The Power of Teamwork in Real Estate Investment
As you all know, the real estate business is a team sport and there is no way to go at it alone. The quality of the people that comprise that team can make all the difference. Here at JB2 Investments, the core team consists of Jeff and Jonathan, but we have a whole slew of vendors that support us, including a CPA, brokers, lawyers, managers, contractors, insurance agents, etc. Without these vital partners, we would not be successful. And to be honest, without these partners, our investors wouldn’t be successful either.
So, let’s dig into why these team members are so important to our ongoing success.
Our Most Crucial Partner – the Property Manager
Hands down our most crucial partners are our property managers. Without them, we would not have the successful operation of our apartment complexes. What we like about our property managers is we run a complex pretty lean because they manage many properties nearby. Thus, the property manager can lend additional support when issues arise. They are also open to suggestions and can mold and change as needed within reason.
Additionally, property managers keep the properties well maintained and take preventative measures so we don’t have larger issues. Of course, a lot of this is acted upon with our guidance and we hold our property managers accountable by holding them to budgets. However, they take on the day-to-day work and take on the brunt of operational responsibilities. It’s a collaborative approach so that any individual investment can perform the best it can.
Brokers are a Vital Real Estate Partner
Brokers are the next most important partner after the property manager. Without the brokers, there would be no deals. We continually follow up with the active brokers in our target areas every two weeks. We meet in person whenever possible to make sure to put a face to a name.
We strive to be friendly and create strong professional relationships because connecting with the broker at the right time could mean getting in front of the deal sooner than the rest. Also, when we take the time to establish a strong relationship with a broker, they are more willing to give us a shot at a property before the whole marketing process begins. So, it’s important to constantly be in their ear, reminding them what we’re looking for so that we stay top of mind.
CPAs and Attorneys Can Help You Save Money
CPAs and attorneys are usually not involved in the day to day but they can save you lots of money and will help protect you throughout the purchasing process. Not only does our CPA help us with taxes, but they assist with monthly bookkeeping for the properties. This ensures that at the end of the year, everything is very organized and we can complete tax returns quickly and easily. A strong CPA also ensures we can distribute K-1’s to our investors early on. And let’s not underestimate the importance of tracking all income and expenses accurately so that we are ready come distribution time.
Attorneys are involved in contract negotiations for acquisitions, syndication documents, and operating entities. We also have them review any major contracts we need to sign. A lot of times, lawyers are part of our insurance policy that help write terms in contracts to protect us from the what-ifs. A strong real estate attorney could save a lot of heartache and money in the future for us. For example, fraud and breaches of contracts can be costly if not addressed properly.
The CPA and attorney play a very important role in the organization and professionalism of our business.
Contractors
We haven’t done huge renovation projects yet with our apartment deals, it is likely we will need a strong contractor in the future.
Having good vendors and contractors can easily make or break a large construction project. The good ones can do things on time and within budget. If for some reason they encounter issues, they can communicate with us so that we are aware and can best limit the amount of surprise and additional expense. Having a resourceful contractor that can point issues out when walking property for the first time can help limit future surprises after ownership of the property. Also, a contractor that does things right the first time helps tenants get in units faster and will save you time and money. With larger value-add deals, contractors are crucial to the success of those projects.
Insurance Agents are a Real Estate Necessity
Whatever you might have to say about insurance and frustration with coverage and costs, having a strong and reliable real estate insurance agent is a must. Since we are operating in Oklahoma, the insurance landscape is a little more nuanced because there are more weather events. So, we like having a local insurance representative that understands those nuances.
Our agent can go visit potential acquisitions and point out anything that could affect our insurance premiums. The right agent will help us buy down our deductible for wind and hail coverage in case we do have issues. This ensures we are well protected and deductibles won’t make a huge dent in our reserves. A catastrophic event at one of our buildings could be disastrous, but having a good agent that can guide us to have the appropriate coverage will save us from that.
Real Estate Investors are a Must
Lastly, we have our investors. Unless you are made of money, the likelihood is that you will need funds to invest in deals. Without the support of our investors, we could not continue to do deals. We are always humbled by the faith that they have in us. We do not take that responsibility or trust lightly. We want to perform the best we can to help grow their wealth because that means a fruitful relationship for us all.
Teamwork Makes the Dream Work
Without all of these crucial team members, we couldn’t be successful in this business. We have a good ability to connect the dots and ensure that everything is working in unison, both efficiently and effectively. We have been able to put together a potent team that is best at what they do. Our investors get lots of benefits from the relationships we have fostered and continue to grow for the better.