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let’s face it. It would be difficult to become a local expert in every market where you are interested in buying investment property. It takes a lot of time and effort to become an expert in your neighborhood.
You need to build relationships with contractors and real estate agents and learn about zoning, permitting, city ordinances, development regulations and short-term rental regulations—all in addition to constantly staying up to date on your home for sale. The neighborhood
This is time well spent on your business. And investors looking to expand and grow their fix-and-flip or buy-and-hold rental business ultimately realize that building a team becomes critical to sustainable growth. And conscience, of course.
Hiring a CPA, real estate attorney and virtual assistant are great additions to help you organize and operate your business.
But there are seven key relationships you need to develop in order to truly become a local market expert. However, it may not be clear how they can help you.
city and county officials
Why do you need to know the city and county employees who just pass laws, require permits and push deadlines?
Those city and county officials live in a community and care enough for their city or county to participate in the management and development of that community. They also seek out their neighbors. They are not evil, invisible “men behind the scenes” pounding a gavel and finding pure joy in crushing their investment goals.
City and county officials know all about zoning, ordinances, and development. Before you even consider investing, city and county officials can tell you if you’re allowed to do that type of project and, even better, how you can do it. Imagine if you know that zoning and regulations don’t allow short-term rentals, city water isn’t available, or the property next door to your cute little rental home is zoned just for commercial use, then you How much time and money can be saved. use and a Walmart is being built.
lenders
Why do you need to build a relationship with a lender? Will they give you more money if you do?
not likely. But the more types of lenders you do business with, the more business you can do in general. Your lender doesn’t have to be a large national bank. Local banks and credit unions lend money in their communities and can often be creative with their loan options and offer better rates than larger banks. They also know land owners, business owners and people in the community who are looking to buy and sell their homes or those that may be headed for foreclosure.
When you work with multiple lending partners, you’ll be exposed to more deals, especially if you start using creative financing strategies. When you work with private money lenders, transactional lenders, and syndicates that pool money together, you open yourself up to more opportunities. You can form a partnership, gain equity in a project, own a piece of an investment property and grow your portfolio and reputation.
real estate agents
Why would you need to spend time developing a relationship with a real estate agent?
Not all real estate agents work with investors. In fact, even if they’ve worked with investors, it doesn’t mean they have enough knowledge to support your business strategy. You need a real estate agent who only works with investors and is an expert in the market you want to buy.
Not only do investor-focused agents know home values and have access to the MLS—but they also have specialized local data, know how to calculate post-repair value, have access to off-market properties, and have access to all of the have a relationship with. A real estate agent may be the most important relationship in the local market because they are constantly transacting and working with every type of vendor you could possibly need, from contractors to attorneys to title companies to lenders. And of course, up to the buyers and sellers. ,
title companies
Why do you need a relationship with a local title company when title companies do the exact same thing in basically every city?
Not all title insurance companies are created equal. On the surface, it may appear that title companies provide similar services. They are a neutral third party who researches and insures title to a property and helps facilitate the closing process between buyers and sellers.
But, not all title companies work with investors or have experience closing on investment properties where buyers and sellers have multiple strategies. A traditional home transaction usually involves a buyer, a seller, and a lender with standard escrow instructions. Investors often deal with properties that have complicated title issues, not to mention that they also have partners, business entities, creative financing, double closes, different inspection periods, and specific escrow instructions. The documents and amendments involved in an investor transaction can be very detailed, and every deal is different.
You can build relationships with many title companies that know how to work with investors and grow your business with them. In fact, they’ll even call you when they need a credible investor to make a deal rather than let it fall through and disappear with their fee.
surveyor
Why do you need a relationship with a surveyor? Aren’t they just licensed, neutral third-party vendors that cost a lot of money?
Yes, surveyors are licensed and regulated, and the documents they make on a property are recorded, recorded, and become a living legal document. That document protects your investment whether you’re buying or selling because an existing survey will represent boundary lines, improvements, utilities, easements and right-of-ways. It is a legal road map of a property.
Surveyors also know people. They know property owners, neighbors, real estate agents and have personal relationships with city and county employees and officials. They also know what is happening with zoning and ordinance laws and city council and local development projects. They know the history of a city and county and where that city and county is headed when it comes to highways, new businesses, and planned communities.
bulk
Why would you want a relationship with an unlicensed wholesaler who does not actually own the property he is selling?
A better way to define wholesaling is that it is an investment strategy, not just a one-man profession. Wholesaling a deal is one way to buy and sell real estate. And wholesale investors can’t take every deal they come across and often there are deals to pass on to other investors.
And one step further—investors, real estate agents, business owners, or entrepreneurs who would also like to deal in wholesaling want to buy, partner, recommend vendors and contractors. When you do business and build relationships with people who do wholesaling as a career or strategy, you can do more business and get better deals just by helping each other.
other investors
Why would you ever need to be friends or business associates of your direct competitors?
Other investors are your competition and can block your deals and steal your contractors. That’s one way of looking at it, but it’s also extremely short-sighted. Investors who come together have more resources. A new investor can partner with an experienced investor to gain knowledge, and that experienced investor can receive equity or profit in the deal. Some seasoned investors are exiting the market and need to sell properties. Instead of passing on an asset, an investor can pass that deal on to another investor. One investor may be looking to inject cash into a project, while another is looking for funding. The greatest network you can build is with like-minded professionals who can help each other achieve bigger goals and ultimately achieve financial freedom faster.
This article was presented by New Western
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Note by BiggerPockets: These are the views expressed by the author and do not necessarily represent the views of BigPockets.
