Epic Real Estate Investing - How to Assemble an Elite Team of Professionals | HTH 006 | 474

Episode Date: September 19, 2018

All successful entrepreneurs assemble an elite team! You should do it as well! Learn which 2 key team members you've got to have right up front, when “You can't do it” is equal to “I don't know how,” and why you should treat other investors as cooperators, rather than competition. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terrio Media. Don't wait for appreciation to buy real estate. Buy for cash flow. And wait. In other words, Hold that house. Your host's Matt Andrews and Matt Terrio. Yeah.

Oh, yeah. Got a little air guitar going on here in the studio. Some serious air guitar going on. Flipping houses, it can make you rich. Holding them will make you wealthy, however. This is the Hold That House show. I am Matt Terrio and over there is Matt Andrews. What up, what up?

And before we begin, we've got a free gift for you, just for you, especially for you. Go to hold that house.com and download the four-hour work month, the Ten Commandments to Managing Property Managers. Really, it's the key ingredient to financial independence through real estate that no one is going to tell you about. Not until it's too late at least. Oh, yeah. You should have asked me. Do you hear when people say that? Whoops.

Exactly. Oh, why didn't you call me? I could have... Whatever. And you can get that for free at hold that house.com. All righty. So today, we're talking about, you know... How you should do everything on your own.

That's right. Don't let... The fast pass to success is to try to do everything. Write that down. Stay small, keep it all. And hopefully you can hear that we're dripping with sarcasm as we say this, because that's not true at all. Tell them what we're actually talking about today.

We're going to be talking about assembling your... elite team. Because that's what it takes. It's exactly what it takes. You talk to any successful entrepreneur and, you know, this is a real estate show to talk to any successful real estate investor. And, you know, as successful as they may appear on the outside, they did not do it themselves. Absolutely. They have a team behind them that makes them look really, really good. Absolutely. And that's the great thing about real estate investing and the great thing about being an entrepreneur is that you're not limited by what you are good at, right? You're not limited by your skills or by your strengths, you're limited only by what you can go out and find and the team

members that you can bring in to work with you. And for me, that's really, really good. And like, you guys have heard on another podcast. And me, Matt Andrews and Matt Terry, you've heard the things we messed up when we first started in real estate. A lot of it had to do with not setting up the right team. Absolutely. Absolutely. And, you know, thinking that you can't afford it, right? Or you don't have the time to do it. And in hindsight, you look at like, gosh, I needed to make the time. Can't afford not to. Can't afford not to exactly.

Yep. Thank you for filling that in because I was a little loss. I knew what I wanted to say. But much more poetic, Maddie. Okay, so team member number one, what do we have on there? The first two I want to talk about is, and I want to preface these with, there are really only two places in real estate where you can lose your shirt, where you can lose a lot of money. and I mean if you get these two things knocked out

it's pretty tough to mess this whole real estate thing up and that number one is a contractor you got it they can be worth their weight in gold and they can take all your gold it can be your worst enemy or your best friend exactly absolutely and that is key right absolutely key you've got to if you're going to be fixing up properties the right way that'll be marketable rentals

and you're going to be holding them you got to have someone that knows what they're doing and even if you can do that type of thing, can you do it three houses at a time? No, you can't. You need to have people that can, you know, help create exponential growth for you. And the contractor is really one of the first people

you got to have on the team. Absolutely. And that number two person, you need to get this person figured out too or else you just shouldn't even play this game. And that's property management. Oh, absolutely. Contractor property management,

if you get those two guys in place or women, they, it's really difficult to lose money in real estate. Yeah. It really all of a sudden it makes this, you know, society thinks this is a very risky business. And that's where all your risk is on those two team members. Absolutely.

Absolutely. You hire the wrong person to manage your asset for you, then they're going to kill that asset. Exactly. And they're going to kill your cash flow. And those checks are not going to be what they should be or they may not be there at all. Because the rental is not full. Right. Right.

So yeah, absolutely. Those are two key team members you got to have right up front for sure. For sure. And that's not to scare you. It's just to express to you how important it is and how much caution you should take in selecting those two team members. And it should actually be good news because if you find two good ones or when you find two good ones, boy, it's, you know, it's kind of a cliche, but it is rather smooth sailing if those two pieces are in place. Absolutely.

