Building a Real Estate Team with a Real Estate Investment Mentor

When it comes to real estate investment, surrounding yourself with supportive people and building a talented and educated real estate team is key. Without sharp colleagues and other industry experts by my side, it may have taken me much longer to reach my potential as a professional. If I did not know how to identify the right people with whom to do business, I may not have made all of the amazing business transactions that I have.

And without the best real estate investment mentor, I’m not entirely sure what my success would look like now. I probably would not be as capable of helping you today.

Indeed, building a strong real estate team is a crucial part of the investing process. This is a lesson I learned on my path to success, which has resulted in me gaining more than $300,000,000 worth of real estate, as well as clients just like you all over the country.

Additionally, over time, I have maintained a blog that now includes hundreds of posts that can help you get started with investing today. Below, you can browse a wealth of articles on team building—including posts on the importance of a real estate investment mentor, ways to build your team, common mistakes when forming a business partnership, tips to find the right contractor, and plenty more.

Please explore these articles, and then fill out the form to apply to work with me so I can personally help guide you to your very own successful plan for real estate investing and real estate team building.

The Family Treatment with Nelson Long

The Family Treatment with Nelson Long

Cultivating a manufacturing business that is three generations strong, Nelson Long shares how building a team that lasts is just like creating an extension of family.

 

Family Legacy

In 1986, Nelson Long’s father and uncle set out to create a superior attachment for loaders on farm and utility tractors. Their vision came to life with the production of the Hydro-Jaw 4N1 Bucket, and with it, W.R. Long, Inc. Manufacturing was born. For the next 35 years, they would continue to innovate while establishing a robust dealer network all over the United States.

It wasn’t until 2004 when Nelson came to work at W.R. Long. Today, his father has retired, and Nelson is the CEO responsible for making the decisions to set the company up for long-term success, not only for future generations but for the other employees in the company.

 

A Fresh Perspective

As Nelson stepped into the CEO role, his Christian faith inspired him to think differently about the way he wanted to run the business.

“When my father retired, I made a shift to thinking about my employees like a family,” Nelson shared. “I’m treating my business as a ministry and I do what I can to give them a better work environment and to help them out if they have different needs. We’ve got policies for vacation and things like that, but if there’s a certain situation that comes up, we work with them.”

 

Caring in a Crisis

No more significant situation could have been anticipated than the global COVID-19 pandemic. When faced with keeping his employees safe and healthy but protecting their livelihood, Nelson kept the business intact while ensuring his employees were paid for a full 40 hours per week.

“We broke our company up into two shifts. We had shift A work one week, shift B work the other week. What we were thinking was, if someone got sick, it would only potentially affect half the crew, but not the whole crew,” Nelson said. “We were trying to continue our business. We did that for a while, and I paid them all, still, their 40 hours a week, if they were here or not. And we did not apply for government money, or anything like that, because I felt like it was my responsibility to take care of my employees.”

 

A Thoughtful Approach to Hiring

Over the last 17 years, Nelson has learned many lessons, both good and bad, about growing teams. In reflecting on growing his business to 35 employees, a Dave Ramsey concept has remained Nelson’s single most important piece of advice when it comes to developing his office staff.

“The hiring process is incredibly important, and you should go way, way, way overboard during your hiring process to make sure everything’s just right. I did not do that earlier, and I’m doing that much more now,” Nelson shared.

“Spend way more time in the initial hiring process than you really think you need to. Meet their family and ask them if they’d like to go out to dinner. I’ve taken my wife out to dinner with the prospective employee and those kinds of things to get her thoughts on it also.”

 

Forming a New Team

Nelson began evaluating options to establish financial freedom and diversify from 401(k) and stock market investments in preparation for retirement. In finding syndications, he realized the need to establish a new team, equally requiring comfort and rapport.

“I don’t personally know any of the people who I’ve invested in. So I’ve got to find out, how do I become comfortable with them?” Nelson said. “If the investment is something that I can understand fully, and I understand it clearly enough that I could explain it to my wife, and she can understand it — that’s a go for me. So, if she doesn’t understand it or she’s not comfortable with it, I’m not going to pursue it.”

 

Looking Ahead

The future of W.R. Long is now in its third generation, as Nelson’s son joined the business in 2020 and is learning alongside his father to continue the legacy that was started almost four decades ago.

“I never pushed him to come. I never told him he needed to, or anything like that. He’s a computer engineer and he had a great career, but he didn’t have as much influence at his previous company as he could have here,” Nelson said. “And now that he’s here, I’ve been grooming him to run the company.”

 

About the Author:

Leslie Chunta is a marketing consultant with nearly 15 years of experience in creating dynamic marketing programs and building brands for startups to enterprise organizations. She has worked agency- and client-side with high-growth companies that include Silicon Valley Bank, JPMorgan Chase, SailPoint, EMC, Spanning Cloud Apps, Ashcroft Capital, Netspend, and Universal Studios. www.thelabcollective.com

 

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How to Generate Passive Income

How to Generate $120,000 in Passive Income Working One Hour per Week

Who doesn’t want to work less and make more money? We recently talked with Anton Ivanov, who spends just one hour each week managing his investment properties and makes $10,000 a month in passive income.

But Anton’s business wasn’t built overnight. Below, we’ll share his tips for passive investing in commercial properties.

 

Don’t Be Afraid to Start Small

Everyone gets into real estate investment wanting to make the big bucks, but it’s rarely possible to generate a huge income in the beginning unless you’re fortunate enough to have a lot of start-up capital.

Instead, think about starting small. Start with just one property and then invest in another once the first is doing well. Keep putting money back into investing and eventually you may see exponential growth.

 

House Hacking Can Be a Great Way to Get Started

One of the best ways to generate passive income with little money is through house hacking. House hacking involves buying a rental property and living in one of the units while renting out the others.

You’ll often be able to cover your housing costs and have more money left over to focus on growing your investments.

 

Start with Turnkey Properties

If you listen to any investment advice, you’ll often hear talk of value-add multifamily properties and how much money there is to be made there. However, you may want to start with turn-key properties, especially if you’re just getting started and have little to invest.

Turnkey properties allow you to start renting and generating an income quickly after purchase. Once you’ve made some money, then you can turn to value-add properties.

 

Move On to Value-Add Properties When You Have More Experience

Once you have experience working with multifamily properties and know an area well, it’s time to move on to value-add multifamily properties. You’ll have a good understanding of how the market works and which commercial properties will yield good results. You can significantly increase your income with these types of properties, but you’ll need some money going in.

 

Find the Right Properties

It kind of goes without saying that the properties you choose can make or break you. However, there are a few things you need to consider to help you find the right properties.

Obviously, you want to choose properties in an area where the rent is high enough for you to make a comfortable profit. You’ll also want to look in markets where the economy is doing well, and employment is up. These areas are likely to have lots of people looking to rent.

Try to find properties that are also in areas where the real estate is appreciating. If you decide to sell, you can get even more money, and if the property didn’t make as much as you’d hoped, at least you can make something off the sale.

 

Consider Looking Out of State

If your location isn’t a great place for real estate or rental properties, you may need to look out of state. Start researching to find cities that are medium-sized and going through a growth spurt. If you’re lucky, you can get in at just the right time.

You’ll want to stick to your criteria. Find a place where the rent is high or going up and where property values are on the rise.

 

Scope Out the Area

Once you’ve settled on an area, it’s a good idea to visit, especially when you’re not familiar with the neighborhoods. Things often look one way online and can look quite different in person.

Spend time riding around the neighborhoods and talking to locals. You’ll be able to get a sense of where the best areas are. You can also check out potential properties in person.

 

Network with Other Investors

One of the best moves you can make is to network with other investors, particularly those who are involved in the same type of investing as you and are located in the area where you’re looking to make a purchase.

It’s important to meet with investors in the property area because they’ll be able to give you some good advice about the areas and types of properties that do well. You may see other investors as competition, but you can be much more successful as allies.

 

Find Great Property Managers

To be more hands-off with your properties, it’s essential that you hire great property managers. These are the people who will be acting in your stead, so you want to make sure you get the right people.

You’ll want to start by meeting with different property managers to see who will be a good fit for what you want. It’s not enough to go on another’s word about a manager because what works for them may not work for you.

Once you’ve found a property manager, take the time to train them. Be clear about what you expect and make sure you both agree on everything before you hire them.

 

Hire a Great Team

Beyond property managers, you’ll also need others to help you. Meet with all contractors and anyone else who’ll work on your property. Make sure everyone is on board with your expectations. You’ll save yourself a lot of headaches if you’re clear up front.

 

Research and Take All the Variables into Account

You need to do your underwriting before making the final decision on a property. Do plenty of research and don’t just get your information from one source. You should check online records and reviews and talk to people with experience in the area. If you only go to one source for research, you run the risk of overestimating the potential of a property.

Don’t just look at cash flow and the real estate market when it comes to a property. There are other variables to consider, such as the cost of any renovations and maintenance. What’s the vacancy like? Make sure the profit’s worth it after all of the variables have been considered.

 

Build a Business That Can Run Without You

The key to passive investing is to build a business that can run without you. If you’ve trained your team well, they’ll know exactly what you’d want them to do in every situation. They’ll rarely need to contact you.

After spending some time getting everything established, you can cut down your work time to an hour or less per week. You’ll simply have to check in and manage a few things to keep it running smoothly.

Another secret to building a hands-off business is buying property out of town. You’ll be forced to train a team to put in charge of everything and you won’t be around to deal with every problem that arises. You’ll be forced to be more hands-off.

 

Final Thoughts

If you’re angling for a passive income, commercial investing is a great space to start. There’s always money in real estate and you can get a cash flow almost immediately if you choose the right properties. The keys are to start small, do your due diligence, and build a team you can trust.

 

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Six Characteristics of a Great Leader

Six Characteristics of a Great Leader

When you see the word “leader” what pops into your mind? The President? The CEO of a billion-dollar company? The head coach of a championship sports team? A military general?

Most people have a similar concept of what and who a leader is. Determining the similar characteristics between this archetype can help us as commercial real estate investors build wealth, build a legacy, and do more good in the world.

Brandon Turner of BiggerPockets was one of the featured speakers at BEC2021. In his presentation, he provided the top six characteristics of a great leader, as well as how to become a better leader in your commercial real estate investing business.

 

A Great Leader is a Quitter.

“Find a way to quit your job as soon as possible by paying an expert to do it.”

There is a reason that all successful companies have countless Executives, Presidents, VPs, Directors, Associates, Analysts, etc. under the leadership of one CEO. It’s because great leaders work on their business, not in the business. And running a commercial real estate company is no different.

Sure, when you are first starting out, it might be just you and a business partner performing all the job functions. But a great leader hires expert team members to focus on the day-to-day tasks while they focus on the overall direction of the company. Or in the words of Brandon, “Your job is to be a general”. As a general, you lead the expert soldiers under your command into battle.

A Great Leader is a Cutter.

“Only focus on the one or two things you need to be doing.”

Any job function in a commercial real estate business can be broken down into a “dollar-per-hour” task. Every hour of work on said task results in X amount of dollars of revenue for the business.  Once you have hired expert team members to perform the lower dollar-per-hour activities, it frees up your time to focus on the higher dollar-per-hour activities. In fact, a great leader will focus on one or two activities with the highest dollar-per-hour output.

For example, a great leader will focus on creating multi-year goals for how to scale their commercial real estate company. Then, they may formulate an overall strategic plan for accomplishing these goals. But rather than acting on the strategic plan themselves, they assign the implementation of the strategic plan to an expert team member.

A Great Leader is a Caster.

“Write down the vision for where you want your company to go.”

One of the things Spartan Investment Group attributed to their ability to be named one of the nation’s fastest-growing companies by Inc. Magazine was their culture. A commercial real estate company’s vision is the cornerstone of its culture.

A vision is an image of where the company wants to see itself in the future. It will involve what success looks like to you, your team members, and your customers, as well as the behaviors you will need in your company to realize your definition of success. As a leader, you are responsible for casting a vision that is inspiring to your team members and customers, and you must ensure that you and your team members are living out the vision each day.

A Great Leader is a Coach.

“Ask the right questions to improve the performance of your team.”

In sports, when a team performs badly, the head coach is usually the first person to get fired and replaced. On the other hand, the greatest coaches win games and championships year-after-year, decade-after-decade, even though the team consistently changes. College sports is the perfect example with complete turnover every four years. That is because the coach is one of the keys to success. One aspect of great coaching (and great leadership) is the ability to get the most out of a team.

As a commercial real estate investor, a great way to maximize the performance of your team is to conduct frequent performance reviews – ideally once a quarter. A best practice is to ask each team member to analyze their own performance – what they did well, what projects they are proud of, and what they can improve upon. You should provide them with similar feedback – here’s what you did well and here’s what you can improve on. Then, come up with goals or tasks for how to improve their performance over the next quarter based on the combination of your and their feedback.

A Great Leader is a Scout.

“Find and attract top talent.”

Continuing with the sports analogy: Did you know that the University of Alabama’s football team spent 12.3%, or $2.6 million, of their budget on recruiting in 2019? Strong leadership is just one ingredient to success. The other is the ability to find and attract top talent.

Attracting and finding top talent presumes you know what “top talent” is. According to Real Estate InvestHER founder Liz Faircloth, the two biggest mistakes commercial real estate investors make when building a team are a lack of alignment and a lack of diversity. Top talent must align with your culture (mission, vision, and values) because when they don’t, they tend to get fired or quit, which wastes your company’s time and resources. Top talent also has diverse personalities and skillsets. Another important aspect of top talent is their character. Most skills and competencies can be taught, but character cannot. They are either a good person or they are not. Also, top talent has been successful because of skill, not luck, and a deep dive into their track record is required to determine which is the case.

The most important thing to know about attracting top talent is to make sure you are living out your culture. Don’t say one thing and do another, because top talent who were attracted to your company will quickly quit when they realize you say one thing but do another.

A Great Leader is a Student.

“Recognize you don’t know what you are doing and that you need to continually grow.”

Some interesting statistics: Tony Robbins read 700 books in seven years. Warren Buffet spends five to six hours reading daily. Bill Gates reads 50 books a year. Mark Cuban reads for three hours daily. Why are the world’s richest people reading so much? Because great leaders are continually growing.

Another great way to grow as a commercial real estate investor, in addition to reading, is to ask for feedback. However, due to the “success paradox,” the more success you achieve, the less feedback you will receive from others, which may stunt your growth. Therefore, a tactic to overcome this success paradox is to ask for anonymous feedback from your team using a Google Form. Also, find a few people in your circle of influence (the best would be a spouse or significant other) and ask for candid feedback.

What Makes a Great Leader?

A great leader focuses on the most important tasks and outsources the rest to expert team members.

A great leader casts an inspiring vision for themselves, their team, and their customers.

A great leader helps their team constantly improve and attracts the best of the best.

A great leader is also constantly improving themselves by being a student of their industry and of life.

