In the western world, individualism is highly valued. The iconoclastic hero is the self-made person.
Responsibility for one’s actions cannot be over-emphasized. It is a myth, though, that great things are created through individual effort alone. Our world thrives on cooperation, not competition.
Many perceive Real Estate Investing as a cutthroat business. Yet, it is a business that lives and breathes on cooperation and team building. This post discusses the importance of having a stellar real estate investing team. It also reveals how you build a winning real estate investing team to create financial freedom to live the life of your dreams!
Naturalists, Biologists, Anthropologists, Archaeologists, and Historians find more and more evidence that the successful survivors are cooperators. From the simplest species to the most complex, we find interconnections and cooperation. Those that cooperate survive to thrive!
Cooperation in the Natural World
We see cooperation in the insect world. Ant colonies and bee hives thrive through instinctual cooperation. In the avian world, birds of a feather flock together. We see vast examples of collaboration in the marine world. Schools of fish swim together. Great whales hunt together. Orca families stay together for life.
Land mammals form herds and tribes. The most dominant species on planet earth, humans, are the greatest cooperators in our known universe. Humanity’s most significant accomplishments reside in our highly developed capacity to cooperate!
Building Teams and Why are they essential?
As an Organizational Psychologist, I have extensive training and experience in team building. As an administrator in higher education, I spent my career building teams. My internal team consisted of about 125 personnel. My external teams were composed of personnel in every other unit throughout the university.
I thrived in the role of team building. Under my leadership, numerous student support programs were launched and successfully executed. The success of all these programs rested on the cooperation of interconnected teams.
Before real estate, I was adept at developing high-functioning teams. These transferable skills are indispensable to real estate syndication. A high-functioning syndication team will produce high-level results that deliver projected rates of return for real estate investors.
How much does a real estate investor make a year?
The question is often asked, how much do real estate investors make in a year. Some investors make nothing. Some real estate investors lose money. Other real estate investors make millions in a year.
Many factors determine how much a real estate investor makes in a year. Market conditions go through cycles. Some investors have vast experience. Other investors shoot from the hip without the knowledge necessary for success.
Sometimes deals that look good on paper just turn out bad.
However, high-functioning real estate investment teams that provide excellent property management on investment properties can turn duds into properties that produce millions in cash flow!
How do you build a real estate investment team?
A team is needed to make millions in real estate investing. This is true in all aspects of real estate. It is vital to success as a real estate investment syndicator. Building a team requires self-knowledge. Cooperation is critical, but each team is composed of individuals.
The reason teams are essential is because no one person is skilled in everything. To be an influential team member, one must know what skills one has that best contributes to the whole. That means the best place to begin when forming a team is to do a self-inventory of skills, knowledge, interest, and experience.
How to find out about your skills and strengths?
- Get help in doing the self-inventory. Ask friends that you trust for feedback. Here is one suggestion for asking trusted friends for feedback. Ask them to share with you what they would tell someone else about you if you were not in the conversation. Ask them to talk to this other person about the number one best skill and ability you possess.
- A formal inventory can also be helpful. The VIA Survey of Character Strengths is a FREE inventory that can help identify your strengths. The survey can be found at the Center for Authentic Happiness at the University of Pennsylvania.
- The Big Five Inventory is a personality test. A short version of the test can be taken online for FREE at Psycho Tests. This will give you a general idea as to your personality. A more extended version of the test can be taken for FREE at Personality Assessor. Search for the IPIP 120 test. On this site, you’ll have to register. The IPIP 120 results are more accurate than the shorter version, and the feedback is more comprehensive.
Share the results of the tests and inventories with trusted friends. Solicit their feedback. Do they agree with the results? What aspects of the products ring most accurate for your friends? How have they seen the traits and skills at play in the interactions they’ve had with you?
When you complete the self-inventory and know your strengths, you are ready to form a team. Compatibility is essential, but you want team members that complement rather than duplicate your strengths. Diversity of skill, abilities, perspectives, and experiences bring power to teams. For success, you want a diverse team.
How does a real estate investment group work?
There are two aspects to building a real estate investment syndication team. An internal team and an external team of experts will support the internal team.
The internal team will form the General Partnership. The more diverse yet compatible the team, the more solid the real estate investment team will be. With the diversity of skills, personalities, and experience, a well-grounded team can create a thriving and successful real estate investing operation and generate financial independence for all involved!
Key Team Members
The skills and experience needed to form an internal real estate investment syndication team are as follows:
- Acquisition – the ability to find prospective investment properties and do a preliminary analysis
- Analytic skills – the ability to analyze potential investment properties
- People skills – the ability to comfortably and confidently interact with a variety of people in meet-ups, conferences, and association meetings
- Marketing skills – experience with database management, lead funnel systems, and follow-through
- Technical skills – information technology experience to manage the syndication website and assist with content development and delivery
- Content developer – experience writing blogs and online course development
- Investor relations skills –human relations experience asking for investment money with skills at maintaining these relationships
- Negotiation – experience negotiating purchase agreements and other contracts
- Management – organizational oversight experience and the ability to work with a diverse team
- Investors – Capital to invest. Investors are sometimes part of the syndication management team. The largest pool of equity investment capital comes from passive real estate investors.
These are all high-level skills. Ideally, there will be one internal team member to fill each skill area. For new teams just forming, each team member will likely take on more than one role.
Administrative assistance is also necessary. With the availability of virtual assistance, many of the administrative responsibilities are now handled by external sources. As the real estate investment business grows, it may be better to move the more critical administrative services inside.
