How do you go about putting an investment group together? How do you start an investment group to buy real estate? Let's see if we can offer some tips and advice on how to raise money and buy property as a group of partners:
There’s no “I” in team, right? Well, there’s also no “I” in property. When you’re thinking about becoming an owner of an investment property, you’ll need some experts in certain areas to give you advice and assistance. Putting a real estate group together is not just about investors who contribute money, it's also about the team that helps you manage your income generating property.
In the long run, these real estate experts will save you money. That's why putting together an investment group is a smart idea if you're going to buy an income generating property or multiple investment properties over the years.
Think about being a real estate investor as being a jack of all trades, master of none. Although you’re not a seasoned veteran in many of the professions necessary for the proceedings of buying an investment property, you will at least become familiar with them and know what to expect the more you get involved.
Below is a list of the key real estate related professionals you’ll need to call upon and consult with before you make your offer to buy an investment or rental property:
- Insurance agent
- Tax consultant
- Mortgage brokers
- Other investors
- Contractors (for repairs and additions)
- Pest and mold inspectors
- Set up a company
Then, once you own the investment property, you’ll need to figure out if you want to pay for a property management company to manage your property, or if you want to do this yourself. In addition to the assistance provided by the aforementioned professionals, you’ll need to rely on the opinions and/or services from other experts such as plumbers, electricians, landscaping services, among others, unless of course you feel comfortable and capable of performing these types of jobs yourself.
Reminder: Relationships are KEY
Relationships are the key to long term success with investment properties. And the key to building relationships is being friendly and open to suggestions all the time. All you have to do is treat everyone the way you want to be treated, and always assume that everyone has something to contribute, because most likely they do. Everyone has different experiences and skills that they learned over the years, and so do you.
So it’s a good idea to share this kind of information when you can, and in the meantime make some valuable allies. You never know when a seller could become a buyer or a partner in one of your future deals. That’s why it’s important to never burn bridges.
Also, your relationships are your eyes and ears to finding future deals and ways to cut costs. Even if you have no intention of buying a particular property, you might discover a new property management company or an electrician who can become part of your team and enable you to save money in the long run.
For example, you might find a property management company that can alert you of owners who want to sell, or an electrician who can offer you a discounted service if you hire him to work on a number of properties. The important thing is that you keep your options open and grow not just your wealth but also the partners and network you work with.
EXTRA: This video is about flipping houses but it's also about focusing on your niche and putting a team together.