Building a Power Team for Success – Part 2
In my last blog post, I shared with you some key people that I have on my Power Team, such as Realtor, Mortgage Broker, Lawyer & Accountant.
However, there are other industry experts that you should also consider for your Power Team that you may not have thought of, such as…
A good insurance broker has access to companies offering the best coverage at competitive rates. Remember that the premium is not the most important factor; you want to make sure you are adequately protected, so depending on your investment strategy, the insurance coverage you need will vary, so work with someone who has experience and understands your needs.
Some essential coverage to consider for landlords: loss of rents, tenant damage, vacancy coverage, and sewer back-up, just to name a few
Contractors & Handymen:
Whether your main investing strategy is flipping, “BRRR”ing (buy-renovate-rent-refinance) or other types of rentals, having a great contractor or handyman that you can trust on your team is key. A good contractor should help you stay on-budget and complete your projects on time, while providing quality work.
When searching for a contractor, referrals, networking events, and local real estate clubs are all good places to start. Ask the contractor for current and previous references, and you can even check out some of their active or previous job sites. Inquire about their pricing, availability and timelines – for example, payments can be pro-rated based on completion of work. You will also want to ensure that they have general liability insurance and workers injury insurance.
A handyman is typically less expensive than a contractor, and can help with small, various tasks that are needed to keep the property running. From patching up a hole, to painting a room, a handyman can help with unexpected repairs that come up or preparing a unit during tenant changeover. Having a trusted handyman on your team to deal with these types of jobs can save you a lot of money in the long run.
Depending on the number of units in your portfolio, as well as your proximity to your properties, you may need to hire a Property Manager. Finding and screening new tenants, collecting rent, and arranging routine repairs and maintenance can be time-consuming, so hiring a property manager deal with these issues can offload some of this burden and free up your time to focus on finding, analyzing and closing more deals.
Personally, I manage some of my properties myself and also use property managers.
Think of your property manager as another local market expert that can help you understand the tenant pool and rental rates in a particular area/neighborhood. They can also make recommendations in value-add improvements to the property in order to attract better tenants.
Property managers can also be an excellent source for finding off-market deals as they may know and work for some tired landlords who are looking to sell.
Some key questions to consider when interviewing Property Managers are:
- How do they get paid? Is it on gross rents charged or collected rents?
- What is their tenant screening process? What do they charge for tenant selection?
- How do they charge for maintenance work? Do they manage bigger projects and what is their fee? How do they get quotes for work needed at the property? Is it done in-house or outsourced?
- What is their policy for issuing Notices to tenants (ex. for late paying tenants or damage done to units or increasing rents)?
Remember, even if you decide to outsource property management, you are still responsible for managing the property manager – no one cares more about your investment than you do!
A wholesaler in real-estate is someone who negotiates and contracts a home with a seller, and then finds an interested buyer to execute and close the deal.
Typically, wholesalers usually get properties that are distressed and need work, and as the buying investor, you need to be prepared to put in a firm offer and accept the conditions/clauses that the wholesaler has negotiated with seller.
Wholesalers are a great resource for getting access to off-market, discounted deals, so it’s smart to get on their Buyer’s List. There are even entire groups on Facebook dedicated to finding wholesale deals.
Referrals and local networking groups are a great place to begin your search. And even if some of the members on your team are not necessarily investors themselves, choose people that are enthusiastic and willing to learn.
Take some time and make a list of who you want to be a part of your Power Team – it will definitely contribute to your overall success!