And we've had so many people, you know, even though we've only done a few episodes, we've already had so much great feedback from people saying, you know, thank you for the Ten Commandments of how you work with, how you train property managers, you know, because they were doing it. wrong and realized they were leaving money on the table every single month. Right. You know, and it's just, it's, you know, it's not rocket science, but they're also not completely intuitive things either. So, you know, I'm glad you guys are enjoying that. For those of you, they don't have it, you know, go to our website and get it because that is a valuable tool.

That's why we give it to you guys, because the property manager piece is so vital to your success as a real estate investor, especially as a buy and a whole long-term cash flow real estate investor. Absolutely. Hold Thathouse.com. Next one. kind of a necessary evil just because I was formerly one and don't have a whole lot of love for them at least most of them and of course if this is you I'm not talking to you uh realters

and agents and brokers you just offended I know I just so much of the audience probably 75% of the audience but uh and what the what I the real I guess the mindset behind those comments that I just made is that most realtors, agents, and brokers are very consumer-related. They're there to help the consumer. They're there to help, you know, Joe and Betty homeowner to find their first home. And they know really only have one way to do it. There are two ways to do it. You better have all cash or you better get pre-qualified with my lender. And we know as investors, if that, if we were limited to that box, there's very little real estate that we could actually do. No, that's true. And if you find a good realtor and they are investor friendly and preferably when you're looking for one to find one that invests themselves, now they can be an extremely valuable member of your team.

And those I like. Absolutely. And that's what I always look for. I'm glad you mentioned that. Whenever I work with a realtor for any transaction, it makes it so much easier if I find and can work with one that owns some property themselves or maybe they're not even buying hold investors, but maybe they've done some. flips or some wholesale deals or something like that. It just, it cuts down your time to train that realtor on how you, you know, how you complete an investment deal, right? And you can almost say that across the board for all of your team members. Yeah. If they invest, that's a big plus. Sure. If your

property manager is an investor and has an ownership type mentality, that's huge, right? Totally. Gigantic. And there are property managers that don't own properties. Of course. Yeah. Plenty of them. Sure. And tons of realtors that have never actually done an investment deal. Yeah. But yet still say, There's tons of real estate realtors that don't have never even bought their own home. It's true. Which is a little scary as well. There's a lot of realtors that have never sold a property. Yes.

Yeah, national average average is one point two a year or something like that. I think so. Yeah. Average license. That's usually do a family member. Let's get off the realtors. Okay. All right. Sorry guys.

Next is a closing agent. Very important. Key. Yes. You know, this is a state, real estate is a state governed and a federally governed practice. And you need a third party closing agent to make sure that you do that correctly. Absolutely.

Absolutely. And a title company or a closing agent that doesn't understand investment can make things a lot harder. That's true. You know, just this past week, I was closing a couple deals in a market. You know, I live in Florida. I was closing a couple deals in Ohio. And I was working with a new title company I hadn't worked with. We were buying them from the bank.

So the bank said we had to use this title company, right? And that bank had just never done, you know, an investment deal before. And I'll spare you all the details. basically said, oh, you can't do that. Right. It's illegal. Yeah. Yeah.

Yeah. Yeah. You hear that frequently. Yeah, you can't. Just that can't be done. Right. That can't be done. And they're like, no, it can't be done.

I did it a hundred times last year. I know. I did it here in this county in this market. Actually, we've done this multiple times. Oh, no. That can't be done. Okay. So the next title company I went to after I told the bank we had to fire them because I

can't close with them. The bank said, okay, we'll choose one other title company. And then if it's okay with us, we'll use it. The next one I went to was a title company that worked with a ton of investors in the area that I knew would know how to do it. It took them 30 seconds to look at it and say, yeah, absolutely, we can do it. I don't know why they would have said they can't do it. So many times when you get a closing agent or a title company or whoever you're using to close your transactions and they say you can't do that, what they're really telling you a lot of times is I don't understand that.

Right. I don't know how to do that. and they're just too proud maybe to tell you, I don't know how to do that. And so they just say, you can't do that. Or it's illegal or whatever it is. So that's really, really key, guys. And you'll get that answer a lot with a lot of professionals

that don't know how to do something. They'll tell you you can't do it when really what they mean is, I don't know how. Right. That's not the right answer. I learned that lesson when I was a kid, actually. I've been ever since then I've just questioned everything. Every time I hear somebody, particularly a professional,

a service provider says they can't do something. Do you remember on TV? Do you remember that? No, I remember that. It was like the big subscription service before HBO. Oh, wait, I think I do remember that. It was on TV. And then I select TV, I think, was the other one.

