To be a successful commercial real estate investor, you need a good team. If you follow basketball, you’ll 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 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 wouldn’t have been able to pull off 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 the following:
Real Estate Agents and Brokers
property managers
Lenders
ยท Lawyer
CPAs
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 rather than strip malls or malls. He or she needs to understand the financial numbers, why they are a good investment, and they are not selling you deals based on ‘pro forma’ numbers. An agent or broker who actually owns investment properties is a must.
property managers – Having an experienced property manager can save you thousands and make you millions over time. It is not recommended to buy an apartment building without a proper property manager
Lenders – The credit environment is quite challenging these days, with all the consequences of banks and stricter underwriting requirements. I recommend having a few lenders but also a “go to” lender. Hopefully, this lender has earned your trust in 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 does not.
Lawyer – When selecting a lawyer, remember to get a real estate lawyer. 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 you don’t want to be stingy about either! You need a real estate attorney who will not only write and review your contracts, but also serve as the enforcer 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 into 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 a lawyer. Also use the attached form for your attorney interviews.
1. Ask other successful apartment and multifamily investors who they used. Go to a local REIA meeting and get referrals and recommendations from group members. Ask about 10 people.
2. When you get a list of lawyers, make 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 actually owns and has real estate investment experience. This is a huge difference compared to working with a lawyer who doesn’t understand what you are doing.
4. Get a list of three clients for references that you have worked with and who you feel would use your services again. Not all lawyers are for everyone, remember that you are building your dream team, so it is very important that you select people who will play well on your team.
CPAs – When selecting your CPA, it is the same process as if you were selecting a lawyer. 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 you thousands and make millions of thousands now and in the future.