The Real Estate Investing Journey

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What is one of the major keys to succeeding in real estate investing? Focusing your efforts and time on those items that make you money, and letting others handle the rest for you. Suffice it to say that talented people around you will make success much easier, and not so talented people can drag you down and give you bad experiences/lose you money. We have decided that our time is best spent looking for good deals. Rehabbing, property management, navigating the maze of financing are all best left to others.

So who are the key members of your team?

1. A good property manager. This can be the hardest to find, yet the most important addition to your Rolodex. A bad property manager can *really* ruin your day. They will be bad tenant screeners and bad rent collectors. A good property manager will find good tenants who will stay and allow you to sleep well at night. When we buy a house, we want to be able to almost forget about it (we still want to keep tabs on it) so we can concentrate our time and emotions on finding another house. Once you've found a good property manager, don't try to undercut their fees. Pay them cheerfully and they will keep you cheerful. From our experience and from what we've heard from others in the investing community, good property managers are definitely in the minority. Most investors we've spoken with recommend managing the property yourself, perhaps because they haven't found a good PM? Landlording is a skill we aren't good at (yet), so we leave that to those who are good at it and do what we're good at - finding and deciding on good deals. When interviewing PM's ask for (and follow up on) references - if for some reason they can't or won't produce references for you - major red flag. Move on.
2. Mortgage broker. A good mortgage broker will first: tell you how you *can* afford properties. You may need to do some things first, but a good mortgage broker will walk you through the process. A bad mortgage broker will tell you why you *can't* do it. A good mortgage broker will have access to many different sources of money. Example, if most traditional lenders have a limit of 4 financed properties and then they stop lending to you, your mortgage broker will then switch to other sources of money like private lenders (connections, connections, connections). This frees you up from having to be a money/lending expert - you just call your mortgage broker and tell him you're ready to buy another one and let him work out how. Next, a good mortgage broker will charge you less on closing costs, but again cheaper isn't always better. A good mortgage broker will be worth what they charge.
   
3. Buyers/Sellers agent. They may not necessarily be the same person. A good buyers agent is one who specifically works with investors and will help you find your target areas/price ranges/rent ranges etc. They will also help you keep your emotions in check when you walk in those ugly houses and will cheer you on when you can handle it, and turn you away from those houses that will be over your head (can you say foundation splitting in half?) They will be a good negotiator and not be afraid to submit multiple/low offers. They will be patient and work with you because they know that if you succeed, you will come back to them and buy more houses. A good sellers agent is a go getter and actively finds buyers and doesn't wait for buyers to come to them. They are good at selling to the emotions and selling a lifestyle and not just a house.
   
4. A good handyman. If you have a good property manager you may be able to use their handyman, or you may want to find your own who will give you better prices. You want to be able to walk through a house and make a list and turn it over to them and trust them to finish it quickly and do quality work. When you first start using someone you will need to make trips at least every other day (every day ideally) and pop in and see how they are doing. Once you know you have someone good and can trust them, my goal is to make as few trips to the property as possible. Also, and this may just be us, but we do not recommend using a general contractor. All they do is tack on markup to manage people for you. That is your job, you are the manager... save that money. And some GCs really charge handsomely for that service.
   
5. Good plumbers/HVAC/yard people. Always good to have contacts when you need them. And note: cheaper is not always better. You do, however want to find the sweet spot of low prices/high quality.
   
6. A good real estate lawyer. One who invests in real estate himself, specializes in RE practice from an investor's point of view. Perhaps you will need two different lawyers, one for general real estate lawsuit defense issues and one for evictions. If you have a good property management company, you won't need to worry about the eviction lawyer. You do not want to be caught flat-footed if a lawsuit is filed against you.