Those were the two competitors. And it was all done through a satellite dish. And our next door neighbor was like the first person on the block to get on TV. And they had a satellite dish on it. And these were townhomes. So there was a connecting building. It was the same building. And the TV guy came out.

and he went up to the roof and said, sorry, you can't get service here. It was like, wait a minute, the house next door, our satellite dish will only be about six feet away from theirs. Yeah. Could you put it on top of their house? Yeah, exactly. But by the end of the day, we had on TV.

Just because I sat there and watched my dad question. He said, basically told him he was full of crap and he said, no, put it up there. No, it can be done. Do it. Don't be so damn lazy. Right. And just do it. Yeah.

Right. So, okay. boy, we went way off, didn't we? But that's a great lesson, though. I mean, guys, I thought about that ever since. Because especially a lot of new real estate investors, whether you're dealing with realtors or title companies or whatever it is, they get an answer and they think that's the answer. Right.

Most of the time that first answer is not the answer. You know, you get that first quote to get your, you know, to get a roof redone. That many times is not the first answer you want either. What do you do? You go get a second and a third answer. So you get the answer that you like the right answer. Then you move forward. So that's, I mean, just conceptually, that's a big.

and no matter what phase of the game that you're at right now. So obviously a vital team member. Who else we got? So we did closing agent. And when we talk about closing agent, it depends what state you live in. That could be an attorney, could be an escrow officer, or it could be a title officer. Right. Okay.

So if you don't know who it is in your state or how that works, go to a RIA club and ask a fellow investor how it works. Next would be CPA and a bookkeeper and or sometimes they're two different people. Sometimes they can be the same person. but I you know based of reaching off of last week's episode I wish this was the very first person I had put added to my team because it really turned out to be a very painful and expensive lesson a year or so down the road when I had to untangle a bunch of stuff sure especially when you start making really good money and your rentals are performing really well that's when it can become a really big problem when you when you don't have the right advice there absolutely so there you go and then another one is a source of deals. And specifically we're kind of talking about when it comes to team members, bird dogs and wholesalers. So bird dogs are referral sources. For example, one of our guys in Memphis, he works for the city. And he has the job of going around and boarding up all the condemned homes. So he gets

a little notice. This house has been condemned. Go board it up. That's a great bird dog. That's a great source. And there's a bunch of different people in different areas. Maybe the county clerk, yeah, the county clerk. The lady at the clerk office. Sure. Or it could be a divorce attorney, a bankruptcy attorney. Could be a mailman. It drives by the same homes all the time and sees they're vacant. So anybody could be a referral source.

They would bring a deal. So whether it's a wholesaler, that's another investor that does that actively all the time, or whether it's just somebody who's in the right position, like one of those city clerks or something like that, you need those people to bring those deals to you. That's how you find the exclusive deals a lot of times, too, that aren't on the MLS and are kind of off-market-type deals. Mm-hmm.

And then kind of, I could think the big difference between a bird dog and a wholesaler, other than the price that you pay them because it's pretty, can be pretty significant. Yeah. It's really, a bird dog gives you a tip. Right. And a wholesaler assigns you a contract. Exactly. So that they just, the wholesaler just took the extra step and put the property under contract. Right.

One is saying, hey, you might want to go check that out. The other one's saying, hey, I got this thing on a silver platter for you. Right. Right. There you go. Yeah. Love it. Next, you need money sources, lenders.

And there's different types of lenders. There's private lender, conventional lender, hard money lender, the back alley lender. Right, right. A different type of private lender, yes. Right. I was just seeing something when the mob loans you money and you don't pay them back, all they do is break your legs. And, you know, the conventional lender will go ahead and crush your credit score,

take your house, and kick you out on the street. And sometimes that broken leg sounds a little like a better option. Right. Yeah, don't borrow money from somebody who has it in a briefcase in cash and has it connected to their wrist with a hand. handcuff. You know, that's, that's going to be a sign of something right there. But definitely you need lenders. And the biggest piece of lending as real estate investors is that gives us scalability, right? So if we're just working with cash, we're just working with our own funds

and we've got $50,000, you buy one $150,000 cash for a property. That's great. You're free and clear property, but you're done, right? So until you leverage that property with a lender or until you go in with front-in lending, you can't leverage, you can't scale up. Right. And the idea to buy and hold real estate is to get a lot of it. Right. Because we don't want just a little cash flow. We want a lot of cash flow. So scaling up, you're not going to do it without lending in some sort.

