What are the Magic Questions? What makes great teamwork? Often times, we all get caught up in the logistics of things, the data charts, the hard numbers, the returns on investments, the projections… and while all of those are really important about making financial decisions like investing in rental properties, so are the people you work with. If you are not working with a team that has your dreams, and your goals in mind, you could be preventing yourself from growing.
Great article from Think Reality
by Engelo Rumora | 10 May 2016
You know what really ticks me off about most of the investors I deal with? (And I’m putting that nicely, believe me!)
And I speak to a lot of investors on a daily basis, from all over the world—from the East Coast, West Coast, the UK, Canada, Australia and Asia. We have investors from Korea to Madagascar. They all have one thing in common that very much annoys and frustrates me: They all get stuck in the stats and demographics. So they ask questions about vacancy statistics in a particular area, capital growth projection, population growth, employment numbers and job growth.
Yeah, that’s important, but there’s something even more basic that you simply have got to understand.
Focus first on relationships with the right people
I always like to break it down to them like this: “Guys, you have it completely the wrong way around. You shouldn’t be asking those questions. What you should be focusing on first is establishing relationships with the right people on the ground.”
I very much believe that “teamwork makes the dream work.”
Here’s how I see it: If you buy the best house, in the best streets, in the best area, with the best capital growth projection, but your property manager is incompetent or a cheat, you are going to lose money because he is going to steal your rent or he is going to lose it. When you break it down like that, it really doesn’t matter what you see online, what you see on TV or what you read in the papers, because at the end of the day it comes down to the people on the ground either making or breaking your investment. They are your eyes and ears, your heart and soul.
This is true for out-of-state or out-of-country investors, and it is also true for those who are investing in their own backyard. Let’s say you are not buying a turnkey product. Let’s that say you want to go out find a property, buy it, renovate it, get a tenant in it and manage it all yourself. You are still going to have to entrust a local Realtor whom you trust to have your best interest at heart and not just want to sell you just any property that comes across the desk. You will want a great contractor who is going to renovate that property to a standard enabling it to be self-sufficient and sustainable. So he should not be cutting any corners. You will want a genuine property management company that is not going to nickel-and-dime you to death with every little expense.
You need a long-term perspective
These are some of the key people who are going to assist you in your real estate endeavor. I always like to look at it from a long-term perspective. You do not want to work with anyone who is all about instant gratification. What I mean by that is, someone who just wants to sell you a property, or renovate your house, or whatever it is, and do everything very quickly.
No matter what you might hear, or read, or see on TV, real estate investing is NOT a get-rich-quick undertaking. You have to be in it for the long-term—and so do the people you have on your team.
Let’s say, for example, you make an average income, or around $55,000. In order for you to achieve financial freedom, one property is not going to cut it. You need to buy and hold five, 10, 15, 20-plus properties, and it is going to take five, 10, 15, 20-plus years for you to acquire such a large investment portfolio.
So you have to look at it from a long-term perspective. Whomever you establish as your dream team or that group of people you deal with, they have to have that delayed gratification type mindset and really have your best interest at heart for the long-term. Make sure they’re not all about that quick money but that they really want to grow you and grow with you over the next five, 10, 15 or 20-plus years.
OK, I know what you’re thinking. You’re saying, “Engelo, that’s easy to say, or maybe that’s easy for you, but how can I tell if somebody has that long-term mindset?”