estate attorney is worth every penny.
Because commercial real estate can come with dense contracts and negotiation periods that require a unique eye to ensure you’re safe and protected.
Having a great real estate attorney can be the difference between signing a contract that legally binds you into an uncomfortable situation and being saved by walking away from the deal because your attorney caught the complex nuances.
Commercial Lenders and Bankers
Developing ties with commercial lenders and local bankers is one of the most effective methods to ensure you can finance your deals and utilize leverage to your full advantage.
For moderate purchases, local and regional banks are often willing and able to provide competitive terms while being more straightforward to work with, given they’re comfortable with the area. On the other hand, national banks have more money and may be better for significantly large deals, but they can also be more challenging to work with and have more red tape.
Call around, identify a few lenders or bankers you’d want to work with, and then develop relationships. Having good lenders and bankers on our side will help set you up for success.
As with any business, managing your money in real estate is crucial. An excellent accountant to keep an eye on your finances and make recommendations to optimize your financial operations will pay dividends over time.
When you look for an accountant, be sure to look for one who has a lot of experience working with real estate investors. They must understand how to use tactics like cost segregation to optimize all of your tax deductions which makes a big difference in how your money grows.
Your accountant can help you keep track of your rentals and expenses, but a strong bookkeeper will save you time and money with your accountant. The bookkeeper can free up your time by recording all transactions and posting costs and credits income. They can also create financial statements and other reports for you and your team to review to understand your organization’s financial health better.
Property Management Company
Property management is a challenging role. Managing a property yourself while also trying to complete other higher-level tasks for your real estate investment business can be very hard to balance.
By hiring a reputable property management company, you can remove yourself from the property’s day-to-day operations and use your time to focus on more important actions. A good property management company should also keep you compliant with local tenant laws and regulations.
Insurance Agent Broker
All of your investment properties will require insurance, and not all insurance policies are the same or provide you with adequate coverage.
Choosing an experienced insurance agent may save you thousands of dollars and ensure your investments are fully secured. Asking for references from other people is an excellent approach to finding an insurance agent broker.
When Should You Build Your Real Estate Investing Team?
You should start assembling your real estate investing team as soon as feasible. Your team will be instrumental from day one in helping you run your business and successfully acquire great properties. Because of this, it’s critical to have your team in place before submitting a letter of intent on a property.