Real Estate Investing: Always Have a Back-up.
Over the last years, events have unfolded that have reminded me of an important truism in real estate investing. “Always have a back-up!”
The market is the last couple years is very competitive as you already know it. Many times, where I thought I had a deal locked up to have it crumble before my eyes. Don’t ever stop prospecting for more deals. If you feel like you have something solid don’t stop prospecting to manage that project. Hire it out. Your main role as real estate investor is to continue being the entrepreneur and don’t stop prospecting for deals.
I tell this story to illustrate that it’s absolutely CENTRAL to your business to have back-up plans in all aspects of the business.
I strongly recommend having two or three:
– Hard money brokers
– Appraisers for quick value assessments
– Rehab crew leaders
– Plumbers
– Electricians
– Roofers
– HVAC techs
– Realtors
In fact, have two or three of any trade or profession lined up, ready to spring into action as a moment’s notice. Sure, I have my favorites in each of these areas, but I am striving to have 3-deep hot back-ups in each. Thing happen. Life happens! Be prepared for it.
Don’t stop there. Have back-ups when you rent or sell a property. A property isn’t rented until the rent and deposit (or lease/option fee) is paid and the keys are in the hands of the new tenant. So, encourage back-ups until the money is in your hands (in cash).
I’ve had appointments set up to sign leases, and the potential tenants never show up, no call, and they quit answering their phone. This is despite being hot for the house an hour earlier! If you are in this business long, you will learn that people will disappoint you and they will fool you. So, establish policies and make one of them “it ain’t rented until it’s paid for!”
Encourage back-up offers to purchase. Deals fall through all the time! Take as many back-up offers as you can.
Having back-ups is a mental frame of mind that fits within being a big-picture thinker portion of the Mind of the Real Estate Investor. In addition, rearranging your core team is thinking big and long term. It’s a constant process of improvement and adjustment. This approach is crucial to your business! Apply this principle and profit!
Your Realtor,
Gisela N Sanchez
Assembling your Real Estate Investing Team.
There are several important things you need to be successful in real estate investing, one of which is a great team. I’m going to talk briefly about who should be on the winning team:
- Your Mentor – every successful entrepreneur needs a good mentor. A guide. By training under the watchful eye of one smarter than us, we can only get smarter. Start at your local investment club.
- Mortgage Broker – you want someone who has the experience of working with other investors. They need to be creative and smart!
- Real Estate Attorney – it is important to have someone on the team who can go through contracts, and who knows the legalities of all your moves.
- Escrow Officer or Title Rep- having a good one on the team helps to close deals that much quicker. You always want people looking out for YOUR interests.
- Accountant – Preferably a CPA (Certified Public Accountant). Your numbers guy should also be well aware of the ins and outs of real estate. Come tax time, this is the man to help you through the write-offs!
- Insurance Agent – It is always better having an insurance rep that is looking out for you when things hit the fan.
- Contractor- The good contractor seems like the hardest one to find, but can often make or break your profit margin. You want someone who gets things done on time and under budget!
- Supportive Family & Friends – Having the support and backing of loved ones is important in any endeavor.
- Realtor- To help you with MLS access, determining ARV, and much more.
- Property Manager- someone to watch over your investments
- Great Handyman – Someone to take care of the little things that come up on a daily basis.
Assembling the team will not happen overnight, but once together, they will give you the backing and help you’ll need to make your real estate investing dreams come true.