A good real estate investor needs a good team. There are a lot of moving factors and many team members you can add, but I’m going to cover four key components (with a focus on apartment building). This is what you’ll need to ensure your investment goes smoothly and puts money in your pocket:
1. Find a good commercial lender. It’s a shock to many investors how financing commercially is different from buying primary property. Down payment requirements are higher at around 25%, the amortization table holds higher costs, and the loan itself works differently. It’s not a normal “fixed-rate for 30 years” situation—there are many different options to choose from that do not usually extend as long. These are just a few reasons why you want somebody with a strong knowledge of commercial finance on your side.
2. Set up a company. This is important from a liability perspective. You can set this up with an attorney, or you can contact us and we can help. We typically advise people to set up a company for each individual property in order to manage liability.
3. Get a good property manager. A great property manager is incredibly important because it’s a choice about whether to work or not, earn a passive income or not, etc. A responsive property manager will free your hands from landlord duties, provide you detailed reports, and generally make your life easier.
4. Find the right agent. Not every agent in this world is built the same. Your investment agent is different from the one you use to buy or sell your home. Because you’re thinking critically about investment opportunities, you need someone who isn’t just looking for an immediate sale. This agent will be part of a long-term investment relationship. They’ll need to find the right properties for you, sift through deals both good and bad, and ultimately position you to hit a home run.
There are other aspects of building your team, but these four key components will get you to an ideal launch pad. If you have any questions about real estate or investment, would like to locate people for your team, or need additional information, feel free to contact me. I look forward to hearing from you.