 

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What it takes to become one of the nation's top companies

What it Takes to Become One of the Nation’s Top Companies

The Inc. 5000 is a list of the fastest-growing private companies in America. Scott Lewis, one of the speakers featured at this year’s Best Ever Conference, is the CEO and co-founder of Spartan Investment Group (SIG). SIG experienced 1,479% growth in 2020, ranking 308th for all industries and 8th for real estate.

In Scott’s presentation, he provided advice on the best practices to implement if you want your business to experience 1000%+ growth and make the Inc. 5000.

Defining your culture

The three parts of your culture are (1) your why, (2), your vision, and (3) your values.

Your culture starts with your why. Why do you do what you do? Why do you go to work each day? Ask yourself these questions and write out the answers. Then, using these answers, formulate a one or two-sentence mission statement. For example, SIG’s mission statement on their website is “to improve lives through real estate.” That is their why. That is why they do what they do. With a company mission statement that reflects your why, you and your team are inspired to show up every day.

The next part of your culture is your vision. Your vision involves where you want to go. To determine where you want to go, you need to understand what success looks like to you. This is more than just a quantitative, “I want to control X dollars in real estate.” It must be a qualitative vision. For example, SIG’s vision on their website is “to build a company where a relentless drive fuels our growth and improves the lives of our team and our investors. To do this, our focus is to provide opportunities for our team to grow and achieve their dreams both personally and professionally. For our investors, we provide only investment opportunities that have been thoroughly scrutinized by our processes. Day in, day out, we work with determination to persevere through every challenge in achieving our goals.”

The third part of your culture is your values. What behaviors do you need to see in your organization to adhere to your mission statement and realize your vision? For example, SIG’s values on their website are summed up by one word, GRITT. That is, growth, respect, integrity, tenacity, and transparency.

Once your culture is defined (that is, you have a mission statement, vision, and set of values), you need to avoid the “say-do” gap. Make sure you don’t say one thing and do another. Otherwise, your culture isn’t believable. Therefore, you must live out your values in order to accomplish your mission and vision.

Developing your plan

With a qualitative vision, you must now set quantitative goals, as well as create a strategic plan on how to accomplish those goals.

To create the best strategic plan, Scott recommends spending 90 days in education mode and another 90 days in development mode before going out and taking action.

When developing the strategic plan, set three overall goals to be accomplished in a three-year period. For each goal, create three to five objectives. For each objective, create at least three key results. For example, one of SIG’s three-year goals is to monetize $250M of commercial real estate with an average margin of 30% and develop $50k of monthly revenue from advisory services. One of the objectives set to accomplish this goal is to build an acquisitions infrastructure capable of nationwide marketing and monetizing 100% of opportunities. SIG has five key results associated with this objective (for example, create a seamless wholesaling process that drives contract to package in less than 3 weeks). Each objective also has a projected completion date and is assigned to a team member.

Overall, you need a goal, multiple objectives for each goal, a plan to achieve that objective, a measure of success, a timeline, and a person assigned to each objective.

Assemble your team

The third piece of advice Scott provided about making the Inc. 5000 list involves how to create your team.

Before finding a partner or bringing on team members, you need to understand your strengths and weaknesses. There are plenty of free and paid personality tests that can aid in this process. However, Scott believes the best way is to ask your circle of influence, like friends and family. The best person in your circle of influence to ask is your spouse.

What you really want to know from your friends, family, and spouse are your weaknesses. Once you know your weaknesses, you know who you need to hire – someone who excels at what you are bad at.

When you start to hire people, they not only need to have complementary competencies, but they must also have your company’s values. You can teach most competencies, but you cannot teach character.

Assuming they align with your company’s values and have complementary competencies, you want to understand their experience and track record. Mainly, you want to know if they were successful due to luck or skill.

How to Make the Inc. 5000

Achieving the massive growth required to make the Inc. 5000 list comes down to your team. However, before assembling your team, you need to create the right culture to attract the right people. This includes forming a mission statement, setting a vision, and creating values. Then, you need to create a strategic plan that aligns with your mission, vision, and values. Once this foundation is set, you can assemble your team, focusing on people who align with your values and have complementary skill sets.

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Four Step Process to Build a Powerhouse Commercial Real Estate Team

If you were lucky enough to go to the Best Ever Conference 2021, you may have watched the Real Estate InvestHER presentation by Liz Faircloth. During the presentation, Faircloth covered the best insights into how to build a team for real estate investing. It was an amazing look at just how easy it can be to invest in real estate as long as you do everything the right way. Through four simple steps, you can take control of your financial future, build your nest egg and create a strong real estate team.

How to Build a Real Estate Team

On average, commercial properties generate an annual return of 6 to 12 percent. If you invested in a $1 million property, then you can expect returns of $60,000 to $120,000 per year. This rate varies based on the area, but it is much higher than the average return of 1 to 4 percent that you can get from a single-family home.

In order to achieve a great return from commercial real estate investing, you need help. Buying properties, collecting rent and analyzing balance sheets take time and effort. To make sure your real estate empire is a success, you need to build a strong team to support your investing decisions.

1. Map Out Where You Want to Go

Where do you plan on going with your real estate investments? Are you trying to increase your annual returns? Do you want a property that appreciates a lot?

Before you can build a team or make an investment, you have to know what you want. You should sit down and create a list of short-term and long-term goals. Basically, you need to create a vision and mission statement. Once you have a clear idea of where you are going, you can figure out the best steps for getting there. You can also look at the things that are currently holding you back and change them.

In general, you should always use SMART goals for your business and your future team.

  • Specific: You have to know what you want, or you will not be able to achieve it. Your goal should include what you want to accomplish and why you want to accomplish it.
  • Measurable: If your goal is to get a return of 9 percent, you can easily measure your results and see if you were successful. The best goals can be easily measured so that you can know if you are successful or not.
  • Achievable: While deciding to become the leading investor in the world sounds great, it probably is not an achievable goal. If a goal is impossible to do, you will become disillusioned. Instead, you should focus on making goals that are realistic and attainable.
  • Relevant: Good goals are relevant to what you are doing. They are also achievable based on your current resources and abilities.
  • Time: You need to make time-based goals because deadlines are great motivators. A deadline gives you something to work toward.

2. Take a Personal Inventory

Next, you need to take a personal inventory of where you are at. Before you can figure out how to build a team, you need to consider your resources. What kind of credit do you have? Do your assets outweigh your liabilities? In order to hire someone, you should initially figure out what you can afford.

You should also consider your personal traits. Your personality, experience, skills and leadership traits determine whether you can successfully hire and train employees or not. What do you bring to the table?

This personal inventory is also useful because it is a chance to learn more about yourself. For example, you can always take a leadership class if you need to become a better leader. If you lack accounting skills, you can make sure to build a team that includes an accountant.

Ideally, you should spend at least half a day taking a deep look at your personal inventory. Before you hire someone, you need to know which areas you excel at and which areas need work. Then, you should pick team members who balance out your strengths and weaknesses.

 

3. Determine Who You Need to Meet Your Goals

Now that you know what you excel at, you can focus on bringing in a team that helps you achieve your goals. You should figure out which roles you want to fill and how you fit into the team. This means you have to be realistic about your strengths, personality traits and experiences.

While every team is different, the following is an example of what your team structure could look like for commercial real estate investing.

  • The Hunter: This person is in charge of acquisitions and looking for properties.
  • The Brains: The brains of your operation will handle planning.
  • The Money: This individual will take care of funding your projects.
  • The Hammer: The hammer is the person in charge of execution. They handle all of the negotiations.

4. Focus on Gaining Alignment and Leveraging Diversity

Two of the biggest mistakes investors make when building a team involve alignment and diversity. Your organization has a certain level of entrepreneurial spirit. Additionally, your employees are expected to meet certain expectations and goals. Because of this, you have to hire someone who is aligned with your values.

Someone may look great on paper, but they will not stay long if they are not aligned with your organization. When someone does not fit in with the organization’s culture, they tend to quit or get fired right away. Instead of wasting your time and resources on the wrong applicants, look for alignment as you build your team.

You also need to build a diverse team because diverse personalities and skills provide balance. As you interview people, consider their experiences, levels of risk tolerance and personalities. Then, you should try to hire team members who give your team diverse points of view.

It is almost impossible to understand someone’s complex personality and background in a single interview. Fortunately, there is an easy tool you can use instead. Personality assessments are a quick, simple way to understand an applicant’s personality. As you read through the personality results, you should avoid hiring people who are just like you. Many managers make this mistake, and it will reduce your team diversity if you are not careful.

Learning how to build a team is important if you want to be successful. As your commercial investments grow, you will not be able to manage everything on your own. Through a strong team, you can become better at commercial real estate investing and increase your profitability.

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Three Secrets to Finding a Commercial Real Estate Mentor

If you are new to commercial real estate investing, it is generally in your best interest to find a commercial real estate mentor. This person can help you learn more about different investing strategies, help finance large transactions or provide general advice to help you avoid making rookie mistakes. Let’s take a look at some tips for finding the right person to serve as your coach, guide and confidant.

1. Find Someone Who Shares Your Vision

Ideally, your commercial real estate mentor will be someone who shares your overall investment philosophy. For instance, if you prefer to be a passive investor, it is important to work with someone who understands how to maximize returns without having to make too many decisions.

Your mentor may highlight the benefits of hiring a property management company to find tenants, handle maintenance requests and collect the rent each month. He or she may also teach you about private placements, real estate investment trusts (REITs) and other investment options that may help to meet your needs.

If you want to be an active investor, a mentor may suggest that you buy properties close to home as they will be easier to manage. This person might also give you tips about how to improve a property without spending too much time or money doing so.

It is also important that you work with someone who has roughly the same amount of money available to invest in various properties or trusts. Doing so ensures that the advice that you receive is relevant to whatever strategy you’re trying to execute.

Regardless of what your goals, risk tolerance and timeline is, make sure that you work with someone who shares your values. If this person isn’t in the commercial real estate investing game for the same reasons that you are, he or she might not provide you with the insight that you need to be successful.

 

2. Look for Someone Who Is Still an Active Investor

Your mentor should be someone who still buys office buildings, multifamily homes or warehouses. While a former investor may be able to teach you about the various types of investment opportunities, this might not necessarily help you when it comes time to close on a deal.

As with anything else in life, there is a huge difference between what you learn in the classroom and what actually happens in the real world. Perhaps the biggest difference between theory and reality is the impact that your emotions can have on your ability to make the right deal.

It isn’t uncommon for newer investors to want a property so badly that they will pay more than it is worth. Furthermore, investors may buy properties without inspecting them or taking other steps to protect themselves if an unexpected problem arises. Aligning yourself with someone who regularly buys and sells commercial assets may make it easier to learn how to manage your emotions.

Additionally, working with someone who is still active in the commercial market is important because you want to work with a person who understands today’s market conditions. For example, it’s important to know that forces such as rising interest rates, a sluggish economy or societal changes in the aftermath of the coronavirus pandemic can play in making a successful investment. Only someone who is currently in the market can provide the context needed to help you determine which deals make sense and which deals don’t.

 

3. What Can You Bring to the Relationship?

In any successful relationship, both parties benefit from having the other in their personal or professional lives. Therefore, it is important that you are able to provide something of value to the person who is tasked with setting you up for long-term success.

For instance, an established investor may choose to work with you because of your knowledge of how younger people think about real estate. In the 21st century, small businesses have abandoned formal offices in favor of shared workspaces. These shared spaces allow individuals from various companies to network and create ideas that can help their companies flourish.

Helping your mentor understand how the market may be evolving can help that individual make better decisions about his or her portfolio. In addition to your views on modern business trends, you may be able to provide value to an established investor by offering access to social media contacts or others in your network.

It can be much easier to be a profitable commercial real estate investor if you have someone who you can lean on for support. This person may be able to help you control your emotions, anticipate changing market trends and offer other advice that can help you grow your money in a timely manner. Ideally, you will spend time talking to several prospective mentors before choosing someone to work with. Doing due diligence can maximize your chances of finding a partner who can help you fulfill your goals.

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Rich Fettke on Supercharging Remote Teams

Real estate is a high-touch business that must now adapt to working remotely. If you want a more effective team or professional network, real estate investor Rich Fettke has actionable insight for you. Rich is co-CEO of Real Wealth Network and took his company completely virtual almost ten years ago. As a guest on the Joe Fairless Best Ever Show podcast, Rich offers tips on building a happy and motivated remote team.

About Rich Fettke and Real Wealth Network

Rich Fettke is co-CEO of Real Wealth Network, an educational and referral service for the passive investor in single and multifamily properties and other opportunities. He brings a strong track record in business and personal coaching helping entrepreneurs grow their businesses.

A turning point came when Rich was diagnosed with terminal cancer. He and his wife, Kathy, scrambled to plan their children’s futures should the worst happen. After much research, Kathy determined that real estate investing was the path to financial security.

The diagnosis was overly dire, and Rich survived cancer. Inspired by Kathy’s research on income generation, the couple founded Real Wealth Network to help friends learn to invest in multifamily and other real estate. The company has grown to include brokerage and syndications operations that offer opportunities for passive investing.

Rich develops teams and systems for his 25 employees, all currently working remotely. Here are his must-haves for a dynamic remote team.

Define Your Culture

Some business areas need pruning during tough times, but your company culture is not one of them. If Rich Fettke has one key takeaway for you, it’s this: “Be sure to determine your core values and use them as hiring criteria.”

Know Your Core Values

Almost every company lists impressive-sounding values and claims to honor them. But when pandemic constraints or other hardships test a business, the truth reveals itself. You must commit to executing on your values every day and holding yourself and the rest of your team accountable.

Here are some of Real Wealth Network’s values that translate directly into actionable tips for remote work.

  • Integrity
  • Transparency
  • Connection
  • Accountability

Get your team’s input and buy-in on the company core values. Employees are more dedicated and self-directed when they feel some cultural ownership.

Hire to Your Core Values

An employee or partner is either adding or subtracting value. No matter how alluring a candidate’s profile, he or she will compromise your team if core principles are misaligned. Even a passive investor can impact your network’s wellbeing.

Rich suggests including core values in your interview questions. Tell candidates one of your values and ask them to walk you through a scenario when they had to act upon that value under pressure. What was at stake, and how did they handle it?

To help vet leaders, Rich also asks prospective employees how they would manage others in light of those values. If your team member fails to deliver, how do you address that? If your ordinarily effective peer is dropping the ball, how do you intervene? These spontaneous answers can reveal a lot about a candidate’s values, strengths, and fit for your unique team.

Lead with Values

After you document your core values and refine your hiring process, the hard work begins. Each day, your remote team has to show up and live those values virtually. Unlike when working onsite, the in-person feedback and social cues that help keep us on our toes are lacking. Subtle employee behaviors or oversights are also easier to miss. Your remote team must understand behavioral expectations and the exact consequences of falling short.

Expect Integrity

You’ve probably known quality employees who were let go with seemingly no warning, or perhaps experienced this yourself. Rich explains how Real Wealth implements the three-strikes rule transparently so that everyone is clear on accountability. This approach avoids the murkiness that often surrounds many companies’ evaluation process, especially in remote environments.

