You Need This Person In Your Real Estate Power Team

real estate investingSuccess in real estate investing depends on the strength of your team. That’s one thing I will always talk about because you need to build your power team and ensure you have the right people on it. Like any business and industry, you are only as strong as your weakest link so choosing a core team of professionals is an essential part of the foundation of your success in real estate.

 

Due Diligence Must Be Done Professionally

One of the people you need in your real estate investing power team is a good property/building inspector. It’s so vital to have a team member that you can trust who can go out and inspect real estate projects for you. Someone who can keep an open mind and an eye to look out for warning signs is invaluable.  This person needs to know what your personal concerns are and needs to look at potential problems, not just today’s problems.

real estate investingThe seller isn’t going to come out and tell you the floor is soft in that spot behind the door or talk about the water leaks that occasionally happen. So it’s important to do your due diligence and make sure you know exactly the condition of the property you are purchasing.

Related: The 3 Action Phases of Real Estate Investing

You need someone on your power team that you can trust to make sure what you are buying is not a lemon. They will look for sagging fills, crawl into the attic for you, check the electrical and furnace.

Keep in mind that there is a very real possibility that they could come out and say the furnace is 100% today but it will die tomorrow. That’s real estate investing (and life) and it’s just the way things are sometimes.

That person on your power team is really important. It’s worth noting that there are certifications in Canada for building inspection and that’s great if you can use those certified people on your team but you may have somebody else that’s as good (or better) just because of experience.

 

Leave It To The Pros

Do not rely on yourself unless you are an expert. Don’t just look at a real estate investing project and go, “Gee, that’s pretty! I think we can acquire that.” You will run into those problems that you didn’t look into (the leaks, soft floors, etc). You need somebody that is prepared to get their hands dirty to uncover issues before you own them.

Are they going to find something? Yes. I don’t believe there is any perfect project out there. Even a new home has some issues. Most people are buying used and there will always be something wrong.

 

Learning Real Estate Investing Lessons The Hard Way

Over the years of real estate investing I was once looking at acquiring a 6-unit apartment complex and the numbers were amazing. I worked those numbers and this project worked everyday, number wise. We had cash flow, easy mortgage, easy acquisition, the tenants weren’t a problem – it was a triple A project on paper. Great location, great community – I mean everything worked out really well.real estate investing

We made an offer and then went out to do the inspection. First, we went to the city and found out it had a number of deficiencies filed there. Then we started to go room by room in this apartment complex and found out there were substantial problems in every single room we went into.

This took us a while.

Related: 5 Real Estate Investing Mistakes You Can’t Afford To Make

We thought we had a gem (financially) so we spent the money to do all the legwork. It wasn’t in our community so we had to fly to do the inspection and by the time we were done, we walked away from the deal.

That was a real estate investing situation where everything appeared perfect but we had to walk away from the deal because of the inspection. As unfortunate as that was, can you imagine how much worse it would have been if we didn’t inspect it?

On second thought, I’d rather not imagine that.

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