How To Buy A Rental Property | Part 3: Building A Real Estate Team


what’s up guys it’s James Allen the
out-of-state investor and today we’re gonna continue with our mini-series and
get into part 3 of how to buy a rental property I’m gonna talk specifically
about building a real estate team because your team is what’s gonna help
solidify your investments and help you grow over the long term
I’ve had the opportunity to build teams in three different markets and I’ve
learned a lot of things along the way which I’ll share with you right now but
before I do that go ahead and smash that like button and push the subscribe
button below if you haven’t already done so with that said let’s get into it
today I want to go over seven different team members that you’re gonna want to
establish relationships with if you want long term success buying rental
properties so let’s start with what I consider to be one of your most
important team members number one real estate agent your real estate agent is
one of your most important team members because they’re gonna help you through
the whole process of buying a rental property now you might be wondering what
makes a good agent it’s a good question and probably comes with a lot of
different answers depending on who you ask but for me what makes a great real
estate agent for investors is the following six things number one they’re
knowledgeable about their local market this one for me is the most important
one because if they know their market then they’ll be able to guide you when
you’re starting off in an area that maybe you don’t know inside and out yet
they may be able to tell you that a house that looks good from a numbers
perspective actually happens to be on that one bad Street that nobody wants to
be on number two they’re responsive they consistently pick up their phone when
you call them or they get back to you quickly if they were busy at the time
this is important because if you find a great deal on the market you’ll want to
move fast I won some great deals before because simply I was the first one to
act on it and having a responsive agent is exactly what made that happen number
three they have great contacts when you’re dealing with great agents they’re
likely to know other great team members as well that they may be able to refer
over to you including lenders contractors property managers and
more this is a big bonus because oftentimes when you go off a
recommendation from your real estate agent it’s gonna be more likely to net
you better results than trying to find those team members online or somewhere
else by yourself number four they know how to evaluate properties you want
someone who can accurately evaluate what the property is worth or what the ARV or
after repair value would be if you were to rehab it it’s also great if they
understand how to run the math on rental properties to help figure out if it
would be a good deal or not but honestly I prefer doing that math myself and I
suggest you get good at running those numbers as well the good news is we’ll
be touching on that in the next episode so be sure to look out for that number
five there are investors themselves this is helpful because they’ll understand a
lot of the nuances that investors are looking for in a deal they’ll also know
that you’re not looking for pretty retail deals with everything already
renovated with all that said keep in mind it’s not the end of the world if
they’re not investors themselves you can train them along the way to help
understand exactly what it is you’re looking for but if you are just getting
started I recommend going with an agent who has rental properties themselves and
understands what a good deal looks like number six they send you pocket listings
pocket listings are basically deals that are not listed on the market and this is
really handy as an investor because if it’s a good deal you’ll have no
competition when good deals hit the market all the hungry first-time
investors or even experienced investors will jump all over it and many times
you’ll see that the winning bid is often too high for it to be a good deal
anymore but if I’m being honest pocket listings are most likely something to
come down the road as you build a relationship with your agent if you’re
dealing with an agent that deals with a lot of investors and that agent is more
likely to pass off the pocket listing to one of her best investor clients
before a newbie that they’ve never closed the deal with before number two
property manager your property manager is arguably the most important team
member when it comes to rental properties and this is because they’re
gonna be the ones managing it day in and day out now you always have the option
to be your own property manager but I prefer to pass it off to a professional
management company so that I don’t have to be bothered with late night
maintenance calls dealing with evictions or trying to fill in vacancies here are six
different attributes that I look for in a good property manager number one
they’re responsive I need a property manager that will pick
up the phone most of the times I call or they send emails back if I email them
about an issue this makes life so much easier and I can’t even imagine how
stressful things would be if I didn’t have property management that was
responsive number two they can evaluate rent prices a good property manager will
be able to give you insight on what a property could rent for and will
normally be a better resource for that information than anything you’ll find
online because they deal with rental properties all the time they should also
be able to send you a CMA also known as a comparative market analysis on any
rental property in your area that you’re considering number three they’re
knowledgeable about their local market if you find a property that looks good
from a numbers perspective your property manager can be a second opinion to your
real estate agent about how an area will fare with renters what type of tenants
you’ll be attracting and any other thoughts they have on the area number
four they have great contacts a good property manager will also have good
contacts especially when it comes to contractors or handyman I actually found
one of my contractors from my property manager and I’ve had great experiences
with the contractor since number five they’re willing to be your boots on the
ground now your agent will serve in this capacity as well but you can actually
get an extra set of eyes on a property that you’re considering the purchase by
using your property manager they will also be able to give you input on things
that may need fixing or updating to help you rent out that property in addition
to coming up with creative ways on how you may be able to save money on the
rehab this can be especially useful when you’re buying a rental property for the
first time number six they have online systems they should have some sort of
online system in place that will show you all the financials of your property
info on any repairs or maintenance perform monthly deposits into your bank
account and give you any other important information on your tenants or
properties that you own number three general contractor reliable contractors