The specifics of how the syndication’s real estate investment team works will vary from team to team. As the team forms, the first agenda item is the definition of work responsibilities. To function effectively, real estate investment teams need clarity of boundaries for each team member.
Without clearly defined team member roles, there will be inefficiencies and confusion. Team members will become frustrated and discouraged. When teams are forming, roles are difficult to define, and they will evolve over time. Nevertheless, teams that are just developing should give serious thought to each team member’s roles and responsibilities. Each member should do their best to adhere to the assigned roles.
Real Estate Brokers
Everyone dreams of finding those illusory off-market deals. Though they do exist, they are few and far between. Often when found, they are not viable. Commercial real estate brokers are an essential part of the team. For a syndication enterprise to succeed, good relationships with brokers are vital. The bulk of real estate investment opportunities are going to be found by commercial real estate brokers.
The essential backbone of real estate syndication is a high-functioning property management team. A low-performing property management team will doom even the best real estate investment deals. A qualified property management team is the key to turning a low-performing rental property into a cash-flowing income-producing property. Great care must be taken in selecting the property management team. The property manager will either make or break the investment.
Hemlane is a nationwide property management company that partners with local property management and contractor teams. They provide a seamless process for all professionals involved in the management process to communicate and collaborate. Get to know Dana Dunford, CEO of Hemlane, by tuning into Creek Side Chats podcast episode 149.
Attorneys – Three types of attorneys are essential.
- An attorney well versed in securities law will provide the Private Placement Agreement for the real estate investment offering.
- A corporate attorney will provide the Operating Agreement. There are no short-cuts when it comes to these two documents. The appropriate execution of these documents will ensure compliance with the Securities and Exchange Commission.
- In addition to a security attorney and a corporate attorney, an attorney familiar with state and local real estate law is needed for closing the real estate investment property.
To learn more about security and corporate law while becoming acquainted with security and corporate attorneys, tune in to these episodes of Creek Side Chats:
Leverage being an essential component of profitable real estate investing means that every syndication purchase will be carrying debt. An excellent relationship with mortgage brokers and private lenders is critical.
For value-add property investment acquisitions, there is almost always a renovation component to the repositioning and stabilization plan. An enterprising and reliable contractor must be part of the team. Beyond the initial rehabilitation of properties, there will always be ongoing repair and maintenance. The renovation and repair, and maintenance contractors are very unlikely to be the same contractor. They provide very different services. A broad network of professional contractors will be a part of any successful real estate syndication team.
both provide comprehensive restoration and rehabilitation services throughout many regions of the USA.
Good inspectors are the key to the due diligence process. Every unit in every building must be inspected. The electrical, plumbing, HVAC, sewage, and roof are expensive items to replace. Exterior features such as parking lots, thoroughfares, sidewalks, playgrounds, swimming pools, and all common areas will need to be thoroughly inspected.
Where to find team members
Friends, family, co-workers, and local organizations’ involvement are all places to meet and get to know people. Share your intentions of building a team. As your network grows, more options become available.
The four places listed below are places where you are sure to find team members.
- Real estate meet-ups
- Real Estate Conferences
- Real Estate Podcasts
- Referrals from successful real estate investors
Key points for a successful team
Beyond professional qualification, every member of a high functioning team must possess these four essential personal characteristics:
- Responsive – Return calls promptly, stay on top of responsibilities, and promptly attend to all internal and external demands.
- Trustworthy – Be honest in word and deed.
- Reliable – Show up when and where expected on time and prepared.
- Enterprising – Go above and beyond. Always strive for excellence.
When do you call your Real Estate Investment Team Successful?
Let me talk about my own team building for instance. I’d say I have a successful team that works together like a well-oiled machine. Why?
Because my team members have the authority and wisdom to make day-to-day operational decisions. They are empowered to decide and take appropriate action. They do so every day. They do not need me there to put out the brush fires. My goal as a team leader has always been to put myself out of a job.
At a higher education conference I attended, a Dean from another university said to me, “It is nice to get away from the campus for a few days. I know, though, that 100 brush fires await me on my return to campus.”
I, on the other hand, was confident that my team would carry on in my absence. Any brush fires that arose would be handled because I had a solid Team. Because my team was empowered and there was a clear line of communication.
When your real estate investment team members are responsive, trustworthy, reliable, and enterprising, it is easy to empower them to make decisions and take action. A high-performance real estate investment team is composed of team members with all these qualities. Empowerment inspires and encourages.
Ask yourself, what kind of boss do you want? Would you prefer a micromanager or a manager who trusts you to make the right decisions and take the right actions? Most people prefer the latter.
As crucial as empowerment is, communication is just as important. No one wants to be left in the dark. Clear and accurate information is also critical for keeping morale up, and team members enthused.
The bad news is much easier to take and absorb when communicated timely and accurately. When there is a lack of communication, bad news travels fast through distorted channels.
Transparency communicated through open and honest channels will always trump secrecy.
So what does a successful real estate investor do? The answer is simple. A real estate syndication investor successfully does their job as a team leader when they put themselves out of a job.
With so many investment options, confusion as to where to invest leads to inaction. Schedule a FREE – NO OBLIGATION – NO STRINGS ATTACHED call. Or email me with your questions and thoughts at allen@SteedTalker.com. I’ll help you sort it all out, and you’ll soon be on your way to prosperous investing to live more abundantly in all areas of life.
About the Author — Dr. Allen Lomax
With careers in academia, podcasting, and real estate investing, Dr. Allen Lomax inspires us to break open our minds’ secrets to discover individual and universal well-being. Through passive real estate investments, he helps enlightened investors create time freedom to live abundantly in all life’s areas.