How to build your real estate dream team
- Author Alan Cowgill
- Published August 30, 2010
- Word count 1,426
While many of you are trying to be a one-man or one-woman show
-- The owner, manager, rehabber, rent collector, bookkeeper, plumber, electrician, and everything else for your business -- a much easier and more profitable way is to build a team.
You don't need to know everything there is to know about everything. If you are not an attorney, find a good real estate attorney. If you really don't like or understand accounting, find a good accountant who specializes in real estate.
It is truly worth the time and effort it takes to have a team of experts to handle the variety of tasks associated with running your business.
How is this more profitable? Well for the hours you spend trying to learn what they already know, you could be out making real estate deals and making money in your area of expertise. I can call my accountant, pay a reasonable fee, and quickly get the right answer. It is absolutely worth it.
What other people might you want on your team? Well how about if I go back to the beginning of my business and see what team members I added as the company evolved.
In the beginning I purchased a course from a real estate guru and started learning about the business. This information was the foundation of my business and I have spent hundreds of hours learning from many of the great real estate gurus. I learned early on that the key to this business was getting a solid education.
- Other real estate investors
Once I decided this was something I wanted to try but was still hesitant to just jump out there on my own, I joined the local real estate investment association. Here I found a tremendous amount of information and support from people in my city and a bunch of great friends.
As I started getting properties it seemed like each had their unique problems. Some had trees, shrubs, and junk that needed to be removed while others had nice yards but bad roofs and so forth. With each new house I added the names of different types of workers. I'd evaluate the work and price of each and choose to keep their numbers handy and add them to my team or keep looking for someone better.
After awhile I was able to walk through a property and see what needed to be repaired or replaced and I would immediately have someone in mind that could do the work.
A couple of early lessons I learned that I want to share with you can help you avoid some pain in this area.
First lesson, what was the skill level should I hire?
At first, 'to save me money', I hired the lowest level of handyman. These are the workers that when you ask them what type of rehab work they can do; plumbing, electrical, drywall, carpentry, etc), they will answer "I can do it all". These are the guys who are not licensed. You can spot them with their old pickup truck with a DBA company name, if any name at all.
Now I guess I'm a slow learner. Took me a couple of years of having material stolen, money stolen, jobs started and never finished, poor workmanship, chasing contractors to get the job finished, being overcharged, etc, etc, etc..
Now what you should do when you meet these folks is run.
Do not hire them...
I finally learned to not hire these folks.
There are roughly 3 levels of contractors. 1st level I just described, the 2nd level are skilled workers, they have some folks working for them and were licensed. The 3rd level is the contractors with the big ads in the yellow pages, big crews and big trucks. The boss never gets dirty.
I learned that I should work with the 2nd level of contractors. They tend to be more competent and skilled than the 1st group, cost more too but the work gets done, plus they are a lot less expensive than group #3 that has to pay for their big yellow pages ad.
In the early years, I'd hire one person to do demolition work, another person to do drywall, someone to do carpentry work of putting in cabinets and hang doors, another person to paint the house. I was writing out a check to buy the carpet and then hire someone else to lay carpet. No more...
Today, I use the Robyn Thompson, the Queen of Rehab, philosophy of writing 7 checks per rehab. Checks are written to electrician, plumber, roofer, landscaper, carpet company, furnace company, and sub contractor.
I need to explain what the sub contractor does. He has a crew of about 10 folks. He gets the trash out of the house along with old sinks, drywall, carpentry work, interior and exterior paint.
Hire higher skilled folks, pay more but the job is done right.
I have lots of people help me with advertising.
When I sponsored a Little League team, the youngsters became my advertising team members when they wore their shirts with my name and phone number on them.
I have a specific person at the newspaper that I ask for because I've worked with them before and they know how I want my ads to appear.
I have a sign company that I've used for years because when I call them, they know what I liked about the last order.
- Private Lenders
Now, at this stage of my business I have lenders on my team who have helped me launch my business to an amazing level.
- Attorney, Accountant, Insurance
Of course, I have a great accountant and insurance person.
I have a number of attorneys. I focus on their specialty, one for evictions, one for closings and a bank of attorneys on retainer for other stuff.
- Office staff
Over the years my company has grown from a file box in my two-bedroom apartment to an office with people to answer the phones, update my web site, schedule my appointments, and take care of many of the parts of the business that I am now too busy to do.
1st position I hired was someone to pay the bills and handle the filing. They came into my home on Saturday mornings and spent 3-4 hours working. Then I got my 1st 600 sq. ft. office and they would work 30 hours per week. Then, in time, went to 40 hour a week job.
2nd position I hired was someone to get tenant/buyers into my empties. They would stage the property with applications, take the phone calls and work with the folks to get them into the property to look at it. I use lock boxes with keys inside so we don't physically show the unit. The tenant/buyers let themselves in the unit. Once we ran credit and they qualified,
I would have them go to the office and the office clerk would work with them to sign the paperwork, change over utilities and give them the keys.
- Staying in Control
To manage your business, you need to do a couple of key things early on. 1st you need to set up systems.
As an example, I setup a day of the week I want all bills paid. What day of the month we invoice tenants. If the tenants don't pay, what are the steps to evict and what is the timing.
These are the start of my systems. Start documenting every step to take chaos out of your business. Then hand these systems off to other folks to run for you and build your team.
The 2nd part of staying in control is getting key reports from your office folks.
I have a number of reports that I get on the 1st day of the month. One is an updated property listing showing what we own. We buy and sell houses every month and as things change
I want to make sure I have clean data.
Another is a rent increase schedule so I can make sure I raise the rent if it's time.
I also get a report on monthly cash flow.
All these key reports will help you stay in tune with what is happening in your business and your team.
I consider all these people as part of my dream team. I take care to keep these relationships strong. A strong team helps me keep a strong and growing business. Start building your team!
E. Alan Cowgill is the owner of Colby Properties, LLC. and President of Integrity Home Buyers, Inc. Since 1995, Alan has bought and sold hundreds of single family and small multi-family investment properties. His home study system, 'Private Lending Made Easy', shows others how to find private lenders for their very own real estate business.
His website is http://www.truthaboutprivatelending.comArticle source: http://articlebiz.com
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