Property investors are generally solo practitioners in their field. But that doesn’t mean they only work alone all the time. While investors’ businesses are their own, it takes an effective team to successfully invest in rental and flip properties. We have talked before about how to secure financing, but let’s look at the bigger picture. How can you best go from the initial offer to a completed renovation? Build a great property investment team.
Real Estate Agent
A great real estate agent can help you find the best properties for your project—often before they’ve hit the market. Partner with an agent who understands what you’re looking for, and what your budget is. In doing so, you will be ahead of the game.
In addition to identifying potential properties, real estate agents can walk you through the closing process. This is especially helpful if you are new to purchasing investment properties. As we have discussed in our prior articles, the requirements for purchasing investment properties are different from those for purchasing primary residences. Having a great real estate agent serves several key purposes:
- Remove the burden of understanding the intricacies of real estate
- Guides decision-making based on comps and neighborhood information
- Assists with selling or renting the properties once the rehab work has been completed
When you can rely on a good real estate agent as a member of your property investment team, you can spend more of your time doing what you do best.
Whether you are securing traditional financing through a mortgage, or you are looking for options like private capital or hard money loans, you will want to have financial partners that can guide you to the right options for you. He or she can also educate you on your options, and the pros and cons to each.
If investment properties have a common pitfall, it’s that they can become “money pits” if they have conditions that are not immediately apparent. If you have seen any of the reality TV shows about house flipping, you know unexpected things can happen. A good inspector will go a long way toward identifying possible problem areas at the outset. This will help you decide if you want to move forward with the deal, and if so, whether you need to adjust your offer or your budget. Having an inspector on your property investment team will be invaluable to your overall strategy.
Ideally, your contractor will also be present when your inspector completes his or her walk-through, so you have a quick idea of the repair costs. At the very least, you need a go-to contractor who can quickly and accurately estimate the costs of the needed repairs so you can budget accordingly. Your general contractor also needs to have good contacts for specialists—plumbers, electricians, and so on—for any specialized repairs your investment property may need.
There is nothing simple about the investment property business. But by establishing good partners and knowing where to turn for advice and guidance, you will be more successful. You will be able to focus your efforts on the aspects of your business that you know best while knowing others are looking out for your interests. When you can identify the key people in your property investment team, you will be ready to move quickly when you find the right properties to invest in.