One of the most important things you need to be successful in real estate is a Power Team to help you find and flip properties. Building this network of support resources can ensure that you find properties faster, have more available investment funds, carry less risk during the renovation phase, and market your properties more effectively. Here’s exactly who you need on your Power Team to maximize your flipping potential:
1. Your Mentor
Every successful entrepreneur needs a good mentor. A guide. Someone that has been in the business, can help you avoid costly mistakes, and ensure you make the most money possible on each deal. That’s why members of the Wolfpack (Armando’s students) have access to Armando himself.
To truly be successful in flipping and real estate investing you must have a strong team of realtors. Having anywhere from 5 to 10 realtors per market is key to keep a strong pipeline of deals coming in. You should ensure that all the realtors that you work with have a specific place in your system. Listing agents, buying agents, residential agents, commercial agents, REO agents, all of these have a place in a successful flipper’s network. It is also important to be sure that your agents are clear on what you expect from them and how the system works. They may not need to understand all the keys to flipping a house, but they should be clear on what types of properties fit your investment profile. If you are not getting what you need to be successful out of the relationship, be ready to find a different contact!
Every flipper knows that waiting for properties to hit the standard residential market is an excellent way to miss out on a lot of deals. To get access to as many potential properties as possible, it’s important to find other sources for properties than just realtors. You want every wholesaler in the area sending you deals so that you can lock up good properties and free yourself from having to spend time constantly searching for off-market deals. Remember, the more volume you purchase from these wholesalers, the more likely they are to give you a great deal on properties.
4. Real Estate Attorney
Managing risk is essential for any successful business. And you can’t effectively manage risk by getting your legal advice from Google. It is important to have an experienced real estate attorney who understands all of the legal requirements and ramifications in your market to review all of your contracts. Even with the correct asset protection strategies, it is still up to you to ensure that you are operating within the law.
5. Escrow Officer (Title Companies)
Once you have found a prime property to purchase or completed a flip on schedule and on budget, you want to buy or sell the property as quickly as possible. Having multiple title companies ready to process your deals helps you to close deals much quicker. It’s important to choose a title company that is familiar with investing closing strategies so you are not stuck with only one way out. Just like any investor, you want to have multiple exit strategies to avoid backing yourself into a corner.
Just like having a real estate lawyer, you absolutely need an accountant–preferably a CPA (Certified Public Accountant). The right “numbers guy” (or gal) will be well aware of how to apply the tax code to your type of business and should know the ins-and-outs of real estate investing as well as other different types of entities. While you may be able to use some kind of tax preparation software or even break out the old calculator and go to town yourself, it really does not make financial sense to spend your time doing that. Let a professional accountant take care of your accounts and ensure you are protected come tax time–spend your time flipping!
7. Insurance Agent
There are a lot of discount insurance providers out there that just give you a 1-800 number and expect you to do all of the work in the event that a claim must be filed. Just like finding someone to handle your accounts, it is always better having a professional who can apply their expert knowledge to take care of you. Your insurance agent should be the one looking out for you when shit hits the fan. Local insurance brokers will not only find you the best price but will always ensure you are taken care of in the event of a claim. Even better, they handle all the paperwork and you just sign and pay!
The good contractor seems like the hardest one to find, but can often make or break your profit margin. This is exactly why so many flips go awry during the renovation stage. It is right here, at the point when you have the least direct control over your project, that you need someone who gets things done on time and on budget. Just like your realtors, your contractors need to understand your system. They need to give you clear quotes, handle the work without endless change orders, and manage their time effectively. The best contractors are going to create a lot of demand for their services, so make sure you have a lot of quality contractors in your network.
9. Mortgage Broker
Funding is another area where many investors get caught. The last thing you want when you are about to pick up a well-priced property, or want to roll a flip into a cashflow property, or any other investor technique, is to have to struggle to find a useful mortgage broker. You want someone who has experience working with other investors. Someone who is familiar with structuring deals many different ways, who can help you getting ready to close. The right mortgage broker will help you move your properties and help your potential buyers get funding on the sale side of the flip.