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Have you ever wondered what’s behind the success of ultra-successful athletes or businesses? I’m always correlating sports with business because there are many similarities between the two. In both aspects you have a team pushing to achieve the same goal. You have a captain that leads the team in the right direction. And there are many people involved with all the different kinds of skills, personalities and experience that each player has.
There is something special about how athletes are able to compete at a high level. And this correlates significantly with business. Tiger Woods has a golf coach, personal trainer, sports agent and other staff to help him achieve maximum results and win PGA championships. In hockey you have star players that score goals, goalies that defend the net from the opposition, defensemen who focus on blocking shots and tough guys that get into fights and deliver big hits. The best team wins the Stanley Cup.
Business is the same way. You have many different players that accomplish many different goals. You have sales people that grow the company’s revenue. Then there’s accounting to determine what the numbers are, social media promoters, advertising specialists and graphic designers. And in real estate, you may also have maintenance staff. There are many important roles that help make the company achieve its goals. You can’t be the best if you’re missing any of these skills.
Four players you must have to be successful in real estate
The deal hunter
This is one of the most important roles on your team. Somebody who can find deals is where all the value is. Without deals you can’t build a team, you have no revenue and there’s really no business. This person must be good at relationship building. Including but not limited to making cold calls, cultivating deals and finding a way to expand the business. They’ll be able to multiply your assets under management.
This person also must know all the investment criteria that you need. So that you acquire the deals that are going to help you grow. Not every multifamily real estate deal makes sense or fits the business model. This person may look for deals that are listed on the market, which are typically more competitive with more bidders. This person also builds strong relationships for the long term. You may communicate with somebody that has real estate in their portfolio that may sell immediately or in the future. You have to always stay in front of these prospects and communicate regularly to make the deal come to fruition.
The master underwriter
You need to have somebody that knows how to analyze investment deals. When you look at multifamily properties, you have to know how many units of each floor plan there are, how many square feet, what’s the rent per square foot and how much the monthly rent is. You also have to figure out what other incomes are being collected at the property. There may be laundry income, pet rent, pet fees, late fees, termination fees, forfeited deposits, extermination fees, parking fees and much more.
On top of figuring out the income, you must factor in all the expenses. You have to determine how much the investment costs to operate. There’s a substantial amount of analysis that goes into underwriting real estate. You also need to have somebody who knows how to set up the financing with the bank. And, determine how much equity you need to invest in the property.
A property manager is an important role that will generate revenue for your property. This person will list all of the apartment units and make sure everybody moving in has a high enough credit score to afford the monthly rent. Additionally, this manager will also be in charge of the maintenance staff and ensure that the property is kept up and immaculately maintained. You need somebody in this position that is going to work hard and pay attention to details. Tech skills are a must so rental property software is kept up to date — in order to tell you whose rent has been collected and who needs to be issued a late payment.
The maintenance tech
When you have hundreds of tenants, there’s always going to be something that has to be repaired. It’s inevitable for something to go wrong on a property. When you’re dealing with people, there are always issues such as leaky faucets, plumbing backups or ceiling, window and electrical repairs to resolve. This person will be in charge of going from job order to job order to make sure tenants are satisfied and the properties are well-maintained. This person may also be in charge of grounds clean-ups and making sure the highest quality service is provided to residents.
How do you get started with all of this?
In the beginning you may be doing some of these tasks all by yourself. Once you get started and have enough assets under management, you will be able to spend money that the company generates. You can then hire employees to fill in the gaps for each of these positions. But the first thing you should do to get started, if you’re just beginning, is to find your first real estate deal. You have to find that first deal to take a step forward in the right direction to acquire assets and start building a portfolio. Once you get one deal, then you can start looking for the next one and start refining your system.