To be a successful commercial real estate investor, you need a good team. If you follow basketball, you will see all the great teams of this era made up of great teammates. Some examples are the 95-96 Bulls in which they won an NBA record 72 regular season games. The reason the team won so many games is the collective effort of the team that each individual played. Yes, of course, having Michael Jordan, the best player in the world, definitely helped, but even with just Michael Jordan, the Bulls couldn’t have put together such a successful season. This is the same for any business venture, including real estate investing.
Your dream team will be made up of other professionals who are experts in their trades, such as:
Real Estate Agents and Brokers
property managers
lenders
ยท Lawyer
CPA
Real Estate Agents and Brokers – When choosing an agent or broker, you want to know that they have a lot of experience investing in apartments as opposed to strip malls or malls. He or she needs to understand financial numbers, why they are a good investment, and why they are not selling you deals based on ‘proforma’ numbers. An agent or broker who actually owns investment property is a must.
property managers – Having an experienced property manager can save you thousands and make you millions over time. Buying an apartment building without a proper property manager is not recommended
lenders – The credit environment is quite challenging these days, with all the consequences of banks and more stringent underwriting requirements. I recommend having a few lenders but also a “go to” lender. Hopefully, this lender has earned your trust on many offers and has proven to be trustworthy and can work. Having a few lenders will also give you the ability to close deals when some lenders just can’t. These are lenders that have strengths and connections that your favorite lender doesn’t.
lawyer – When selecting an attorney, remember to get a real estate attorney. Don’t just look in the yellow pages and select one because that will be the easiest and fastest way to get into trouble. This is one area where you don’t want to be stingy either! You need a real estate attorney who will not only write and review your contracts, but also serve as the executor of your deal and make sure your interests are protected and maximized. Another area this attorney will focus on is the proper use of entities and partnerships. Never start or enter an LLC, Corporation or partnership without proper advice from your attorney. It is always better to be safe than sorry.
Here are some questions to ask when interviewing an attorney. Also use the attached form for your attorney interviews.
1. Ask other successful apartment and multifamily investors who they used. Go to a local real estate investment association (REIA) meeting and get referrals and recommendations from group members. Ask about 10 people.
2. When you get a list of attorneys, schedule an appointment with each one and interview them. Use your attorney interview sheet.
3. Do you own real estate? You are looking to work with an attorney who truly owns and has experience in real estate investing. This is a big difference compared to working with an attorney who doesn’t understand what they are doing.
4. Obtain a list of three referral clients they have worked with who they feel would use their services again. Not all lawyers are for everyone, remember that you are building the team of your dreams, so it is very important that you select people who will play well on your team.
CPA – When selecting your CPA, it is the same process as if you were selecting an attorney. Look for CPAs who have experience in estate tax planning and exit planning. You don’t want to just select any CPA who doesn’t understand your goals and your business. Selecting the right CPA can save thousands and make millions of thousands now and in the future.