can be some of the hardest team members to find fortunately I’ve
been lucky so far to not run into any major problems in this area but I hear
some real horor stories all the time about contractors and at the same time a
great contractor can really enhance your rental properties whenever you’re fixing
them up and in turn bring a lot of value to the table as you start to scale your
real estate business here are three main attributes that I look for whenever I
hire a contractor number one they’re licensed bonded and insured contractors
that are licensed bonded and insured are gonna cost more than those who aren’t
but it will mitigate your risk overall and protect you in certain situations
for instance if a leak happened during a rehab on one of your properties then
you’d be covered as far as the insurance aspect is concerned number two they’re
open to a pay schedule never pay a contractor everything upfront you want
to pay them in installments for every milestone they achieve on decent sized
rehabs I like to split this up into three or four payments depending on the
size of the job number three they have a good reputation so far I’ve only used
contractors who have been personally recommended to me and it’s worked out
great I want to know that my contractor has a reputation for doing the work
agreed-upon finishing in the time frame that was
decided and that the work that was finished was quality work you can get a
good feel for all of these things by talking with whoever referred the
contractor to you or speaking with other references number four lender having an
investor friendly lender on your team is going to be important a great lender is
gonna help work with you if you advise on how you’ll qualify for financing and
explain exactly which type of financing will work best for you
there are two different types of lenders you’ll come across when you’re buying
real estate mortgage bankers and mortgage brokers brokers will shop
around for you to get the best rates and best terms available while taking a fee
for their services while bankers are the ones who work for the financial
institutions and normally can only offer the packages that their financial
institution offers when I look for a great investor friendly lender I look
for two main attributes number one they have knowledge of
lending programs this is the most important attribute because if they
aren’t knowledgeable in all the lending programs and rules that go along with
them they may be telling you that you won’t qualify when you actually do this
could be the difference of proceeding with a great deal versus believing that
you don’t even qualify to make an offer this becomes even more prevalent the
more mortgages you acquire number two they work with investors this kind of
goes hand-in-hand with the first one and the reason I say that is there are
certain loan products or creative strategies that they’ll use for the most
part when they’re working with investors so if they don’t know basic things like
what the required down payment is on a two to four unit property or what terms
like delayed financing refer to then they’re probably not going to be the
lender that you want to work with in the long term number five accountant an
accountant is the person you want on your team come tax time although they
charge for their services a good CPA can save you way more money than you spend
on their services an accountant can also be great for strategizing with you every
year in advance so that you can make decisions during the year with the tax
benefits in mind and here are three main attributes that I look for in my
accountant number one they specialize in real estate tax law this is pretty
self-explanatory number two they have knowledge of
deductions they should have a vast understanding of all the deductions on
real estate including things like mortgage interest deduction depreciation
or even things like repairs on a rental property number three they invest in
real estate it’s good if your accountant invest in real estate because they’re
going to be more likely to stay up-to-date with all the latest tax laws
that benefit real estate since they have investment properties of their own to
worry about number six real estate attorney a good
real estate attorney should specialize in real estate law you want to make sure
that they’re knowledgeable about things like asset protection that they can
create or review documents for you at an affordable price and evict tenants if
you’re managing your own properties number seven wholesaler
a wholesaler is basically a middleman that finds a seller who’s really
motivated to sell their house at a discount and then links them with a cash
buyer the wholesaler can be a great team member to have and you don’t have to be
limited to just one they can be a great source of deals that are off market and
can be a win-win situation for everybody involved when I connect with wholesalers
I’m looking for the following attributes number one they’re reputable they have a
strong positive history of doing deals in the area with investors it’s even
better if they’ve been referred to you by a seasoned investor you know number
two they’re realistic some wholesalers will try and sell newbies on deals that
sound too good to be true many often overestimate the future rents or even
that after repair value on a property and then they’ll underestimate the rehab
costs that it takes to renovate the property so you need to make sure you
know your numbers and whatever you do never purchase a deal based on
wholesaler numbers number three they bring good deals this is really the
whole purpose of a wholesaler is we want good deals that we can’t find on the
market and the good ones are gonna be able to bring you good deals the key is
to find the good ones because I’d say about 95% of them are not going to be
worth your time now there are other team members you’re gonna want when you’re
investing in real estate such as closing agents insurance agents inspectors handy
men and other team members like that but you can find all these team members by
speaking with your real estate agent property management or local real estate
investors in conclusion these are the seven main team members you’re gonna
want to connect with as you start buying rental property keep in mind that you
don’t need to start off with all seven of these before you buy a deal you can
work up to this point over time the three most important team members to
start with in any market is gonna be your real estate agent property manager
and lender from there they may be able to direct you to more great team members
along the way as you continue your real estate journey as always guys thank you
for watching keep an eye out for the next videos in this series on how to buy
a rental property I’m posting a new video every Friday at 7 a.m. Pacific
time if you enjoyed watching this video do me a favor and like comment below and
subscribe if you haven’t already done so lastly if you want to stay up to date
with me check out my Instagram page at the out-of-state investor thanks again
for watching and I’ll see you on the next one

You may also like...

Leave a Reply

Your email address will not be published. Required fields are marked *