As a manager, you hold a one-on-one with the employee having the issue, advise this is strike one, and explain why. You make sure the employee understands and can repeat it back. You reiterate the three-strikes rule and that a third strike means termination. If employees gain a third strike and are terminated, they almost always admit responsibility and a lack of enthusiasm for the job.

In contrast to giving three chances, don’t be afraid to jettison employees who consistently violate integrity standards. Everyone has an occasional off day, but people who don’t meet your company’s ethical standards need to move on.

Show Transparency

You want to set up transparent systems and processes and encourage open, honest communication. It’s essential to let your team know the metrics evaluating their behavior. Rich shares that at Real Wealth, flagrant integrity violations merit instant dismissal. Breaking the core value of connection by being rude, on the other hand, might call for three strikes.

Gossip and complaining might be a little tougher on a remote team but still occur. Rich and Kathy decided that transparency meant no behind-the-back talk, however seemingly innocent. When you don’t interact in person, it’s easy to blindside employees with poor feedback after it’s too late for them to correct deficits.

In a rush to execute under pressure, businesses sometimes skip transparency basics such as creating an organization chart and job roles. Even a real estate investor with a small team will benefit from organizational clarity. It’s especially important to document in a remote environment, as the days of yelling a question over the cube wall are over.

The documentation should be concise, visual, and stored in an accessible central location. Your team members need to know:

  • What’s expected of them
  • The performance metrics
  • How to get help
  • How much problem-solving ownership they have
  • Who the managers and experts are

In a unique spin on visioning, Rich suggests creating an org chart for your business as it will be in five years. As your company grows and you fill positions, you’ll be encouraged to replace your photo with those of hires who can do their roles better than you can.

Build Connection

Effective systems encourage people to connect in productive and enjoyable ways. You want to avoid typical group time wasters, such as unnecessary meetings.

Rich and Kathy hold quarterly all-hands meetings to communicate important news. This “state of the company” address covers accomplishments, financial performance, profit sharing, and upcoming changes.

When conditions permit, Rich believes in the old-fashioned company retreat for much-needed team bonding. At the yearly three-day event, team members focus on what went well and not so well, what they learned, and the roadmap ahead. They also celebrate each other’s accomplishments. This in-person time builds relationships that help power the group through the rest of the remote year.

Accountability: Rock Your Team Mindset

If you work remotely, it’s easy to fall prey to distractions or a sense of disconnection from the company mission. Real Wealth met this head-on by implementing the Entrepreneurial Operating System®, or EOS, a holistic operations toolkit for smaller businesses. This method sets specific expectations for employees, helps them focus on the bottom line, and gives them ownership of results.

If you’re wondering which system Rich uses to track employee progress, his answer is rocks. Each team member has three to five “rocks” that represent quarterly targets. Rather than micromanaging employees, managers tell them, “Here’s your rock.” The employees own delivering results.

To make quarterly targets more tangible, people can place actual rocks in jars on their desks. That visual reminder of what’s essential helps them prioritize work and minimize distractions.

Another strategy is to partition teams under leads who can work closely with the smaller group. This model promotes individual accountability and open communication.

Run Lean on Tech

The right platforms for your business enable remote collaboration without intruding. How do you balance tech need and overhead?

For starters, Real Wealth doesn’t always meet over video. Skipping the virtual face time cuts down on complexity and that angst of having to look good on camera. The company holds a monthly all-hands meeting, and teams hold weekly meetings. Most video calls involve screen sharing but no distracting faces, allowing attendees to focus on the well-structured agenda. The monthly meeting is an opportunity for people to see each other and connect visually.

After grappling early on with tech overkill, Real Wealth now leverages a few platforms with high returns. For project and portfolio management, Rich and his team use the tried-and-true Basecamp. To help manage meetings and follow-up items, they use Ninety, which implements EOS principles. GoToMeeting and Zoom are favorites for video calls.

Your Turn

Remote teams are the new social business climate. Even if passive investing, you want to mind your business relationships actively. Use Rich Fettke’s experience to help you hone your professional core values and processes. You will enrich your team or network on all levels.

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Should You Partner Up With a Friend to Create a Real Estate Business?

Let’s say that you and a friend both become aware of and interested in investing in real estate around the same time. You both begin attending local meetups together, reading books, listening to podcasts, evaluating the market, and reaching out to various local real estate professionals.

Then, the time comes where you are both ready to invest in an actual deal.

Now, the question is: should you go out, create an LLC and do deals together?

From my experience, the answer is unequivocally no.

You don’t want to go all in with a friend – or really anyone – when you are initially starting your real estate investing career. The way people act in the context of a friendship may be entirely different than the way they act in a business relationship when their money is on the line, which is entirely understandable and expected.

However, this doesn’t mean that you cannot do deals together. Rather than immediately creating an LLC together, the less risky approach is to create separate LLCs.

Your LLC will own a portion of the deal and your friend’s LLC will control the rest of the deal. Continue to use this approach for a full year to make sure you can work together effectively.

After the year-long test period, ask yourself the following questions about how things went:

  1. What are they like as a business person?
  2. How do they handle any challenges that arose?
  3. What type of character do they have?
  4. How did they react to mistakes that were made by either them, you, or a member of your team?
  5. What did they prioritize more, themselves or the deals?
  6. What is their communication style?
  7. Did they put forth more, less, or an equal amount of time and effort as you?
  8. Is this someone you can envision yourself creating a long-term business with?

Again, whether you are long-time friends or merely acquaintances, you cannot know how they will handle important business decisions, disagreements, or issues until you actually experience it first-hand. Rather than jump into a business marriage, test the waters by dating for a year.

I see the following scenario happen time and time again: someone learns about the power of real estate investing. They read all of the books and blogs, listen to all the podcasts, and even attend in-person meetups and conferences. They learn the ins and outs of their market. They learn how to evaluate deals. They reach out to real estate agents or brokers and begin to analyze on-market deals. Maybe they even send out a direct mailing campaign. But, after going through this process for a few months or a year, they realize that securing a deal isn’t as straightforward as the books, podcasts, conference, etc. made it out to be. The is officially honeymoon phase is over. Over the course of the next few months, they put less and less effort into finding deals until they stop entirely.

If you were to go all in with this person from the start, you would have wasted an entire year spinning your wheels, just to be back in the same situation you were in before you partnered up – with the exception of maybe having less motivation after not doing a deal for a year. Even worse, you do a deal together and this “friend” disappears in the middle of the business plan or does something to jeopardize the deal.

Forming a partnership is a great way to quickly and effectively scale a business. But it needs to be the right partnership. When considering partnering up with a friend – or anyone – don’t immediately go all in. Instead, keep things separate by creating individual entities or by doing deals individually for at least a year. At the end of the year, if this person is still there, answer the 8 questions outlined above to determine if it is worth officially partnering up or if you should both go your separate ways.

 

Are you an accredited investor who is interested in learning more about passively investing in apartment communities? Click here for the only comprehensive resource for passive apartment investors.

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How to Successfully Scale Your Real Estate Business

Building a real estate business from the ground up is certainly an exciting endeavor, but once your business is going, you may find yourself at a crossroads. Should you stay in your comfort zone by maintaining the status quo in your business? Or should you work on taking your company to another level?

If you’re seeing a positive return on your investment in real estate, you may naturally consider exploring various ways of maximizing your business’s potential. But if you don’t have much experience with scaling a business, you may find yourself at a standstill.

Fortunately, you don’t have to stay there.

Here’s a rundown on how to scale so that you’ll have an increasingly successful real estate business long-term.

How to Scale a Real Estate Business Tip 1: Master Your Marketing

This is an essential step in building a successful real estate business. Specifically, if you’re looking for lead generation ideas, it’s critical that you understand who your clients are first. For instance, who truly make up your buyers if you’re into wholesaling or flipping? Or who are your tenants if you’re renting out properties?

You can gather a lot of this information from sources such as surveys, Facebook reporting, or even your business website analytics. These sources can tell you your ideal customer’s psychographic and demographic makeup.

Also, find out what your ideal customer’s pain points are. For example, what tends to keep your customers up at night? It’s also a good idea to find out which marketing channel provides you with the best return on your investment for reaching your target customer. As an example, using Facebook is particularly helpful for generating a list of buyers as part of your real estate business development process.

How to Scale a Real Estate Business Tip 2: Automate or Outsource Your Activities

If you’re serious about creating a successful real estate business, it’s imperative that you complete an in-depth analysis of the business to see exactly where any bottlenecks and inefficiencies are occurring.

For instance, maybe you can take advantage of cloud computing to streamline your business process. You could also make your job easier by setting up a marketing system that will work while you’re asleep. You might also benefit from getting rid of any daily task items that have a low return on your investment; for instance, you may want to spend less time on social media if it’s not leading to substantial business gains.

Another way you can grow a successful real estate business is to outsource any non-essential tasks. Sure, this may seem scary if you’re used to handling a variety of tasks for your business. However, if you can hire an expert to help you with duties like producing marketing content for your real estate business website, you can devote more time and energy to developing your skill set as a real estate investor.

How to Scale a Real Estate Business Tip 3: Grow Your Real Estate Network

If you want to have a successful real estate business, it’s critical that you develop a strong investment network and continue to build on it. That’s because your business relationships are among your most critical assets in the real estate investing world.

For instance, let’s say that you are trying to raise capital. A good partner—for example, the right passive real estate investor—can easily elevate your real estate business by making an excellent apartment acquisition deal possible. Not all potential partners will be a great fit for you, but you need just a few good ones to get a leg up in the real estate investing industry. Real estate conferences, investing clubs, and networking meetings are excellent places to start building industry relationships.

How to Scale a Real Estate Business Tip 4: Establish a Niche to Build a Successful Real Estate Business

As a general rule of thumb, people enjoy working with others with whom they are comfortable. This is why it’s a smart idea to develop a solid niche in the real estate industry rather than trying to dabble in a number of areas of real estate. The better you are in your specific aspect of the industry, the more credible you’ll appear.

For example, if you’re especially passionate about buying and holding properties to rent out, your goal should be the best buy-and-hold investor in your market. In addition, try to focus on a specific type of real estate property, as this will make it more effortless for you to recognize great deals when they crop up.

The more experience you gain in the market, the more you’ll be viewed as a field expert. In time, you’ll see your credibility pave the way for brand-new deals for you.

Important Considerations When Trying to Build a Successful Real Estate Business

If you’d like to scale your real estate business, note that this won’t occur by accident. Instead, you’ll need to plan for growth and surround yourself with a strong team who can help you to reach that next level.

As a real estate entrepreneur, you want immediate results. I get it.  However, it’s paramount that you don’t rush things when trying to build a successful real estate business. You need to know that the particular strategies you’re using or targeting are actually healthy for the business.

Keep in mind that the seemingly minor adjustments you make today can have a huge impact on your company down the road. Also, don’t look down on the opportunity to make steady, slow progress in your business’s next phase. This, in fact, may actually lead to faster growth than you initially thought was possible.

Start Creating a More Successful Real Estate Business Now!

Growing any business comes with its challenges, and real estate businesses are no exception. Still, that doesn’t mean that scaling your real estate business is impossible. It’s very possible when you have the right real estate strategies and people on your side.

I am more than willing to help you to grow your business like never before. I currently own over $600 million in real estate after getting my first major break in 2012, when I raised a million dollars in private investment dollars and purchased an apartment community. Enroll in my private real estate program and find out how I can also help you to develop a successful real estate business.

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One Simple Trick to Qualify a Real Estate Mentor

A very common question asked by aspiring real estate investors isn’t “should I or shouldn’t I find a mentor?” but “how can I find a mentor?”

We’ve already discussed on the Best Ever Blog why hiring a mentor is a must, as well as created the ultimate guide to finding and hiring a mentor.

However, during Follow-Along Friday with Theo Hicks and Danny Randazzo, Danny explained an interesting trick he learned from his mentor about how to qualify a potential mentor. This trick can also be applied to qualifying business partners, employees – heck, even a significant other. But the context of Theo’s and Danny’s conversation was about real estate mentorships.

Theo interviewed a real estate investing couple who provided a list of things that are red flags when hiring a mentor, including the person lying or exaggerating about their experience, pressuring you to sign up or partner up on the spot, making you feel bad about asking questions, and overall conveying that they are of bad character.

Danny replied with a red flag of his own. Or more specifically, a trick to determine the quality of the mentor.

The trick is to schedule a video conference call with a mentor and gain a deeper understanding of them by analyzing their background.

Before learning about Danny’s three-step process, here is an interesting video that provides a philosophical overview of what our home, office, etc., says about us.

 

1. Set up a video conference call with the mentor

The first step is to set up a conference call with the mentor – either a current mentor or a prospective mentor. However, rather the scheduling a phone call, schedule a video call instead. Ideally, you use a service like Zoom which allows you to record the video conference, because that recording will come in handy in step 3.

Generally, when you are hiring a mentor, the first interaction is some sort of free consulting call where the mentor learns more about you and you learn more about the mentor. If this is the case, ask if they can do a video call rather than an audio only call.

If you already have a mentor, ask if your next meeting can be over video rather than audio.

Again, this trick works when you are searching for a new mentor or if you already have a mentor.

 

2. Execute the video conference

Whether this is a new mentor call or a call with an existing mentor, execute the video call just like you would an audio call. Make sure you check out this blog post here to learn what types of questions to ask when speaking with a potential mentor for the first time.

The only difference, besides the fact that the mentor can see you and you can see them, is that you are recording the entire video conversation.

 

3. Analyze the video

Once the call has concluded, schedule 30 minutes sometime during the next few days to analyze the video recording.

The goal of the analysis is to evaluate your mentor’s background and environment.

The environment in which we work and live says a lot about who we are, how we think, and our overall mindset and values.

Here are a few things to look for:

  • Cleanliness – In order to be successful in real estate, you need to be disciplined and organized. If someone is a real estate investor and has some sort of consulting or mentorship program, plus a million other things going on from a business and personal standpoint, they likely need to be even more organized. If you see a disordered, dirty, or cluttered environment, that may indicate that the mentor has a disordered, cluttered business or mind. Or, at the very least, they didn’t take the time to clean up their room prior to a pretty important meeting.
  • Video Set Up – Do they have a high definition camera, bright lighting, and good microphone? Successful real estate investors are either hosts of their own thought leadership platforms or are invited on as guests on other thought leadership platforms. So, if your mentor doesn’t have a high quality, professional recording set up, that might indicate a lack of expertise, network, or influence.
  • Presentation – You also want to analyze how the mentor presents themselves on camera. What are they wearing and is that consistent with your preferences and your real estate niche? Do you want your mentor be to a “shirt and tie” person or is it okay if they are wearing a polo or a t-shirt? Is their hair combed? Are they clean shaven? Etc. Again, there is no right or wrong way for a mentor to present themselves. It is based on your preferences and your niche. For example, if you are a fix-and-flipper, a good mentor probably isn’t wearing a shirt and tie. But if you are a commercial real estate broker, you probably don’t want a mentor who shows up on camera wearing a tank top.
  • Pictures – If the mentor has pictures behind them, try to determine what those pictures are. Are they pictures of their family, significant other, or kids? Is it a picture of them on vacation? Is it a picture of them receiving an award? Is it a picture of them with a well-known entrepreneur? The types of pictures in the background not only indicate the mentor’s experience (i.e., pictures of them receiving awards or with a well-known entrepreneur) but also their values. Ideally, your mentor has values that align with your own values. So, if you are very family-oriented, then you want to see pictures of their family in the background. If you are a travel junkie, vacation pictures are ideal.
  • Overall Background – What else do they have in the background? Ideally, your mentor has a consistent spot in their office or home where they do video meetings, whether those are meetings with clients or interviews on their own or other investors’ thought leadership platforms. That said, they may have a blank wall or a window behind them. But more than likely, they have something else behind them, whether it be book shelves, a whiteboard, pictures, etc. If there is something besides a window or a blank wall behind them, what is it? Do they have shelves full of business books? Do they have picture frames with awards or certifications received? Do they have a whiteboard with their goals written on it? Do they have some sort of vision board with things that represent their accomplishments? Are these things clearly ordered or are they all over the place? Everything you see in the background indicates the mentor’s expertise and values.

