Updated: Oct 14, 2021
This blog is written by Jen Josey, Real Estate Investor, and REIGN Coach. She is not a professional writer and writes as she talks so put your red pen away. Jen is extremely opinionated but reserves the right to change her opinion at any time because, well, that's the way she rolls. She may also use colorful language so don't be offended. Jen does not claim to be an expert, she is just sharing her personal thoughts and adding a perspective on investor topics that may benefit her readers. Jen also finds it strange to write in the third person. Enjoy!
I grew up playing basketball. I was never the best on the team but I was a pretty solid power forward, enough to get me on a travel team. My specialty was defense and I could box out with the best of them. No one was getting that rebound if I was under the basket. I was honored to play with some outstanding players through the years, some that went on to get college scholarships at top schools.
I can remember one season, we had this chick transfer to our team from another team. Her offensive skills were amazing, easily achieving the highest score each game. She would dribble up and down that court with authority, blasting past defenders and sinking bucket after bucket. We were undefeated halfway through the season until one game where she twisted her ankle and had to take the bench.
The rest of us on the team were now afraid that without our best player, we were sure to experience our first loss. The other team quickly saw this opening and ran their best plays, shrinking the lead we had over them. Our coach called a time out and I will never forget what he said...
"It's not the team with the best players that win, it the players with the best team that wins. Now go out there and show them why you're winners!"
We went back out to the court with a renewed energy and brought home another win.
I have found the same to ring true when running a business. The quickest way to find success is to create the best team to make you a better player in this business world. Here are 11 players needed to build your dream team.
1. Real Estate Agents
Finding a team of great real estate agents is essential to your investment business. Even if you have your real estate license, you will still find relationships with other agents to be quite beneficial. Every time I meet a new realtor, I let them know that we are always looking for distressed properties. If they are asked to list a property that needs a ton of work, we will buy that property, renovate it, and then have the same realtor list it on the back end. All realtors love the thought of earning double commissions.
If you do not have your real estate license, you will absolutely need realtors on your team to show you properties, run comps, present offers on your behalf, and list your completed projects.
2. Hard Money Lenders / Private Money Lenders
When you are purchasing a property to rehab, you will not fund it using a typical bank loan or mortgage. Instead, one of your options is to use a hard money lender. They are professional lenders, like a bank, that will lend a portion of the purchase price of the property and typically 100% of the rehab costs. Because these are short-term loans, the interest rate is much higher than a standard mortgage. Some hard money lenders will offer better rates the more completed projects you have under your belt.
Another option is to use a private money lender. These are individuals who act as a bank and lend their own money to investors. There is a lot more flexibility with using a private money lender for at times, they may fund 100% of the purchase price and 100% of the rehab. Private money lenders can also lend gap funding, which is the difference in what's needed after an investor uses a hard money lender. This will put the private money lender in 2nd position on the deed causing them to get paid after the hard money lender in 1st position.
3. Insurance Agents
There are TONS of insurance agents out there, in fact, I used to be one. The key to finding a good insurance agent is to choose one that understands you will be flipping properties. You will not be getting a typical policy that regular homeowners get. Be sure to ask other investors in the area who they use. We currently use one umbrella policy that covers all our rehabs. Once that was established, we simply submit the address of our newly acquired property and it's added to our policy. For an extra layer of security, we also add our lender as an additional insured.
4. Coach or Mentor
I can't stress this one enough! When you are flipping houses or acquiring rental properties, why not save time and MONEY by hiring a coach or seeking advice from a mentor? Go to real estate investor meetups in your area or research some online coaching. Even though this is a competitive industry, there are many successful folks out there that enjoy sharing strategies on how they became prosperous. Working with a mentor or coach will save you from making costly mistakes. And remember, if it saves you money, it costs you nothing!
5. Title Agent or Real Estate Attorney
Depending on what state you will do business in, you will need either a title agent or a real estate attorney. As a real estate investor, you will need to find an agent or attorney that is familiar with creative financing, properties that have been owned for a short period of time, and understand that you will cover all closing costs (if that's what you promised your seller). Our real estate attorney knows us so well that every time we schedule a closing with them, they know how we roll so it cuts down on communications and more important, TIME.
Your business depends on having a good team of contractors. Two easy ways to find contractors is to ask the folks at Lowes and Home Depot who are the regulars and approach contractors on work sites. For the latter, it allows you to see a sample of their work. Some contractors you need regularly are carpenters, HVAC guys, electricians, painters, and plumbers. Others include landscapers, roofers, tile guys, and foundation experts, and more. When you work with the same contractors over and over, you start to know their pricing which makes property evaluations tighter.
Establishing a relationship with a bank is so important to build your business credit. It's much wiser to go with a small local bank for there is a lot more flexibility. When you work with these smaller, local banks, you can develop better relationships because you are dealing with the same folks every time. Because they are familiar with your finances and want to build their base of local clients, you have a greater potential to be approved for business loans.
8. Virtual Assistants
We use virtual assistants for a variety of things, mainly for design and marketing. You can find a millennial on FIVERR and spend 10 bucks to get a pretty cool logo. We recently upped our marketing budget and hired a VA through UpWork. For a long time, I thought we were saving money by doing all our own marketing. Now, we pay anywhere between $100 and $500 a month to a guy that runs all of our Facebook ads (not including the actual ad spend). With all the crazy Facebook algorithms constantly changing, that is money WELL spent!
9. Accountability Partner
It took me WAY longer than it should have to realize the importance of an accountability partner. When I first left corporate America to run our business full time, I was overwhelmed with all the freedom I had in my day-to-day activities. I turned off my alarm and was doing whatever I felt like doing each day. I had business tasks to do but took my time getting around to them. After a while, it also became lonely. I was missing the water cooler talk with co-workers. Within a few months, I reached out to some other women in our local meetup group and started having lunch with them every other week. We then started to share our goals. When you write down your goals, you have a 42% higher chance of achieving that goal. When you share your goals with another person, that raises to over 80% chance of achieving that goal. If you want to succeed, an accountability partner can give you that much-needed kick in the ass when you need it.
10. Business Attorney
When you start your business, you will need to find a business attorney to create your legal entity. This is to protect you and your assets from any outside interference or personal liability. You will also establish your EIN or Employer Identification Number which will offer unique tax advantages to investors. It is also good to have a business attorney on your team if you need help with disclaimers or contract verbiage. Our attorney is great in that the first 10 minutes of any call is free. If we have a quick question, we know we will get an answer without him charging us an arm and a leg.
11. Retirement Account Facilitator
Even though you may be acquiring rental properties that will provide passive income until the day you leave this earth, it's also very important to have a financial custodian monitor your retirement nest egg. If you had a 401k at a previous job, you can roll that money into a self-directed IRA so you can continue to invest it and more importantly, grow that money for the future. You can also use your self-directed IRA to act as a private money lender to other investors. A friend of mine created a 9% club where investors lend to other vetted investors, typically just gap funding. One could probably get a higher interest rate but there is confidence in knowing the projects are run by experienced investors.
All of the above team members make up my dream team. I know my success as a business owner is because I have the best team pushing me towards greatness.
If you would like to listen to some blogs narrated by Jen herself, search for "Real Estate Investor Growth Network" anywhere you listen to podcasts.
Now go out there and make it a great day!