20 Questions to Ask When Assembling Your Real Estate Investment Team
Seasoned real estate investors usually have a full fix and flip team in place. Managing multiple projects at a time necessitates consistency, and investors figure out a flip or two in that one person simply can’t do it all—especially if you want to scale your business.
So it’s no surprise that new real estate investors need to assemble a team of trusted real estate professionals in order to successfully flip houses or build a rental investment portfolio. This team can include: the real estate agent with the market knowledge; the contractor willing to work on your schedule; the CPA or accountant keeping tabs on all the moving financial parts; and the lender keeping you in line with the best options.
Under your watchful eye, this team should keep your business running as close to seamlessly as possible.
But how do you know if these key players can fill their role on your team efficiently? Here are some questions to ask as you consider adding someone to your real estate team, or if you are considering making a change somewhere on your team.
Real Estate Agent
- Do they understand your budget, or are they pushing houses that are outside of your price range?
- Is their market knowledge and ability to interpret comps an asset, or are you having to do more of your own research than you have time for?
- Have you noticed a trend or agenda in the properties they suggest, or are they truly on your team?
- Do they have a network of off-market deals, or are they reliant on the MLS?
- Are they adept at negotiations to get you the best possible deal, or are you having to step in?
- Do they communicate clearly and proactively, or are you having to constantly initiate and ask questions to get the information you need?
- Are they staying within your timeframe and budget parameters, or are overruns the norm?
- Can they handle the job, or are they having to subcontract more than you originally planned, which can heavily impact expenses?
- Have they dropped the ball on permitting, or do they take it seriously?
- Are they responsive and available, or is it impossible to get on their schedule?
- Are they helping you navigate tax advantages of rehab projects and of the different business structures you may consider operating under?
- Is their regular involvement allowing you to focus on other priorities and decisions, or do you lack confidence in their expertise?
- Would you describe them as detail oriented, or do you find yourself having to double and triple check their spreadsheets?
- Have you had difficulty scheduling meetings with them, or are you able to get answers and advice when you need them?
- Do they manage cash flow as well as the ultimate bottom line?
- Do they truly understand your financial goals, or do they just want to extract as many fees as possible?
- Are they current with the latest mortgage options, or are their costs and structures hard to work with?
- Can they work within the timetable of your sale, or have you lost a bid on a property because you couldn’t obtain funding in time?
- Have they offered creative solutions for your needs, thinking outside the box as necessary, or do they stick to what you already know?
- Can you trust them to close when they say, or will they run into problems with underwriting and funding loans?
The Bottom Line
Many people start real estate investing so they can be their own boss, and that’s admirable. But that doesn’t mean you can succeed on your own. You need a team working with you to build your REI business and enhance your profit.
Two final tips:
- You may have more than one partner in some categories. For example, you may have a general contractor and a series of subcontractors or even handyman-type partners. The same may be true with lenders or money managers. Building a network you can call on is a key to continued success.
- You need to build mutually beneficial relationships. Your real estate agent should make more money because she works with you. Your lender should want you to succeed on every deal, so you will come back with the next project. When you win, everyone should win, and vice versa.