 

Overall, the purpose of the video call is to gain a much deeper understanding of the mentor – understanding of their level of organization, their level of expertise, and their values.

There isn’t one thing that, if seen, disqualifies a mentor – unless it looks like a tornado went through their background. The idea is to evaluate their background and determine how it aligns with what you want out of a mentor.

 

Are you an accredited investor who is interested in learning more about passively investing in apartment communities? Click here for the only comprehensive resource for passive apartment investors.

 

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How to Form The Ideal Partnership in Apartment Syndication

While it is possible to perform all of the duties of the general partnership on your own, most apartment syndicators elected to partner up with one or more individuals, either on a deal-by-deal basis or in order to launch a full fledge syndication business.

If you want to become an apartment syndicator, one of the first steps after educating yourself on the process is to seek out a potential business partner. And the structure of this partnership and even the type of person/people you partner up with will vary depending on your current skill set.

In this blog post, we will go over the process for creating an ideal partnership so that you are setting yourself up for success from the start.

 

What Do You Want Out of a Partnership?

When making any sort of business decision, the first thing you need to know is what you actually want.

What do you specifically want to get out of your new partnership? The answer to this question will determine the characteristics of the ideal partner.

First, you will likely want to find a partner who is able to invest a similar amount of time into the business. If you have a full-time job and plan on spending a few hours each night on the business, you’ll likely want to seek out a partner who will do the same.  Of course, you may desire a partner who will invest more time into the business than you, but you are likely setting yourself up for failure, as this person may begin to resent the fact that they are spending significantly more time on the business than you. In order to address this potential resentment from the beginning, the equity ownership of the general partnership should reflect any imbalances in time investments.

Next, you will want a business partner whose skillsets are complementary to your own. This starts by honestly evaluating your own skill sets and desires to determine the role you will play in the business. The roles that you either don’t have experience in or don’t want to do can be fulfilled by a business partner. For example, do you have a network of high net-worth individuals but hate underwriting? Then you can focus on raising capital, find a business partner with underwriting expertise, and determine how to split up the remaining roles.

To piggy back off of the previous point, in order to maximize your business’s efficiency, you will also want each partner to stay in their own lane. Obviously, all partners in the business should know what the others are doing. However, that doesn’t mean the person responsible for equity raising should be underwriting deals, unless that is one of their other responsibilities. Each partner should have a defined role in the business and should focus on fulfilling their duty.

You’ll also want a partner that you can get along with. This doesn’t mean that you and your business partner need to be best friends. But you do need to have complementary personalities. This point is more subjective than the previous characteristics of an ideal partnership, so you are going to need to rely on your own judgement. If you’ve known a potential partner for a while, it is a little easier than if you’ve just met the person. Either way, don’t rush into a formal partnership. Work together for a few months informally (i.e., don’t meet someone at a conference and create an LLC together over lunch) to determine if this is an individual you enjoy working with and if this person is serious about building an apartment syndication business.

Lastly, you will want to set expectations about how the business will function and flow from the start. This includes setting expectations on the responsibilities, ongoing communication, initial goals, etc. We will go into more details about assigning responsibilities in the next section.

In regards to ongoing communication:

  • How often will you have meetings?
  • What will be the logistics of these meetings? Who will call who? Will you use a call-in service like Zoom?
  • What will be the agenda for these meetings? Will each meeting follow a similar structure?
  • If you have a question for the other business partner, how quickly will they respond?

In regards to goals:

  • What are the initial goals of the business?
  • Do your goals align with your business partners’ goals?
  • How will the success of these goals be measured?
  • Will you have a shared project tracker so that you can see what the other person is doing?
  • What are the goals each week, each month, each quarter, each year?
  • What are the longer-term goals of the business?

 

What Will Be Each Partners’ Role in The Business?

As I mentioned in the previous section, an ideal partnership is one in which the partners have complementary skillsets. And each partners’ role in the business is based on their skillsets.

In apartment syndications, the roles of the general partnership can be broken into 7 categories, and each responsibility has a commonly accepted range of equity ownership.

First, who will raise the equity? The person who raises the equity should also be responsible for all ongoing communication with the passive investors. They will notify investors when there is a new opportunity. They will lead the new investment offering conference call. They will be responsible for formalizing investor commitments. They will notify investors once they deal has closed. And they will be responsible for sending ongoing deal updates to the investors. Generally, this investor relations person will receive anywhere between 25% to 40% of the general partnership.

Next, who will guarantee the loan? In order to qualify for commercial financing, someone who meets the lender’s liquidity, net worth, and experience requirements will need to sign on the loan. When you are first starting out, this will likely be a third-party, because you and your business partner won’t meet the lender requirements on your own. If this is the case, you will offer this individual an equity stake (5% to 20%) in the general partnership and/or an upfront fee (0.5% to 5% of the principal balance). Eventually, you and your business partner will be able to guarantee the loan and you can split the equity ownership 50/50.

Third, who will find the deals? The person who finds the deals will focus on building relationships with the commercial real estate brokers and implement off-market lead generation strategies. Generally, 5% to 10% of the general partnership is allocated to the deal finder.

Fourth, who will perform due diligence on deals? This person is responsible for underwriting deals, submitting offers on deal, securing financing, overseeing the post-contract due diligence, and ensuring a successful close. Mostly likely, the person who finds the deals will also perform due diligence on the deals. If this is the case, this person can be referred to as the acquisition’s manager. Generally, 10% to 15% of the general partnership is allocated to the person who performs due diligence, and 15% to 25% is allocated in total to the acquisition’s manager.

Next, who will asset manage the deals? This person is responsible for ensuring the successful implementation of the business plan once the deal has been closed on. Among other duties, they will do the weekly performance reviews with the property management company and frequently analyze the market to determine the best time to sell. Generally, 20% to 35% of the general partnership is allocated to the asset manager.

Sixth, who will pay for the upfront due diligence costs? There are costs associated with closing an apartment deal. These costs are typically reimbursed at closing, but someone will need to front these costs. These costs include lender fees and legal fees associated with securing financing and formalizing the syndication partnership between the GPs and the LPs. Generally, 5% of the general partnership is allocated to the person who fronts these costs.

Lastly is the upfront work required to create the foundation syndication business. Who will evaluate and select the target investment market? Who will create the business’s brand (i.e., the website, company name and logo, business cards, thought leadership platform, etc.)? Who will find and interview team members? Most likely, these responsibilities will be split up between the partners, and will likely be based on who is responsible for the other 6 duties (i.e., the equity raiser will likely be responsible for the thought leadership platform, the deal finder will likely be responsible for finding commercial real estate brokers, the asset manager will be responsible for finding the property management company, etc.).

One of the first things you’ll want to do with a new partner is determine who will perform the duties for each of these seven categories and negotiate a fair split of the general partnership equity based on those duties.

 

Conclusion

The formation of a business partnership is both common and extremely beneficial to launching and growing an apartment syndication business.

In order to create the ideal partnership, the first thing you want to do is determine what you specifically want out of the partnership. Overall, you want a partnership where the equity percentages reflect the time investment and role of each partner, where each partners’ skillset complements the others, where each partner stays in their own lane, where each partner can get along, and where expectations are defined from the beginning.

Once you’ve found a partner or partners who meet this criteria, the next step is to determine who is responsible for what and the equity percentage given to each partner.

Follow these best practices in order to maximize the long-term success of your new syndication business!

 

Are you an accredited investor who is interested in learning more about passively investing in apartment communities? Click here for the only comprehensive resource for passive apartment investors.

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Build an Authentic Brand through Business Storytelling & Building Connections

Why exactly did you decide to get into real estate? If you’re like many investors, chances are that the first answer that comes to mind is having more freedom. But if you dig deep, you’d likely uncover a slew of other reasons for building a real estate brand.

Perhaps you remember having a positive renting experience years ago and would like to deliver that same experience to current tenants. Or maybe a family member was in real estate and has instilled in you a passion for the same. Maybe you simply like owning a high-value asset that, unlike stocks, you can actually touch with your hands.

Whatever the reason, it’s critical that you understand why you’re in the real estate game. Then, you can use this awareness to sell yourself through effective business storytelling. Here is a rundown on how to brand your company in the real estate world through business storytelling and building connections.

Solidify Your Vision

An important step in telling your story as a real estate company is to first determine what that story is. If you don’t have a foundation of values and goals, your brand’s messaging may end up being confusing and even inconsistent.

So, first, determine what your company’s purpose is. Ideally, your goal should be to generate the financial returns you’re looking for while also helping to meet people’s needs, thus adding value to society at large. The people you may be striving to help include the prospective tenants who will rent one of your apartment investments or fellow investors who are looking for that next great deal to join in on, for instance.

Communicate Your Company’s Core Values

Once your real estate brand features a strong vision, it will naturally develop strong values. Your job as the founder is to use business storytelling to communicate these ethics to your audience and build a connection between the two.

Ideally, you should pinpoint between three and five main ideals that you have built your business on as you navigate how to brand your company. Then, ask yourself why each of these values is essential. How does each one serve your vision in the real estate world?

For example, one of your core ideals could be to embrace opportunities, which include being creative and flexible in your company’s approach to seeking and securing deals. You could also emphasize that you value integrity, which may help you to attract tenants who are looking for a forthright and honest landlord.

Produce Compelling and Authentic Content as Part of Your Business Storytelling Efforts

Now that you have created a solid vision, identified your target audience members, and selected your company’s core values, it’s time for you to create a brand language that will help you to tell your unique story. This brand language certainly includes written words, but it also includes visuals. This content can be displayed in the form of posts on social media, in a blog, or on your real estate company’s website.

No matter where you place the content, make sure that it echoes your company’s core values and mission. You should view the content you create as a puzzle piece that fits your business’s overall picture in the real estate world. Most importantly, you need to be authentic to capture not just the eyes and the minds of your target audience but also their hearts.

Keep Your Business Storytelling Simple from the Start

One of the biggest mistakes people make when they set out to tell their businesses’ stories is that they complicate the process. As you work on figuring out how to brand your company, stay focused on three core things from the start: your business problem, your solution, and your success. That’s all you need to determine your vision, identify your core values, and effectively tell your story.

A Glimpse at the Steps of Business Storytelling

For instance, as you work on creating content for your website, first think about the beginning of your story—the problem you initially attempted to solve through your business. Maybe you wanted to provide more rental options in a certain area of town.

Then, identify the middle—how you solved the problem. In your case, maybe you purchased several properties that offer the types of amenities that local residents are seeking in that area of town.

Finally, determine the end—the success you’ve had in meeting the needs of tenants in the local area. Your end should create optimism for your audience.

All in all, your real estate story can appeal to tenants interested in renting from you, as well as investors interested in partnering with you on future deals. With the right story—one that isn’t too complicated—you can easily build trust with your audience.

Be Personable in Your Business Storytelling

Another important part of mastering how to brand your company is making sure that your personality shines through in your business’s story. As mentioned earlier, it is critical that you are authentic and make your personal values your real estate company’s values. This will help to ensure that your brand is totally unique.

Remember that, in the end, the people who will work with you on an investor or a tenant level will be drawn to you, not necessarily to your company. That’s because people partner with and buy from other people. In light of this, make sure that you are visible in your brand, as this will enable you to build important connections and successfully drive the brand forward.

Start Engaging in Effective Business Storytelling Today!

As a real estate business owner, you may understand the importance of branding your company, but you might be unsure about how to go about it. Fortunately, you don’t have to navigate this process alone.

I can help you to tap into the power of storytelling to successfully market your company to your target audience every time. With my help, you can confidently create engaging, memorable, and profitable messaging for your business. Contact me to learn more about how you can strengthen loyalty to your real estate brand and achieve your financial goals in the months and years ahead.

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Unique Brand Marketing Strategies for Your Real Estate Investment Business

You couldn’t be prouder of the real estate investment business you’ve built up. And with the access you’ve gained to important resources, like capital and expertise, you have every reason to be. There’s just one problem: Not many people know about you.

Yet.

The reality is, mastering marketing is one of the most difficult aspects of running any business, and a real estate company is no different. At the same time, marketing is one of the most important pieces to the puzzle of growing your firm and reaching new financial heights.

Fortunately, I’ve compiled the best ever guide on how to market your business in the real estate world. Here’s a rundown on the top unique brand marketing strategy options.

Podcasts

If you don’t have a real estate podcast yet, you’re already falling behind the competition, and you’ll soon be left in today’s digital dust. That’s because podcasts are becoming increasingly popular among U.S. consumers.

Back in 2018, about 73 million people listened to podcasts. However, this number is expected to increase to about 132 million in 2022. In addition, more than 25% of people in 2018 said they had listened to podcasts within the past 30 days—a major increase from 9% back in 2008.

Let’s take a look at why podcasting is such a smart real estate brand marketing strategy and how you can take advantage of it.

Why Podcasts?

If you’re trying to figure out how to market your business, you can’t go wrong with podcasts, as these tools are proven to be excellent at generating awareness about a brand. A podcast is also great for sparking thought leadership and engagement.

Podcasts additionally allow you to develop a loyal online community where you and your experienced guests can share your industry insights. From there, you can drive traffic to your website or boost your revenue stream.

As a general rule of thumb, podcasts are a must-have brand marketing strategy if you’d like to form a strong relationship between your audience and your brand. Likewise, a podcast is a smart move if you’d like your real estate company to have its own voice. However, as a podcast host, you must be willing to share information about the real estate industry regularly. An alternative option is to get booked as a guest on other real estate experts’ podcasts.

Getting Started with a Podcast

To begin using the podcast brand marketing strategy, you first need to decide how you’ll approach it. For instance, how frequently will you post a new episode, and for how long? Also, will you be the only host, or will you share the spotlight with another industry expert? What guests will you invite to join you, and what will your core point of view be in your real estate area?

From a practical standpoint, you should invest in a do-it-yourself podcasting setup that includes a microphone and stand, headphones, acoustic panels, and a mixer. You’ll also need to locate a hosting site for your podcast. The right site will let you upload your podcasts yourself, and then, podcatchers can syndicate your episodes through RSS feeds. These podcatchers include the likes of iTunes, Google Play Music, and Spotify.

