Don’t Fly Solo
Experienced real estate and private note investors will tell you they didn’t get where they are by trying to do everything on their own. Yet many of those same people will also tell you they didn’t do exactly that when first starting out. In fact, they may have stumbled along the way and learned some lessons the hard way. But to avoid those same stumbles you can learn from the experience of others. You need some team players. Here are some people you should surround yourself with.
Hard money lender. A hard money lender is a necessity. Establishing a relationship with a hard money lender is essential for a real estate investor. A hard money lender can provide you with the details on rates, costs and fees involved when considering a potential purchase. Hard money lenders provide access to funds to purchase and rehabilitate a property that banks won’t touch due to the current condition of the property.
Conventional lender. When you take a hard money loan to buy an investment property and intend to hold onto the unit for the long term, you need a relationship with a traditional lender. A conventional loan will be used to pay off the hard money loan and finance the unit over 10, 15 or 30 years.
Real estate agent. Whether you’re in the market to flip an investment home or you’re in it for the long haul, perhaps your most important team player is your real estate agent. An agent gets paid when you buy and sell properties and, at your instruction, always be on the lookout for your next project. An agent can put together the necessary numbers together for you to review as well as dig up comparable sales in the area to assist with your decision. The agent can manage the property, find new tenants as well as list the property for sale.
General contractor. You need an experienced, reliable contractor who can assist in the evaluation process. A contractor will know to look for hidden problems with a property that an inexperienced person may not notice. Telltale cracks in door jambs or ceiling stains can indicate foundation issues or problems with the roof.
Inspector. An inspector will perform a similar function as your general contractor yet an inspector will go into more detail what the property might need from flipping light switches, faucets and checking the water heater and HVAC systems. It’s not uncommon for a real estate investor to hire the services of more than one inspector when reviewing a potential purchase.