So it's got to be one of these. And these are all for different situations and, you know, different types of deals. Hard money lending obviously is a different type of lending for specific types of deal. But one way or another, you've got to have lending to get scalability. Absolutely. Yeah. And, you know, and kind of based a little spin off. of our introduction, you can get rich using your money, but you get wealthy using other people's

money. Absolutely. So a lender is a very vital important. If wealth is your goal. Sure. Okay. Because we don't have to be wealthy. No, if you just want a hobby or something like that, then you don't need one. That's right. You don't need a lender. Okay. And then you mentioned something about banker. What does you mean by that? What's the distinction between banker and lender? Well, just a good relationship with whoever you bank with. So, you know, when I say banker, you kind of think about walking into a bank and talking to the president of the bank, I just mean having a good relationship with whoever you're doing, you know, your banking with. So when you need to close transactions, especially you and I, Matt, when we're buying properties out of state, you know,

and we want to wire money. And we want to take money in. And we need to, sometimes we need to move money from one account to another. It's really important for us to have a relationship where if we had to, most of the time we can just make a wire online and it's pretty easy to do wire transfers. But every once in a while. We'll have some kind of deal that's kind of weird or kind of funky or something will get hung up somewhere and money needs to be somewhere right away. We need to be able to pick up that phone and talk to somebody you have a relationship with, whether that is a local banker or whether you've just established a team member at Bank of America or some giant bank somewhere that you can call to get something done. You need that. Right. Because of sometimes,

especially when you're acquiring distress property, if you don't have that money there at the right time, sometimes that deal has a way of going away and going to someone else, right? And if that's because a wire didn't go through when it was supposed to. And you couldn't pick up the phone and talk to somebody to get it solved. That's on you. You know, you didn't have that relationship. So you lost that deal. So really important to have, you know, good channels with those people that control the flow of money for you.

Super. I agree. Just a sec. 30 seconds, actually, while we chip away at the rent. We'll be right back. If waiting for your investments to grow feels like waiting for paint to drive, there's a powerful secret. Your financial planner doesn't want you to.

know. You can accelerate your investments growth by two, three, or even four times. That's bad news for Wall Street, but great news for you. We're Turnkey Allies, and we'd like to offer you free information that will show you how to take control of your investments and double, triple, or even quadruple their returns. And it's yours for free. For the secret your financial planner doesn't want you to know, go to Turnkeyallies.com. That's turnkeyallies.com. One that's, I think, is tragically underrated, is other investors in your next. network. Absolutely.

A lot of people in the beginning see other investors as competition. Right. And the more business you do, you see it is, you know, a very powerful cooperation. Absolutely. And, I mean, for example, my first multifamily came from another investor who had three multifamilies under contract, but he only had enough money to close on two. So he wholesale me the third. And that opened up a whole new market for me. And it's been very successful ever since.

And if I didn't have that one relationship with a fellow investor, you know, I, my turnkey operation may look very differently than it does today. And I don't know if it would be better or worse, but I have an operation because of that, that one little connection. And I've got multiple stories of other investors ever since. We talked a little bit about one of my students. You know, he opened up the St. Louis market for us and he became the primary source of properties for us. You grew your own. Absolutely.

And through him, we've met a bunch of other investor friends in St. Louis. And now we've got multiple sources of off-market deals there. and yeah, fellow investors. I mean, the bottom line is you don't know what doors another investor is going to open for you, right? So, I mean, it could be somebody right in your same area and the same type of business and they're doing buy and hold real estate too. It could be somebody who just does a lot of wholesaling or a lot of turnkey providing, you know, like you do a lot of with a lot of your buyers. And, you know, whatever, whatever they do, that investor is a window into more opportunities, more possibilities. And for me, especially when I was starting out, I was really good at finding buyers who wanted to buy properties cash, right?