Once you’ve hosted and uploaded about six shows, you’re in a position to start seeking investments in the form of sponsorships. You can expect your sponsorship and advertising revenue opportunities to grow from there the more you upload episodes and attract regular listeners.

Social Media

Another unique brand marketing strategy that is imperative to use includes social media sites, like Facebook, Pinterest, Flickr, YouTube, LinkedIn, Twitter, and Instagram. However, before you start using these sites randomly, it’s important that you analyze the various kinds of audiences that each site caters to. This will help you to determine how to craft appropriate messages for each platform based on the platform’s voice.

As an example, you can use your Facebook page to share news and local events that are relevant to the real estate industry. Twitter can also be useful for news syndication purposes and for remaining in the audience’s mind. Meanwhile, on Instagram, you may want to focus on sharing stories about recent purchases or sales of your properties that stand out.

YouTube is a great place to showcase videos of your for-sale properties and direct people to your website, and Pinterest and Flickr are excellent for sharing photos of these properties as part of your real estate brand marketing strategy.

Meetups

If you’re wondering how to market your business, hosting a real estate meetup is yet another wise move. With this approach, you can invite local experts to come to speak to your attendees. You can also encourage attendees to bounce ideas off one another and support one another in their entrepreneurial endeavors.

For your meetup brand marketing strategy to work, it is critical that you offer something that attendees value. Your guests need to gain something from participating in your group, including new knowledge and helpful connections. In fact, when you first invite people to join your group on social media and start attracting interest, it wouldn’t hurt to ask interested parties what they would like to get out of your group.

The benefit of hosting a real estate meetup is that it allows people to learn more about your real estate investment business. Through this brand marketing strategy, you may find yourself coming across new potential business partners or even people who would like to buy your properties. You could even find people who want to sell you their properties before they place them on the market, which means less competition for you.

Take Advantage of a Unique Brand Marketing Strategy for Your Real Estate Investment Business Today!

Drawing positive attention to your real estate investment business can no doubt feel like a daunting task. However, with the right knowledge, you can easily implement a winning brand marketing strategy that will help you to attain the results you want.

I can show you firsthand how to market your business effectively. Get in touch with me today to learn how you can take your real estate investing company to the next level.

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The Real Estate Investment Partnership Agreement between GPs and LPs

The idea of forming a real estate investment partnership can no doubt be exciting. However, if you don’t practice due diligence, the process of forming a partnership may end up causing you more harm than good.

The reality is, creating a real estate investment partnership agreement is a process that involves many moving parts. If you master each one of these parts, though, you can quickly elevate your investing career, as you’ll be able to confidently work alongside someone who can help you to move to another level.

Here’s a look at what a partnership agreement involves between general partners and limited partners.

Real Estate Partnership Between GPs and LPs Infographic

What is a General Partner vs a Limited Partner?

A general partner is a seasoned property manager, for example, who is interested in expanding his or her real estate investment opportunities. As a general partner, you’ll form a real estate investment partnership agreement with limited partners—outside, accredited investors who are willing to finance your real estate projects.

Benefits of Being a General Partner

One benefit of being a general partner is that you’ll dictate how your real estate projects go. You’ll use the capital contributions from your limited partners to pursue potentially profitable opportunities that both you and your limited partners can benefit from. With your limited partners’ financial contributions, you can more easily buy a property that you couldn’t purchase on your own.

Because your limited partners are helping to fund your projects, they will receive shares of ownership in the deals. They won’t always have management-level control in your projects. However, they’ll receive the benefit of having less exposure to risk.

The Responsibilities of the General Partner vs the Limited Partner

One of the most important components of a real estate investment partnership agreement is the section that outlines what both parties’ responsibilities are. If you’re a general partner and you don’t clearly define your roles and your limited partners’ roles, your partnership may be fraught with conflict down the road.

General Partner Duties and Expectations

As a general partner, you’ll be responsible for scouting properties and even handling repairs/construction, unless you have another general partner working alongside you who can handle this. General partners are also responsible for performing marketing and sales duties, as well as any other essential business operations tasks.

If you do have a fellow general partner working with you, be sure to spell out in your agreement how much time both of you will commit to the business as well; this will prevent feelings of resentment in the event that one person feels that the other person isn’t pulling his or her weight in the business.

Limited Partner Duties

A limited partner’s main function is to simply invest money and then wait for their returns. They’re passive real estate investors who don’t take part in and influence your partnership’s everyday operations directly. Instead, they must put their trust in you, the general partner.

Limited Partner Expectations

Before entering a real estate investment partnership agreement with you, limited partners must understand that investments in partnerships are typically long-term ones in the real estate world. In other words, your limited partners might not have the flexibility to suddenly resell their investments if they need to do this. Unlike with stocks, which they can cash out at any time, they might have to wait for a property to be sold before they can pursue other investment opportunities with their capital.

Also, because the real estate market fluctuates frequently, you can’t guarantee as a general partner that all your deals will be profitable, as project expenses may sometimes exceed the budget. Your limited partners need to understand and accept this reality. At the same time, your goal is to remain profitable so that limited partners will continually want to work with you; only then can you consistently be in a good position to grow your business.

Real Estate Investment Partnership Agreement Should Outline Financial Considerations

The financial aspect of your partnership is important to solidify before you make your partnership official. For example, if your business incurs losses, your limited partners will be liable only for the money they contributed, not for all of the business’s debts. Meanwhile, as a general partner, you can expect to be held liable for your business’s debts. This means that your business assets and your personal assets may be needed to pay off your business’s debts.

It’s critical that you firmly grasp your real estate company’s financial situation. The more you understand your financials and clarify them, the less likely you are to experience complications with your fellow business partners in the short and long terms.

Form a Strong Partnership Today!

Purchasing investment properties can certainly be a thrilling yet intimidating process. However, partnering with other investors is a smart move, as it allows you to leverage their capital and your capital to achieve new heights in the real estate investing world. Of course, both you and your partners need to create a strong real estate investment partnership agreement to put yourselves in the best position to reap financial rewards.

I can walk you through the process of developing such an agreement. I’ll show you how to tackle potentially confusing and contentious areas like general partner and limited partner compensation. I can also help you to figure out how to choose the right partners for your business, as not all potential partners may be right for your needs. Get in touch with me today to learn more about how you can make the most of your real estate investment partnerships in the years to come.

 

Are you a newbie or a seasoned investor who wants to take their real estate investing to the next level? The 10-Week Apartment Syndication Mastery Program is for you. Joe Fairless and Trevor McGregor are ready to pull back the curtain to show you how to get into the game of apartment syndication. Click here to learn how to get started today.

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Non-Monetary Ways to Add Value and ROI for Real Estate Investment Partners

One of your biggest reasons for getting into real estate was to make money and have more freedom. And if you ask your real estate investment partners their motivation for getting into the field, they’d no doubt say the same thing. So, naturally, your number-one focus is on generating streams of revenue that will keep both of you happy.

But, according to the old adage, “money isn’t everything,” and this couldn’t be truer in your case. That’s because, in addition to making your real estate investment partners money through your deals, it’s critical that you also look for non-monetary ways to add value for these partners.

Here’s a rundown on how you can help to increase your partners’ ROI in real estate in a few non-monetary ways.

Take Ownership of Your Digital Footprint

This is one of the smartest things you can do if you’re wondering how to add value in business. How exactly can you accomplish this? By using a combination of online business listings and forums in your local area, video, search engine optimization, and social media to ensure that your real estate company’s brand is in every location where people are conducting searches for local investors and cash buyers.

The truth is, various consumers absorb information in a variety of ways. For this reason, it’s important that you represent your brand online in various forms, as this will increase your chances of being discovered and help you to build trust with your audience. When used correctly, your digital marketing resources can effectively show the masses what your real estate business is all about and how you can add value to their lives. In no time, you can expect to generate monetary value for your investment partners as a result.

More on Adopting a Technological Focus to Add ROI in Real Estate

The good news about using social media, in particular, is that it’s a low-cost tool for promoting the properties that you and your real estate investment partners are trying to rent out or sell. There’s no need to shell out large sums of money for traditional advertising like investors had to do in the past. Instead, you can simply post pictures or videos of your company’s properties on each social media platform, ranging from LinkedIn to Facebook, Instagram, and even Pinterest.

Also, be sure to take on a “mobile-first” approach in your marketing strategy. This means creating a website that is fully responsive, featuring video tours as well as photo galleries that will engage your readers no matter what devices they’re using to view them. The easier it is for people to navigate your website, the easier it will be for you to drive revenue for both you and your partners.

Present Yourself as a Subject Matter Expert in Real Estate to Add ROI for Real Estate Investment Partners

If you’re wondering how to add value in business, another smart move you can make is to share your expertise with the world online. You can do this by jumping into discussions on online forums dealing with real estate investing, for example.

By answering people’s questions about real estate and sharing your own learning experiences in the industry, you’ll add value to online users’ lives and achieve higher levels of name recognition over time. This will help you grow your business and, in turn, your potential revenue stream. This, of course, is a great situation for you, but it’ll also ultimately add value for your real estate investment partners.

Create Informative Articles If You’re Wondering How to Add Value in Business

You may also want to look for opportunities to add ROI for real estate investment partners by writing expert articles for high-authority sites. The goal is to make this content informative and educational, not “salesy.” If you do this, you may generate more inquiries from potential buyers as well as developers looking to sell their properties. In addition, media sources may begin to view you as the go-to source for your real estate industry niche, and this will only create more positive publicity around your real estate company. The more well known you are, the more money you can potentially make for you and your investors.

Host Real Estate Meetups to Add ROI for Real Estate Investment Partners

If you’re wondering how to add value in business, another step you can take is to host real estate meetups in your local community. These meetups offer the benefit of allowing you to network with other industry professionals and grow in your knowledge of the industry. The more you know, and the more industry players you know, the more effective you can be in adding ROI for real estate partners and for yourself long term.

You can plan to host your first meetup at a bar or even a local church that is willing to accommodate you. As your membership grows, be prepared to change locations as needed. Over time, you’ll develop a reputation for being the person who knows everyone in the industry and understands the industry like the back of your hand. This will serve you and your investment partners well by helping you to gain credibility and thus more opportunities to grow your business.

Start Adding Value and ROI for Real Estate Investment Partners Today!

As a real estate investor, you should constantly be exploring how to add value in business. After all, running your real estate business is a 24/7 job that requires persistence and creativity if you want to really succeed.

Fortunately, I can make this process a little easier for you by helping you through it. My goal is to give you the tools you need to develop a stronger reputation and generate more revenue in your area of real estate. Get in touch with me today to find out more about how I can help you to add value for your business and for your real estate investment partners both now and in the years ahead.

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Consider Accredited Real Estate Investors over Loans to Fund Your Deals

Securing a real estate investment deal that will generate a comfortable revenue stream for you is your dream. Unfortunately, if you’re like many real estate investors, you’re currently walking through the nightmare of figuring out how to fund real estate investment opportunities.

You’ve considered going to local banks to get help with funding your deals, but these traditional lenders may not necessarily be the best entities to partner within your real estate business. Instead, you may want to consider going to an accredited real estate investor to fund your deals with passive investment capital.

Here’s a rundown on who accredited investors are and how they can help you to more easily achieve your financial goals than a traditional lender can.

A Glimpse at the Accredited Investor

These individuals are different from banks and even hard money lenders in that they are not professional lenders themselves. Instead, they are high net worth individuals who are looking for greater returns on their monetary investments.

By definition, an accredited real estate investor in 2019 is any person whose income surpassed $200,000 in both 2017 and 2018. This figure jumps to $300,000 if he or she has a spouse. Or , an accredited investor is anyone whose net worth exceeds a million dollars (with or without a spouse). Accredited investors also include trusts whose assets total more than five million dollars or entities where each equity owner is an accredited investor.

Get More Flexibility

If you’re wondering how to fund real estate investment opportunities, a major reason to choose accredited investors over banks is that passive investor money doesn’t come with the types of points and fees you get with traditional lenders. In addition, you can more easily negotiate the loan’s term length in a manner that will best serve your interests and the other party’s interests equally.

These Investors are Qualified to Work with You Financially

In addition to offering flexibility in the area of funding, an accredited real estate investor has the net worth and income needed to finance large deals—something that small investors simply can’t do. This is a major advantage because these investors enable you to take advantage of opportunities you otherwise may not be able to tap into. These deals may include a large apartment building or even a retail shopping center investment, for example.

Knowledgeable Partners

If you’re wondering how to fund real estate investment opportunities, having accredited investors on your side is also a wise move, considering that investments in real estate are inherently complex.

Accredited investors are known for having extensive experience and knowledge in business and financial matters, particularly when it comes to evaluating a prospective deal’s risks and merits. In addition, these investors are sensitive to market conditions at the local level as well as the nation’s economic cycle. Therefore, with the help of an accredited real estate investor, you can more easily understand your investments’ risks and thus absorb possible losses.

You May Have More Success with Obtaining Funds through Accredited Real Estate Investors

Another major reason to consider passive investor capital over loans to fund your deals is that you may have more success.

The reality is, banks are tightening their standards when it comes to commercial real estate loans. As a result, going through the process of attaining a bank loan can feel like fighting a battle that will never end. However, with an accredited real estate investor, you don’t have to go through all of the red tape associated with banks. This means you can get your deals funded more quickly and without the headache that banks typically cause.

What Accredited Investors Get Out of the Deal

So, why exactly are accredited investors so much more agreeable and easier to work with than banks in general? Here are a few reasons.

Higher Returns

First, whereas banks tend to be more cautious, an accredited real estate investor is more willing to take greater risks, as these risks lead to higher returns on their cash. Some of their deals can easily generate returns of around 8%, mirroring what they’d likely get in the stock market, but other deals can lead to returns of between 15 and 25%.

Accredited investors are generally willing to take on the additional risk of working with you and having an illiquid investment because they know that the returns will be higher than what they may get with bonds, stocks, and real estate investment trusts.

Diversified Investments

Seeking funding from an accredited real estate investor rather than a bank is also a wise choice because these investors are all about diversification. Because today’s stock market remains volatile, investors are focused on diversifying their portfolios by pursuing assets that aren’t as correlated with the market. These assets include, for example, industrial buildings and apartment buildings. In this way, if the stock market ends up tanking, their real estate investments can help them to buffer their losses.

Start Investing with the Help of an Accredited Real Estate Investor Today!

If you’re trying to figure out how to fund real estate investment opportunities, you generally can’t go wrong with an investor. These investors can quickly become your new partners, helping you to more quickly and efficiently achieve your monetary goals in real estate.

The question is, how exactly do you go about seeking these investors and taking advantage of their funds? I can show you how to start using accredited investors’ funds instead of going to banks. With my help, you can become educated on this funding method and learn how to network with investors, all the while practicing due diligence. Contact me today to find out how I can work with you to take your real estate investment business to another level this year.

