But, if you haven’t bought a property yet and you are hung up on building your power team, I think you are focused on the wrong thing.
I’m locked up in my office today working on a real estate investing course for beginners. To make sure I cover off all of the questions and concerns of a first time real estate investor I am going through all of the emails we’ve received over the past few years along with the 150+ surveys our Rev N You with Real Estate newsletter subscribers filled out in late October. And, way too many would be investors ask about getting their “Power Team” together and comment on “not being ready to buy a property because they haven’t put their power team together”.
I know… if you’ve read anything by Russ Whitney or Robert Allen or even Rich Dad Poor Dad… part of their system includes you building your power team. But what’s the point of rounding up a lawyer for your contracts and a high powered lawyer for litigation and meeting with five different banks, if you aren’t going to do a deal with them right away? And quite frankly, I hope you never need that high powered attorney for litigation!
Let’s face it – we only have so many hours in a day. Use those moments of spare time effectively to move yourself towards your goals as quickly as possible. So, if you are new to real estate investing and you are clear on your real estate investing goals, then your next step is market research, not power team development. Before you start calling anyone:
- Do some market research. Does the market area have strong fundamentals? Is there population and job growth? What is the vacancy rate trend? What plans does the government have for new infrastructure? If everything looks like it’s positive, look at property values in that area relative to rent, and then start looking for an opportunity.
- Look on Craigslist, Realtor.ca, and For Sale By Owner websites to get a sense of the properties on the market. Use other tools like Rentometer and HousingMaps to get rental estimates. If rental rates seem reasonable for what most properties are priced at, dive deeper. If it’s nearby take a walk around the streets. If it’s not, ask someone you know to check out some areas to see what’s going on. If you find some properties of interest, THEN look for a real estate agent. If you don’t find any properties with potential you might want to look in a new market.
- When I find a real estate agent that is comfortable working with a real estate investor (the big questions to ask the agent are “How do you know when a property makes a good real estate investment?” and “Are you comfortable doing creative deals?”. If you like the answers to these questions and you feel good about the agent… you’re all set), start looking at some properties.
- At this point, contact a mortgage broker and start looking for a lawyer that can help me with the purchase and sale agreement and a partnership agreement if you’re doing a joint venture.
You could do this in another order. But, if you are just starting out, even if you have grand plans of buying 10 properties this year, you should take baby steps.
Get comfortable with market research and finding properties. Get clear on your real estate investing goals.
Then, you can narrow down your search to the experts in the area of interest and communicate confidently with the people you’re looking to work with. You will make progress towards your goal without getting bogged down by the daunting task of talking to five banks, five mortgage brokers, five realtors, several appraisers, inspectors and accountants.
Put first things first… and that first thing is finding a great investment. After you do that, you’ll find that everything else comes together.