I wasn't as good at finding the properties, right? So I focused more on finding buyers. But what I was able to do was go to other wholesalers in my market of Tampa, Florida, which there were a couple at the time that were really good and always had good properties. I could always find buyers, bring them to that other wholesaler and do what we call a co-wholesale deal. Sure. Right. And those were the properties that a lot of those properties turned into some of my first run. rentals, you know, because I was able to put things together and make some money there and then those

turned into, I rolled those profits into rentals. So that wouldn't have happened. I wouldn't have bought my first few properties had I not done some co-wholesale deals. And I wouldn't have done that if I looked at those other investors as competition. Right. You know, so I've always gained, like you said, so much more cooperating than I have competing. And guys, there are a lot of properties out there. And for those of us that are, you know, really operating at a high level, and for those you listen to this podcast that are really operating, you know, a good business, there's plenty to go around for us. And trust me, we all stand again much more by working together and by sharing resources than we do competing with each other. I found it to be 100% true. Absolutely. I agree.

Last one that we came up with was a insurance provider. Yeah. And, you know, you need insurance. You do need insurance? Absolutely. And somebody again there who works with investors is a great start. So when I am looking for an insurance agent, like when I first moved some of my operations to Michigan, right? And I told you on the other podcast, I told you I had a student that started flipping deals up there. And so I went up there and started seeing what he was doing. I started doing a lot of buy and hold there too. My agent that insured all my stuff in Florida couldn't do Michigan, right? So I was starting from the beginning.

So what did I do? I went and found two or three really successful real estate investors and said, hey, guys, you're here in this Michigan market that I'm in. Who do you use for insurance? I got three referrals. I interviewed all three of them. Boom. It was a couple hour kind of deal. Now I have my insurance provider.

Pretty easy. Yeah. There's a theme here going on. There is. When you're building the team and you're building your business, it's, you know, find someone more successful than you and ask for a referral. Exactly. Ask for help.

Don't be afraid to say, I don't know. Exactly. Right? Absolutely. I love it. There's probably more team members that you could add, certainly, in the smaller capacities, but that's the foundation. Sure. That'll get you started.

That'll keep you going. Well, better than getting you started. And those first two that you mentioned is kind of the two primaries. Go for those first. Yeah. What were those again? The contractor and the property manager. Key.

Absolutely. And the good property manager actually fills in some of this other stuff for you. Absolutely. Some of these other roles, they can in some ways, take on some of those other roles. So it does start there with those two and then you grow your team from there. But make no mistake, you need a team, guys. You need a team. Matt and I have both told you over and over again.

loan wolf doesn't last long in this business. Right. It does not last long. So you need other team members. You need those other investors. You need the other trusted members of your team that will do all the things that you can't or don't want to do so that you can do the things that make you money. Right. Which is finding more great properties that you can buy, fix up, rent out or buy already rented out, and cash flow.

For sure. You know, one last closing comment on this. When you're looking at something like, say you are a kind of. And say you are pretty good at it. Still doesn't necessarily mean that you should do it. What you need to do is evaluate where you are most profitable in your business. And for the most part, it's typically sorting new leads and negotiating contracts. It's probably where you're going to make the most money for your time.

And the one thing that I could, a little practice I use before I delegate something, I was like, a contractor, okay, how much is that contractor per hour going to cost me? and it's, maybe it's 19 bucks an hour, maybe it's $29 an hour. And if I choose, say I found someone for $29 an hour and I chose to do that work

because I wanted to save the $29 an hour, that means you are working for $29 an hour. Exactly. So did you really save anything? You basically just lost money. You lost money by not doing that. And you underpaid yourself. Absolutely.

Exactly. Because you're the heart and the brains of your operation and, you know, you're more valuable elsewhere. and typically in finding new deals and negotiating those contracts. It's about knowing the highest and best use of your time. In fact, we should do a full show just on that.

At some point, how do you get the most out of your time, even if you could do all this other stuff? So we'll do that at a later date for sure. Super. All righty. Well, that's it for today. Flipping houses can make you rich. Holding them will make you wealthy.

We'll be back next week. Until then, don't wait to buy real estate. Buy real estate and wait. Contrary to popular belief, a lack of funding is not the biggest barrier to starting a business. It's excuses. But don't let a lack of funding be your excuse. We are Epic Fast Funding, and we'd like to fund your business with up to $150,000 in revolving credit lines. If you've got 60 seconds on a solid credit score, you could have access to your funds in as little as seven days.

Go to Epicfastfunding.com to fill out our 60-second application. It's fast. It's simple. $150,000 in as little as seven days. Go to epicfastfunding.com. This podcast is a part of the C-suite Radio Network. For more top business podcasts, visit c-sweetradio.com.