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Drafting the Ultimate Team Member

Whether it’s renovating a home, finding deals, or figuring out your taxes, nothing can detour your business faster than putting a job in the hands of the wrong person. With the NFL Draft starting tonight – where every team is looking to fill their needs with the perfect teammate – we asked our Best Ever Community what intangible skills they look for when hiring a new staff member.

It’s easy to measure a person based on their “hard” skills – or the skills that a person has learned like math, science, or, in tonight’s case, Kyler Murray’s ability to drop a dime while scrambling for his life. It’s a completely different story when you’re trying to gauge a person based on their “soft” skills – the intangible traits that make you who you are. But, if there’s one thing that our Best Ever Community agrees on, it’s that these soft skills are what help shape the hard skills you need to complete the job.

“I used to vet people for [hard] skills,” says Nathan Hirsch, CEO of the virtual recruiting company FreeeUp. “I would hire someone with a great resume, 5 + years of experience and 5-star reviews on other platforms. A month later I was pissed off and frustrated. How could someone with so much skill not be a good fit? I realized that skill was only a part of the equation. The full picture is skill, attitude and communication.

“For skill, I don’t need them to be a 10/10. They can be an 8/10 or a 3/10, as long as they are honest about what they can or cannot do.

“For attitude, I want people that are passionate about what they do. If I hire a bookkeeper, they need to love bookkeeping as much as I love being an entrepreneur. I look for people who can accept feedback without taking it personally and not get aggressive when something doesn’t go their way.

“For communication, I want people that can show up on time, respond within a business day and let us know upfront if they can’t work. The full triangle has led to a lot of amazing hires and it is the foundation of the FreeeUp vetting process.”

We’ve broken our list of intangible skills provided by our Best Ever Community members into two different, yet closely related categories. Often, these soft skills go hand-in-hand and sometimes a skill could be argued for both categories. Nevertheless, each of the following are features you should be looking for when hiring a new team member:

Professionalism

  • Organization: Can be developed but vital for keeping projects on track.
  • Communication: The ability to convey the right message (sometimes non-verbally), be open, and develop relationships. This could be considered more of an art than a skill.
  • Cooperation: Or as Chris Tracy says, “Playing nicely in the sandbox.”
  • Flexibility and Ability to Remain Negotiable: Keeping an open mind and a desire to understand where someone is coming from is vital for productivity.
  • Detail-Oriented: The difference between “meh” and “wow” are in the details. Employees who are conscience of the details can create customers for life.
  • Action-Oriented: The last thing you need is someone who wants to sit around and wait for the job to come to them.
  • Diligence: Persistent effort to get the job done.
  • Objectivity: “Deal metrics in particular,” says James White, “but other areas as well, such as geography, demographics, psychographics, etc.”


Character

  • Honesty, Integrity, and Ethical: “Integrity and a great work ethic,” suggests Garth Andrew Kukla, “because those are traits you can’t teach someone. Either they have it or they don’t, and I like both. But the best thing I’ve ever done is hire only people – who after meeting them – I’ll say to myself ‘I can’t imagine them not joining my team!’ It’s a high bar but has served me very, very well.”
  • Patience: “Be patient and play the long game would be my skill of choice when recruiting, says Dino Pierce. “I’m going to be active in the space for at least another 30 years. Let’s think long term, be detail-oriented and diligent, have patience, think legacy, and make moves so we all win.”
  • Teachable: The willingness to learn and humbleness to crave it.
  • Resilience: It’s not about whether they will fail, it’s about how will they recover? You’re looking for that never-give-up attitude. Everybody sing, “You can stand me up at the gates of Hell, but I won’t… back… down.”
  • Curiosity: Demonstrates a thirst for knowledge.
  • Optimistic: Having a positive attitude is a crucial characteristic for being a leader.
  • Resourceful: Every company needs their own MacGyver to find outside-the-box solutions
  • Genuine: Being original goes beyond personal style; it’s having a consistently authentic personality.
  • Activator: One of my favorite terms (suggested by Charlie Kao), this is the ability to turn thoughts, ideas, and concepts into actions.
  • Fearlessness: Someone who is not afraid to fall down will carry a position to new heights.
  • Passion: Like Nathan said in his quote, the best attitude is derived from the passion a person has for the job.
  • Humility: “I think humility is a big one for me,” says Ola Dantis. “The soft skills are equally as important in building long-term success.” Like being teachable, humility allows for someone to recognize that they may not know it all and be considerate of contrasting views/opinions.

We’re not suggesting that any one person is going to exhibit each and every one of these skills. But the key is to find ways to determine which of these skills the individual has or lacks. It’s important to decide which skills are a MUST for the job, and which can be developed on a daily basis.

Like every GM in the NFL is doing right now, paying close attention to combinations of these skills can land you the ideal candidate for the job.

“Communication, ethical, genuine, honesty, heart,” suggests John Fortes. “Look for those intangibles. When they all come together, you have an all-star that might be a Hall of Famer. [The candidate] has to be teachable.”

What did we miss? Let us know what soft skills you look for when hiring the ULTIMATE team member.

 

 

 

 

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My Three-Step Approach to Hiring New Team Members

Real estate investing is a team sport. Whether you are investing in single family residences or massive apartment communities, it is impossible to manage every aspect of the transaction on your own.

This is even more true when you decide to pursue real estate investing full-time or when you want to take your current business to the next level. In addition to the third-party team members (i.e., agents, brokers, property managers, accountants, etc.), you will likely get to the point where you need or want to bring on a partner and hire your own full-time or part-time employees. When the time comes, how do you know who to partner with? And how do you know who to hire?

After my first apartment syndicated deal, I teamed up with my current business partner Frank and began to hire the people who make up my current team. And here is the three-step approach I used, and that I recommend you use as well:

 

1. What do you want to do?

Before finding a business partner or bringing on other team members, the first thing you need to do is determine what you are looking for in a prospective partner or team member. This is accomplished by determining what your ideal role is in the business, which is based on what you enjoy doing and, more importantly, what you do very well.

If you are interested in becoming an apartment syndicator: do you want/like to raise money? Network with brokers to find deals? Underwrite? Asset management? Whichever role or roles you determine to be your ideal fit, then you will need to bring on a business partner to fulfill the other roles.

As you begin to execute your responsibilities in your new role, you will eventually get to the point where you either cannot fulfill all of the responsibilities yourself or don’t want to. At that point, you can hire full-time or part-time employees and delegate those responsibilities to them. For example, if you are responsible for underwriting deals, you can bring on a few people to help you with the underwriting process. Or if you are responsible for raising capital, you can bring on an assistant to manage incoming investor leads. Or if you are responsible for branding, you can bring on a writer or social media person. You get the idea.

 

2. Talent vs. Loyalty

Once you’ve determined what you want to do, the next step is to find the person or people to bring on your team. My personal approach is to find people who will be loyal to me and the business first. The “loyalty to me” applies more to full-time team members than business partners.

I prioritize someone who likes me and wants to grow with me over someone who is extremely talented and qualified. I can mold the former to fit what my company needs. Plus, I’d rather have someone by my side for the long run than someone who is talented and qualified but is using this job as a career leap and will leave after they get what they want out of it.

 

3. Word of Mouth Referrals

Now that you know what roles and responsibilities you will fulfill and the type of person you want to hire, the last step is to actually find candidates. The best way to find team member candidates is through word-of-mouth referrals. Leverage BiggerPockets and other online mediums, local meetups, and conferences and let people know that you are looking to expand your team. Explain the type of person you are looking for and what their responsibilities will be and ask for referrals.

I know this approach works because I found my first full-time hire at a meetup. I simply mentioned that I was searching for someone to help me grow my podcast and that is how I met Theo.

 

Overall, my approach for selecting partners and bringing on team members is simple: figure out what you want to do and partner up/hire out to fulfill the other roles, prioritize someone who will be loyal to you and your company over someone who is talented and qualified but is using this job for their own personal gain, and find team members through word-of-mouth referrals.

Follow this three-step approach and you will find the best team members who will stay with you the longest and help you take your investing business to the next level.

Are you an accredited investor who is interested in learning more about passively investing in apartment communities? Click here for the only comprehensive resource for passive apartment investors.

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firing a property management company

How to Approach Firing a Property Management Company

The property management company is one of the most – if not the most – important member on your core apartment syndication team. They are the boots-on-the-ground who oversee property operations on a daily basis and execute the business plan. Therefore, the success or failure of a deal is highly dependent on the quality of the company managing the property.

Hiring a qualified, experience and credible property manager should be done prior to looking for and ultimately purchasing a deal. However, what happens if are acquiring a deal, the property management company is unable to execute efficiently?

Well, they may need to be let go and another property management company will need to take their place.

In this blog post, I will outline the three reasons why you would need to part ways with your property management company, the five things you need to address in order to ensure a smooth transition and how to approach the conversation when letting the old manager go.

 

When Should You Fire Your Property Management Company?

There are three main things your property management company could do that should start the firing process:

 

1. Criminality or fraud

If you discover that your property management company has committed fraud or a criminal act, you should begin the firing process immediately.

 

2. Lack of execution

Lack of execution is another reason why you would fire your property management company. However, before beginning the firing process, confirm that the lack of execution is due to the property management company and not some other factor. For example, a failure to meet rental premiums on renovated units, a lower than expect occupancy rate or a high loss-to-lease could be due to the current market conditions and not the property management company. Or poor unit renovations or deferred maintenance could be due to a poor vendor and not the property management company.

You don’t want to go through the trouble of firing your property management company if the problem will continue once a new management company is in place, so make sure you do your homework.

 

3. Lack of communication

While this reason is subjective, you will know if your property management company is an ineffective communicator. Are they ill prepared for, don’t show up to, or have to constantly reschedule the weekly meetings? Do they take days to reply to your emails? Is it a struggle to get them on the phone? Do they communicate with you immediately when something goes wrong at the property? These are examples of a property management company that lacks communications and should be fired.

 

Unless the property management company has committed fraud or a criminal act, I recommend waiting at least one quarter before beginning the firing process. If after a quarter they still aren’t executing the business plan and/or lack communication, the first step of the firing process is to find a replacement property management company.

 

5 Things to Address to Ensure a Smooth Transition

Once you’ve made the decision to fire your property management company and found a replacement, there are 5 things you need to address in order to ensure the smoothest transition possible.

 

1. Staffing

First, you need to decide if you are going to fire all of the existing onsite staff or if you will allow some of them to stay under the new management company. To determine who stays and who goes, have the new property management company interview and vet the current staff. After the interviews and vetting, they can decide who to keep and who to let go.

Keeping some of the existing staff can be very helpful with the transition, because they have previous experience of and inside knowledge on operating the property. But if the current staff isn’t performing, the property management company may need to bring on an entirely new staff.

 

2. Financials

Your new property management company should proactively request all of the financial documents they need in order to take over the operations. This include the historical profit and loss statements, the current leases and rent roll and the chart of accounts (list of income and expense line items and the bad debt/delinquency).

 

3. Renovations

The new property management company will also need a list of the units that have and haven’t been renovated. Additionally, they need to know the exact renovations that were done for each unit. This information needs to be as detailed as possible. The new property management company needs to know what units are completely renovated (and what the upgrades were), what units have been partially renovated (and what upgrades remain) and what units have not been renovated. That way, once they take over management, the can start right where the old management company left off.

 

4. Vendors

The new property management company will need a list of all the vendors who work on the property, like the maintenance person, plumber, painter, appliance repair person, carpet person, drywall person, etc. Similar to the staff, continuing to work with the current vendors will help with the transition process.

 

5. Service Contracts

The new property management company will also need a list of all the contractors who work on the property, like the pest control company, pool person, landscaper, security, etc. And, they will need the actual contracts as well.

 

Other Things to Think About

Firing a property management company isn’t easy and unforeseen difficulties will arise. So, in order to minimize these difficulties, I recommend the following.

First, use soft communication skills when explaining the reason why you are firing them. Don’t call them on the phone, say “you’re fired” and hang up. Instead, I recommend placing the blame for the firing on your passive investors. For example, I would say, “I am getting a lot of pressure from my investors to find a new company to manage the property so we are going to have to part ways.”

Next, read the contract between you and your property management company. Make sure you understand how much time in advance you need to notify the property management company before firing them.

Finally, have a representative from your new property management company address the 5 things I outlined above with the old property management company. You shouldn’t be doing them yourself. Also, have your new representative talk with a neutral party from the old property management company. They shouldn’t be talking to the president or the person who oversaw the property. A regional manager who isn’t emotionally involved with the property is the ideal go-between.

 

What about you? Comment below: Tell me about a time you had to part ways with a property management company and how you approached it.

 

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4 Ways an Apartment Syndicator Can Win Over an Experienced Broker

Real estate brokers can be a great resources for finding on-market and off-market real estate deals. However, do not expect a real estate broker to automatically put you near the top of their go-to client list, especially if you haven’t completed your first syndication deal.

 

After finding a real estate broker, one of the biggest challenges you are going to face is proving that you are the real deal. From the real estate broker’s perspective, there is a lot of uncertainty. They’ll be thinking, “if I begin working with them, are they really going to pull the trigger on a deal?”

 

Therefore, in regards to your relationship with a real estate broker, your main focus needs to be proving that you are a serious, credible apartment syndicator who is capable of closing on a deal.

 

Don’t just take my word for it. Thomas “T” Furlow, who is a commercial real estate investor who has specialized in apartments for years, agrees. Experience real estate brokers won’t take a newbie investor at their word. They must prove, through action, that they are serious. In our recent conversation, he offered four tactics a newbie apartment syndication can implement in order to win over the trust of an experienced real estate broker.

 

1 – Consulting Fee

 

One tactic is to offer the real estate broker a consulting fee. To show that you are serious and that you respect their time, offer to pay them an hourly fee ($150 to $200 per hour), even if you don’t find a qualified deal. In return, you can use them as a consultant, including asking them questions, sending them potential deals to review, having them run rental or sales comp reports and – ideally – having them send you prospective off-market deals.

 

2 – Visit Their Recent Sales

 

Another tactic is to get in your car and drive to the real estate broker’s recent apartment sales. Ask them to send you a list of their most recent 10 apartment sales and visit those properties in person.

 

After visiting the 10 properties, follow-up with the real estate broker, telling them which properties meet your investment criteria and why. In doing so, you are not only portraying yourself as a serious investor but are also giving the real estate broker an idea of what type of apartment you are interested in acquiring.

 

3 – How Will You Fund Your Deals?

 

The third tactic is to provide the real estate broker with information on how you will fund a potential deal. Since we are apartment syndicators, we are raising money from accredited investors. Explain how many people have expressed interest or have verbally committed to investing. Tell them about the strategies you are implementing to find potential private money investors

 

Since you will likely be securing a loan, tell them about the mortgage brokers you’ve spoken with.

 

Anything else related to the funding of the deal should be communicated to the real estate broker to qualify yourself as a credible investor who has the financial capabilities to close a deal.

 

4 – Constant Follow-Up

 

Lastly, and most importantly, constantly follow-up. Whenever you perform a task that brings you closer to completing a deal, notify the real estate broker. A simple email will suffice.

