Building a Power Team for Success – Part 1
Have you ever heard the expression Your Network Is Your Net Worth?
I believe that building meaningful and collaborative relationships with others is truly an invaluable skill that can help anyone grow both professionally and personally.
When it comes to real estate investing, building a ‘Power Team’ is a key element to success.
A Power Team consists of a group of professional, knowledgeable, and ethical individuals who are experts in their respective fields and committed to helping you achieve YOUR goals.
Your Power Team can help you with everything from finding great real estate investing opportunities, closing on deals, working on renovations, to managing the property and tenants, just to name a few.
I always recommend that these contacts should have experience in working with real-estate investors and better yet, should even be investors themselves. That way, they have a similar mindset when it comes to investing and know what to look for when it comes to making a deal successful from an investor’s point of view.
So, who should be on your Power Team? Below are some suggestions for various members, as well as things to consider when making them part of your team.
Personally, I have several realtors on my Power Team. I rely on real-estate agents to act as my local market experts in the areas in which I invest, especially when I’m looking in city that can be hours away from where I actually live.
I like to work with investor-focused realtors as they understand that my purchase is not an emotional transaction, but rather more about the numbers and how the property is a good fit for my strategy, goals and overall return on investment. My realtors are also willing preview potential investment properties on my behalf, and present me with opportunities which are aligned with my investment strategy.
When interviewing realtors, here are some questions to consider:
- Don’t be afraid to inquire about how and where they come across new listings, and whether they get any ‘pocket’ listings or have access to off-market deals.
- Find out whether they own any investment properties or whether have experience working with investors.
- Ask whether they specialize in the residential, multi-family, or commercial space; and whether they are typically a Listing agent or a Buyer’s agent.
- You want your realtor to be an excellent negotiator, so ask if have experience negotiating specific and creative financing clauses, like a Vendor-Take-Back mortgage.
While some people prefer to work with a bank directly, I HIGHLY recommend working an investor-focused mortgage broker.
A mortgage agent has access to more lenders than just the major banks, some of which are not even available to the public unless working through a mortgage broker. Mortgage brokers can do the “shopping-around” for you, and negotiate with lenders based on your specific situation. They should also have experience with creative financing solutions, and provide you with access to private and hard money.
A good mortgage broker can also assist in developing a financing plan that will allow you to best scale and optimize your investment portfolio based on your unique objectives.
You want to have a good lawyer on your team to help you close deals. Again, I recommend picking one that is investor-focused, and also values the relationship over billing per transaction.
A good real-estate lawyer should be comfortable in dealing with corporate structures and have experience in closing creative deals, such as multi-lender transactions, Seller Financing transactions, and RRSP/2nd mortgages.
They are also a great resource to use when reviewing other agreements, such as Joint Venture Agreements, to ensure your interests in the deal are protected.
An accountant that is experienced in working with real-estate investors is another member of your team who can help you save money.
A good accountant can help you decide whether or not you should incorporate, and if so, what type of organizational structure you should use. They should know how to maximize tax savings within a corporate structure, and be familiar with moving money through corporations.
They can also assist with future-oriented estate planning, so that you can pass on your assets to future generations in the most tax-efficient manner.
It can take some time to build your Power Team, so I recommend assembling and interviewing potential team members even before buying a property.
To be successful, communicate with your Power Team regularly and don’t be afraid to replace of remove someone – remember, YOU are in charge, so stay focused and choose people who will help you achieve YOUR goals.