 

For example, if you have a conversation with a lender, provide the real estate broker with their contact information and the outcome of the meeting (i.e. “I met with XYZ Lending. I told them about my business plan and they told me that I will qualify for a loan.”).

 

Once you’ve found a qualified property management company, send the real estate broker their biography.

 

Before sending out a direct mailing campaign, as well as when you start receiving phone calls from interested sellers, notify the real estate broker.

 

However, only follow-up with information that is relevant to completing an apartment deal. The real estate broker probably won’t care much about what you had for breakfast.

 

 

Overall, proving your seriousness to the real estate broker is about communicating your effort towards and commitment to finding and closing on an apartment deal. To accomplish this, you can offer a consulting fee, visit their recent sales, communicate how you will fund a potential deal and constantly follow-up with relevant information.

 

How about you? Comment below: What tactics have you implemented to win over a real estate broker?

 

Subscribe to my weekly newsletter for even more Best Ever advice www.BestEverNewsletter.com

 

 

 

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The 12 Greatest Mentors of All-Time

We regularly post a new question to the Best Ever Show Community, which is where real estate entrepreneurs come to share experiences and advice, including how to find a mentor in real estate investing who can both understand your strategy and teach you more about theirs. In fact, we recently asked, “you can choose ANYONE to mentor you, dead or alive. Who would it be and why?”

 

To attain your ultimate real estate or business goals, interacting with an actual business mentor is vital – or, at the very least, it will aid in increasing the probability of succeeding or expediting the speed in which you achieve massive success.

 

However, an alternative or complementary strategy is to study the unique individuals, past and present, who accomplished greatness. By analyzing the lives of such people, we can determine the habits and strategies that resulted in their success and apply those to our businesses. And what better way to compile a list of history’s greatest minds than by learning about the mentors of active, successful real estate entrepreneurs?

 

That being said, the poll is closed, the responses are in, and here are the answers:

 

If you know me, you already know my answer – Tony Robbins. He distills complicated psychological and mindset advice into simple and digestible tidbits and is an AMAZING motivator. If you haven’t yet, I highly recommend reading his best-seller, Awaken the Giant Within.

 

Though he is not a business mentor, Tim Rhode chose Gandhi because he quietly led a successful movement and did not lose his soul in the process. External success is important, but internal success may be of equal or even greater importance. Click here to purchase Gandhi’s autobiography to learn about how he developed his philosophy that changed an entire country.

 

Grant Rothenburger chose Napoleon Hill for his psychological and mindset advice. A “Tim Ferriss” of his time, Napoleon compiled the principles of the multimillionaires of the 19th and 20th centuries into his world-famous book, Think and Grow Rich, which you can purchase by clicking here. Although, I am sure you’ve read it at least once in your life!

 

Dylan Borland provided a unique answer. He selected Nikola Tesla so that he could get his hands on the plans for Tesla’s perpetual energy device. Of course, I am sure Dylan would reinvest the billions of dollars in profit back into real estate. Nonetheless, click here to purchase a copy of Tesla’s autobiography for a glimpse into the mind of a creative genius.

 

Devin Elder chose Jesus Christ, as he couldn’t think of a more impactful figure in history.

 

Mitchell Drimmer chose Winston Churchill, a Prime Minister of the United Kingdom during the 20th century, because he was resolute. Click here to purchase his autobiography in which he explains how he overcome adversity and major setbacks during the first 30 years of his life.

 

Lennon Lee selected a mentor who is still living – Tim Ferriss. Through Tim, he would get curated bits and pieces of advice from a tribe of mentors. I think Lennon was implying that Tim’s newest book, Tribe of Mentors, is a must read!

 

Eddie Noseworthy picked Rob Dyrdek, who is probably most commonly known for his successful reality TV shows like Rob & Big, Rob Dyrdek’s Fantasy Factory, and Ridiculousness as a potential business mentor. Eddie chose him because Rob seems to squeeze every inch of fun out of the day while being a super successful entrepreneur. Eddie also likes that fact that he has been successful in multiple industries that most people might say he has no business in, which is a testament to his drive and determination.

 

Paul Hopkins chose Richard Branson, because he has started multiple billion-dollar companies and he lives life on the edge. In his autobiography, Losing My Virginity, Richard provides a blueprint to how to balance achieving massive levels of business success and living life to the fullest.

 

Amber Peel went with Beyonce because of her admirable authenticity and legendary work ethic.

 

Going back to the grave, Ryan Groene selected John D Rockefeller. Even though many see him as a negative oil tycoon, Ryan selected him because, to amass such an empire, you must know a little something (or a lot of something) about business. Rockefeller’s biography, Titan, is very popular amongst entrepreneurs and others seeking an experienced business mentor.

 

Lastly, we have Randy Ramadhin, who chose John Willard Marriott because his legacy is worldwide and will endure for generations. In his autobiography, he shares both the story of and the recipe for the success of Marriott International, one of the world’s leading hotel companies.

 

On a related note, if you are interested in learning more about real estate, I have three books I wrote that are full of actionable advice! Check them out on my site.

 

Are you a newbie or a seasoned investor who wants to take their real estate investing to the next level? The 10-Week Apartment Syndication Mastery Program is for you. Joe Fairless and Trevor McGregor are ready to pull back the curtain to show you how to get into the game of apartment syndication. Click here to learn how to get started today.

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How to Build a High-Quality Sales Team That Consistently Brings You Leads

Are you having trouble finding quality leads? Or conversely, do you have so many leads that it’s impossible to contact and qualify them all? If so, hiring an inside sales person may be the solution to your problems.

 

A dedicated inside sales person can man the phones, contacting and qualifying incoming leads or cold-calling property owners to find off-market deals. However, you don’t want to bring on just anybody as your inside sales lead. Like hiring for any job, there is a specific process you want to follow to screen out the duds and only hire the most qualified individual.

 

Dale Archdekin, who has 10 years of experience selling and investing in residential real estate, is an expert at coaching and training real estate investors on building high-quality inside sales team. In our recent conversation, he provided his three step process for recruiting, interviewing and training candidates for a real estate inside sales team.

 

Step 1 – Recruitment

 

Like any hiring process, the first step is recruitment. And lucky for you, the internet allows you to complete this step with relative ease. When Dale needs to hire a new inside sales person, he simply posts advertisements on the popular job recruitment websites. “Just running different ads. Using Indeed, using ZipRecruiter, using anything that you have, pushing the ads out there just like any other job ad,” he said.

 

To maximize the number of potential candidates, Dale recommends that you do not only advertise for individuals with prior real estate experience. Instead, your ideal candidate only requires a background in any type of sales. He said, “That’s the one secret that I’ve figured out. A lot of teams get hung up on trying to find somebody who’s already licensed [as an agent], and in some states, there’s some very heavy requirements around actually getting a license. So, what we do is we look for people that just have sales experience, because we can teach them about the real estate process.” Dale finds that it’s difficult to teach sales skills, but learning the real estate process is much easier for most people to grasp.

 

Prior to conducting long-form phone or in-person interviews, in order to simplify the hiring process, Dale has interested candidates send in a verbal audition. “What you want to do is you want to get as many inquires as you can coming in, and then you want to streamline your process,” he said. “I prefer to have people calling to a phone number and leave a voicemail about themselves. I’ll just have an outgoing message that says something like ‘Okay, give me your name and your best phone number to reach you at, and then in your own words, tell my why you are the best fit for our inside sales department and why you are a sales rockstar?’.”

 

Once Dale receives the verbal audition, his team reviews the recording and determines if the candidate is worth pursuing further. This verbal audition approach will save you a lot of time. You don’t have to read through a bunch of resumes. Moreover, since the majority of their job will be spent on the phone, you can get a good idea of their communication style too.

 

Step 2 – Interview Qualified Candidates

 

The candidates that the pass the audition phase will move forward to step two of the hiring process, which is a role play over the phone. The first portion of the phone call is answering the standard questions about the job –  pay, location, and responsibilities. Once the candidate has an understanding of the job and are okay with the fact that they will be on the phone for over six hours per day, the role play begins. Dale said he will tell the candidate, “I’ve sent you a for-sale-by-owner script. You’re going to be the agent and I’m going to be the for-sale-by-owner. You have to set up an appointment with me. And the only way that you fail this exercise is if you let me off the phone before you ask all of the questions on the script.” In particular, they need to ask the two most important question, which are “are you interested in selling your property at this time and can we schedule an appointment to discuss this further?” When a lead comes in or when cold calling a lead, Dale’s main outcome is to determine if the lead is worth investing time in. So, if the candidate doesn’t achieve this outcome on the roleplay, they fail the interview.

 

The role play recreates the actual situation the candidate will be in if they are hired, so this approach will indicate if they are the right fit for the job. “If I give you explicit instructions that if you let me off the phone you fail, and you let me off the phone because you didn’t want to be too rough on me, you fail,” he said. “If you can’t do it when I specifically tell you not to get off the phone, you sure aren’t going to do it once I give you the job and I’m not listening all the time.”

 

Also, Dale said, “most of these people have zero real estate sales experience. So, going through that script with them … tells us what the level of sales skill they have. Because somebody with more sales skills can basically BS you through anything that they haven’t sold before. They will stay on the phone with you and they will set up an appointment with you even if they’re selling 3D laser prints and they have no idea what that is.”

 

If the candidate asks the money questions and passes the roleplay, Dale invites them into the office for a three-hour calling session. He said, “for the first hour or so, we teach them the script, and for the next two hours, we put them onto a recorded line and have them make real outbound calls to real consumers. Then we get to listen to that and see how they actually did.”

 

After making it through the entire process, which includes the verbal audition, roleplay and real phone calls to leads, Dale has enough information to make an educated decision on whether or not he should offer this individual a position.

 

Step 3 – Training

 

Once a candidate is hired, they are put through a training process. For Dale, he wants his inside sales person to be like an agent, so they are taught everything on which an actually agent would be trained. During this training, he said they’ll learn things like “How does the process work, how does financing work, mindset, time-blocking, understanding the types of leads that they’re calling and receiving, what the mindset of those leads that they’re calling and receiving, and then scripting.”

 

However, what Dale doesn’t want are robots that never deviate from the script. Scripts are to get them started and for them to have something to say when they call somebody. But at that point, Dale wants his sales people to use his three core principles – experience, process and outcome – to guide the conversation. He said, “For any person who’s trying to do anything or who’s objecting to you, that person has some type of experience that they’re drawing from [and] they’ve created a process in their mind that they think is going to get them an outcome that they’re trying to achieve. If you can ask enough questions to understand what their experience is, how they put that process together and what the outcome is and what it means to them, you can show them a different process that can get them to a better, faster, cheaper or easier outcome, and then you can say ‘Would you like that?’.”

 

Here is an example: You are speaking to a for-sale-by-owner and they say “My neighbor sold their home by themselves. They didn’t use an agent, which saved them a lot of money. I’m going to sell the house myself without an agent and I’m going to save a lot of money too.” So, an inside sales person needs to identify their experience, process and outcome. In this example, the experience is “my neighbor sold his house without an agent.” The process is “I am going to sell my house without an agent too.” And the outcome is “I want to save a lot of money.” Now that the three principles have been identified, the goal is to offer a different process that accomplishes the same or better outcome. A simple response would be “Hey, you’re absolutely right. You totally could sell this home yourself, and that’s great that your neighbor did that too. If I could show you how I could not only net you more money that it costs you to hire me and make this easier for you to do, would you consider meeting with me to discuss potentially listing your home with me?”

 

Who would say no to that?

 

How Much Do You Pay an Inside Sales Person?

 

It is important to understand the cost of having an inside sales team in order to determine if it is affordable. Dale pays his sales people around $2,000 to $2,500 a month as a base salary.

 

Since he is acquiring leads with the purpose of becoming the listing agent, his sales people are also paid percentage of the commission on a closing at the end of sale – between 5% and 10% of the gross commission income. On average, depending on the market, Dale pays between $60,000 and $120,000 annually.

 

Depending on your business model, your pay or bonus structure may differ – hourly, strictly commission-based, etc.

 

Conclusion

 

A great inside sales person will help you screen, qualify, and find high-quality leads. The three-step process for hiring this team member is:

 

  • Recruiting – posting ads online and obtaining a verbal audition
  • Interview – phone roleplay and in-person calling session
  • Training – teaching the experience, process, and outcome principles

 

Did you like this blog post? If so, please feel free to share it using the social media buttons on this page.

 

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If you have any comments or questions, leave a comment below.

 

 

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real estate business handshake

How to Approach Hiring an Apartment Property Manager

As someone specializing in apartment building investments, one of the most important members of your team is a property management company. A property manager will obviously manage the apartment for you upon closing, but a great property manager should offer additional services. They should advise on attractive or struggling neighborhoods within your market, offer locations of prospective properties based on your business model, and even provide pro formas (projected financials) on prospective properties based on how they would manage.

 

During the process of hiring apartment property management companies, it’s important to realize that the relationship goes both ways. A prestigious management company will have other investors swarming them for business. Therefore, this must be taken into account when preparing for an interview, because you are being analyzed as well.

 

What follows are the best practices regarding how to hire a property manager and how to approach property management interviews. First, I will provide a list of questions you need to ask, followed by an outline for winning them over, and, finally, a list of questions you should be prepared to answer.

Questions to Ask Apartment Property Management Companies

Prior to conducting your interview, you need to define an outcome. Or, in this case, a few outcomes related to your future apartment building investments. Obviously, your main objective is to find the right property management company that fits your style, business plan, and budget. To accomplish this objective, here is a list of 32 questions to ask during the interview:

 

  • How long have you been in business?
  • What geographic area/s do you cover?
  • How many units do you manage?
  • How many properties does each regional office manage?
  • How many do you own yourself?
  • Do you specialize or concentrate in a particular class of property?
  • What kind of due diligence services do you provide? What is the potential cost if the deal doesn’t close?
  • Do you take on value-add properties?
  • Describe your process for managing a moderate property renovation (How is the status of the work tracked? Who manages the contractors? How are invoices tracked and verified against bids?
  • Who approves the work before the contractor is paid? What fees do you charge for renovation/capex expenses?)
  • What are some of the names of nearby properties that you are currently managing?
  • Has your firm been sued by one of its clients in the last five years?
  • Have you managed any properties that went into foreclosure and, if so, why do you feel this happened?
  • What special training do your managers receive from your company?
  • How do you manage a property’s online reputation?
  • What do you see as the on-site manager’s duties? (turnover, cleaning, repair)
  • Can I interview and approve the on-site manager?
  • What kind of relationship do you want your property manager to have with the owner?
  • How often do you communicate with owners?
  • What is the protocol for communication? Will I be talking to you, the regional, or the property manager?
  • Will you provide a written management plan?
  • What percentage of gross rent do you charge for your management fee?
  • What is included with the monthly management fee?
  • Which property management software do you use?
  • How much time do you typically take to do a make ready?
  • Can tenants pay with auto-withdrawal? What other methods are available to them?
  • Do you require me to list the property with you upon its sale?
  • Will you give me your cell phone number or home number?
  • What are some of the reasons we should use your company?
  • What are the growth goals of your company over the next 5 years?
  • Describe some of your weaknesses and how you hope to improve?
  • Can you send me some redacted financial statements of properties you’re managing?
  • Can you give me contact information for three current clients who have buildings like mine?

How to Win Over the Property Management Company

Again, when interviewing apartment property management companies, remember that they are interviewing you too. They want to be confident that if they bring you on as a client, you will satisfy their business needs.

 

Since property management companies are typically paid a percentage of rental income, their main motivator is to have a client that will close on a deal. At the same time, they don’t want a client with unrealistic expectations of the services they will offer, or to not get fairly compensated.

 

Besides finding a property management company to bring on your team, your other objective is to get them to let you send them deals and offer their expert advice. So, they will only agree to this if you are able to prove that you are capable of fulfilling their wants. You must convey that you are a credible investor who is serious about closing on a deal so that they are confident that you can fulfill their business want. Therefore, prior to asking if you can get their feedback on prospective deals, you need to prove your worthiness. They will accomplish this by asking you questions. However, you can be proactive during the conversation by selling yourself, your relevant experience and/or your team.

 

If you have past investing experience, you shouldn’t have an issue selling yourself. If you don’t however, what relevant experience do you have that will convey to apartment property management companies that you are serious about closing deals? Have you successfully completed projects in a non-real estate related field? Have you started a business in the past?

 

If you are struggling to come up with relevant experiences, this is where having a reputable team comes into play. Sell your team members. Talk about your real estate mentor or advisor’s real estate experience. Tell them about the number of apartment building investment deals that your broker has closed on. And bring up any other relevant relationships you’ve formed.

 

Finally, I recommend preparing an opening statement or elevator pitch. If you already have a deal in the pipeline, say “I’m buying a property in (city name) and am in the process of making offers.” Or another example if you don’t have a deal is saying, “I’m working with ABC broker and will be buying a property in (city name) in the next few months.” Then say, “I’ve done my research on you and would love to learn a little more about you.”

 

You need to get their attention by conveying that you are interested in doing business with them first. Then, you can ask about sending them prospective deals and getting their feedback.

Questions to be Prepared to Answer

To qualify you as an investor, an interested property management company will pepper you with questions too. Here is a list of 7 potential questions you should be prepared to answer during the interview:

 

  • Who is your broker?
  • Have you (or someone on your team) purchased an apartment building before?
  • What types of properties are you looking for? What markets/neighborhoods are you looking in?
  • How did you find me?
  • Are you currently working with any other apartment property management companies?
  • What are your expectations for a property management company’s duties and obligations?
  • Can I see a biography of you and your partners?

 

As you interview management companies, if you cannot answer a question, make a note and tell them you will find the answer as soon as the meeting is over and send it to them.

 

If you’re serious about apartment building investments and learning how to hire a property manager for your syndications, turn to my newest text, Best Ever Apartment Syndication Book, which also includes details regarding how to attract investors and how to sell the property for profit, among others.

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Why and How to Hire the Best Real Estate CPA

If you don’t want to have a heart attack in ten years, or maybe even sooner, I highly recommend hiring a CPA and bookkeeper.

When searching for an investment CPA, first and foremost, you want to make sure they already work with clients who are doing what you are doing, which in my case are apartment investors, or more specifically, apartment syndicators. Therefore, the first question I would ask in an introductory email or phone call is, do you currently work with other apartment syndicators?*

 

*If you aren’t an apartment syndicator, whenever it is referenced in this post, exchange it out with your focus. The process can be applied to hiring a real estate CPA in any niche.

 

If they don’t know what apartment syndications is, that’s obviously an indicator that they don’t work with syndicators.

If they know what apartment syndication is, but they don’t work with any syndicators, that’s not necessarily a deal breaker. However, I would recommend finding someone else because you don’t want them learning the ins-and-outs of apartment syndication on your dime. You want an investment CPA who already knows the types of tax deductions you can take and knows the apartment syndication business model.

If they do know what apartment syndication is AND they currently represent syndicators, then the next step is scheduling an in-person interview, with the purpose of getting into their tactics. To accomplish this goal, ask the following 9 questions:

 

  • How are your fees structured? Get an understanding of exactly how you will be charged. Will there be fees for each time you call in? Can you give them a quick call every now and then and not be charged? Do their fees include the tax return at the end of the year or is that separate? Do they charge a monthly retainer for conversations? How do they structure bookkeeping fees?
  • Who will be your point person? When you sign up for their services, who will you be engaging with? Will it be someone right out of college, a partner, or a mid-level real estate CPA?
  • How conservative or aggressive are you with the tax positions you take? Additionally, does the conservative/aggressive nature of the CPA align with your desires? If taking aggressive stances, how will that be communicated to you for you to understand and accept? You may rely on the investment CPA to prepare your tax returns but, ultimately, when you sign your tax return, you are taking responsibility for it.
  • Does the CPA offer a secure portal to transfer sensitive files back and forth? Tax documents contain a lot of personally identifiable information (social security numbers, adjusted gross income, etc.) via regular email. Stolen identities can wreak havoc on your personal and professional lives for years
  • How proactive are you with tax planning and how to your tax planning services work?
  • Are you able to file tax returns for all state and local governments in the country?
  • If you previously had a failed relationship with another real estate CPA, be upfront with your new prospective CPA about why it failed.
  • What is expected of me as a client? Expectations should be set early and communicated clearly
  • May I have some references? No matter how great the interview goes, always ask for references in order to make sure they are legitimate.

 

After interviewing a handful of investment CPAs, analyze their responses, determine which one aligns with your interests and goals the most and move forward with using their services.

One final note about CPAs/bookkeepers: as your business grows, your needs evolve. Moreover, a real estate CPA who you selected as a beginner wholesaler may not be the best CPA after your wholesale business has grown dramatically, or if your business model has expanded to include other niches. So, as these changes occur, it may make sense to conduct additional interviews – even if only to confirm that you’re current CPA is still the proper choice – and make any personnel changes if necessary.

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The Ultimate Guide to Finding an Apartment Broker

One of the real estate professionals you want as a part of your real estate team is a broker. A great broker is one that sends you deals, and more specifically, sends you off-market deals. However, like all relationships, it must be reciprocal. Most likely, the broker will have countless investors asking them for deals. Therefore, when approaching a conversation with a new broker, it is important to realize that they are interviewing you as much as you are interviewing them.

 

Read on for tips on how to approach these broker conversations. First, I will provide a list of questions you need to ask them. Next, I will outline how you can win the broker over to your side by focusing on coming across as a serious, credible investor who will close a deal. Finally, I will provide a list of questions the broker may ask and that you should be prepared to answer.

 

Questions to Ask the Broker

 

When interviewing a broker, you need to know your outcome of the conversation. For me, as an apartment syndicator, my main goal is to determine their level of experience and success with apartment communities that are comparable to my investment criteria.

 

To accomplish this goal, here is a list of 11 questions to ask during the interview:

 

  1. What is your transaction volume?
  2. How many successful closes have you experienced in the last year?
  3. How long have you been working as an agent? How long have you focused on apartments?
  4. How many listing do you currently have?
  5. How do you find deals?
  6. Do you offer both on-market and off-market deals?
  7. What stage is the local apartment market in?
  8. What is your specialty?
  9. What are the top three things that separate you from your competition?
  10. Will you please provide references?
  11. What haven’t I asked you that I need to know?

 

Ideally, we want to find a broker that will send us an endless supply of off-market apartment deals. However, don’t bank on this, especially in the beginning phases of the relationship. But after you’ve proven to the broker that you’re the real deal, successfully closing on a few deals, it will become more and more likely that you will be the first person who is notified when they have a new off-market deal. It just comes with time.

 

How Do I Win Over a Broker?

 

Again, when interviewing a broker, it’s important to realize that they are interviewing you too. Therefore, put yourself in their shoes and ask yourself “what are they looking for when deciding whether or not to bring on a new client?”

 

Since brokers are paid a commission at the sale of a property, their number one motivator is to close on a deal as quickly and as easily as possible. They don’t like tire kickers, wannabe investors who waste their time asking a bunch of questions but never close on a deal. Their ideal client is an investor who has a proven track record of closing on deals. So, if you don’t have previous investing experience, that will be your number one challenge.

 

To win over a broker during a conversation, you need to sell yourself and your business and build rapport. If you have past investing experience, you shouldn’t have an issue selling yourself. If you don’t however, what relevant experience do you have that will convey to the broker that you are serious about closing deals? Have you successfully completed projects in a non-real estate related field? Have you started a business in the past?

 

If you are struggling to come up with relevant experiences, this is where having a reputable team comes into play. Sell your team members. Talk about your real estate mentor or advisor’s real estate experience. Tell them about the number of apartments your property management company manages. And bring up any other relevant relationships you’ve formed (i.e. contractors, attorneys, CPAs, your meetup group or thought leadership platform, etc.)

 

Along with the asking them business questions, to build rapport, get to know something personal about them. Find out something that’s important to them and bring it up with genuine interest next time you meet. A quick way to accomplish this is to ask, after having already established yourself, “what’s been the highlight of your week?”

 

Finally, I recommend preparing an opening statement or elevator pitch. If you already have a deal in mind, you can say, “I’d like to discuss making an offering on ABC apartment.” Or, another example would be saying “I am working with ABC Property Management and will be buying a property in (city name) in the next few months.” The purpose of the opening statement is to grab the attention of the broker, come across as a serious investor, and address their “want” – which is to close on an apartment – from the start.

 

Questions to be Prepared to Answer

 

Don’t expect the broker to simply answer your questions, chat about their business and personal life and then get up and walk away. If they are seriously interested in bringing you on as a client, they will want to ask you questions as well. Therefore, you need to proactively brainstorm questions they may ask and have ready-made answers.

 

Here is a list of 9 potential questions an interested broker will ask you during the interview:

 

  1. Who is your property management company?
  2. How many units to they manage?
  3. Are they local?
  4. Have you (or someone on your team) purchased an apartment building before?
  5. What type of deals are you looking for? What markets are you looking in?
  6. How did you find me?
  7. Will you sign an exclusive agreement with me so I can get you the best deals?
  8. What are your expectations?
  9. Can I see a biography of you and your partners?

 

And as you interview brokers, if you are asked questions you’re not prepared to answer, make a note and tell them you will find that answer right after the meeting and send them an answer.

 

In today’s market, buyers are a dime a dozen. So, many brokers will simply brush off an investor who is looking to purchase deals. Ultimately, a broker will bring more deals to buyers that they like to work with, and the types of buyers that like to work with are the ones who will close and not lose a deal due to inexperience, laziness or passivity. However, by following the approach outlined above, you will come across as a credible investor who can make aggressive offers and back them up by closing the deal.

 

Did you like this blog post? If so, please feel free to share it using the social media buttons on this page.

 

Also, subscribe to my weekly newsletter for even more Best Ever advice: http://eepurl.com/01dAD

                       

If you have any comments or questions, leave a comment below.

 

 

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How to Approach Hiring a Real Estate Investing Mentor

Ask a successful investor for their opinion on hiring a real estate investing mentor and you’re likely not going to receive the same answer twice. One investor will swear by mentors, saying a coach is a must and it’s impossible to reach the highest levels of success without one. Another will say that mentors are unnecessary and a complete waste of money. And yet another investor will have an opinion of mentors that is somewhere in-between these two extremes.

 

My personal philosophy is more similar to the former than the latter. However, I can find truth in the arguments from both sides, because, like most things in real estate, it depends. It depends on what your expectations are for a mentor. It also depends on why you want to hire a mentor in the first place.

 

In this post, I outline what to and not to expect from the best business mentors, as well as when it is the right time to hire one. You will also learn how to find a mentor in real estate investing, which you should pursue only if you’re expectations and current situation align with the reality of what a real estate investing mentor actually does.

What Should I Expect?

There are four main things you should expect to get out of a relationship with a mentor.

 

Number one is expertise on how to do what you’re wanting to do. The mentor should not only have experience in the same field you’re pursuing, but they should be active as well. If you are a wholesaler, for example, a good mentor is someone who has a successful track record as a wholesaler and is still completing deals to this day. A poor mentor is someone who has never wholesaled a deal or someone who has stopped wholesaling, even if they have a long list of clients who are actively and successfully wholesaling deals.

 

Secondly, you should expect a real estate investing mentor to provide you with a do-it-yourself system for how to replicate their success.

 

Thirdly, and – in my opinion – most importantly, a mentor should be an ally that you can call upon to only talk to about yourself and work out any problem you’re facing, real estate or personal. Since you are paying this person, you don’t have to feel guilty about being selfish or not asking questions about the other person. You don’t even need to be interesting. You can and should talk about whatever it is you need at the moment.

 

The fourth thing you should expect is networking relationships and connections. Since the mentor should be active, they will have relationships with all the movers and shakers in your investment niche. Therefore, they should connect you will team members relevant to growing your business.

What Shouldn’t I Expect?

There are two main things you should NOT expect when hiring a real estate investing mentor.

 

A mentor will not be your savior or your knight in shining armor. Do not expect to hire a mentor and poof, have all of your problems solved. Yes, they should offer expertise, be an ally, and provide connections, but you will still be required to take action. Moreover, the best mentors, rather than being your knight and shining armor, should give you the real estate investment tools and knowledge so that you become your own savior!

 

Also, do not expect a “done for you” program. Actually, if you find a mentor who indeed does offer such a program, run! If a mentor promises you anything that doesn’t require any work on your part, run! The problem with “done for you” programs, assuming it truly is and is not just a scam, is that you’re not learning anything. You are not building the foundation of knowledge required to sustain a business. Even if you are able to attain a high level of success using one of these programs, it is unstable. And once you lose that program, you lose your progress as well.

When Do I Hire a Mentor?

You are ready to hire a real estate investing mentor when you have defined a specific outcome you want to achieve by hiring a mentor. Do you want immediate access to expert advice about your investment niche? Do you want a system for reaching financial freedom? Do you need an unbiased person to selfishly speak with? Do you need to find connections to people in the industry? These are all defined outcomes that can be solved by hiring a mentor.

 

Do you want a mentor because you were told you were supposed to? Do you want a knight and shining armor who will do all the work for you? Do you want a “done for you” program so that you can sit back, relax, and enjoy the returns? These are the wrong reasons to hire a mentor.

How Do I Find a Mentor?

There is really only one effective way to find a real estate investing mentor – word of mouth referrals. That is the only way that I have found to verify the legitimacy of a certain mentor.

 

If you don’t know someone with a mentor, or if you don’t know where to go to get a referral, then you’re probably not ready to hire a mentor. You’ll need to get out in the field and start meeting investors.

Conclusion

There are many differing opinions on the benefits of hiring a mentor. I believe that a mentor can be extremely useful as long as you have the correct expectations and have defined a specific outcome.

 

Assuming your expectations and outcomes are in line with the reality of what a real estate investing mentor can offer, the most effective way to find one is through word of mouth referrals.

 

If you want more details regarding how to find a mentor in real estate investing, review my other posts regarding the best ways to find an advisor.

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