When it comes to business, building strong relationships is a must.
Business is not easy nor is it simple but to improve our chances of success, we must build and nurture our relationships to ensure an easier path to success.
Lets face it, you as a real estate investor do not know everything, nobody does. This is why you develop a team and build relationships.
By building a great team and developing solid relationships with excellent individuals in our field, you will increase your odds of building a great business.
Your job as a real estate investor should be to focus on finding new deals (marketing) and financing these opportunities.
All the other variables necessary to turn a profit, should be produced by your team.
However, building relationships with real players that will benefit your business is not easy. Everything you do in business, leaves others with an impression of you. From how you treat them, greet them, the way you dress to how you deal with people on a day to day basis. People have their own judgement of character and they know who they would prefer to work with. People have the ability to sense honesty, sincerity and integrity so if you are lacking in these areas you will quickly be exposed.
In my opinion, business is about creating win, win situations for everyone on your team. By creating win, win situations from the time you begin researching a property to the time you close on the property, most of the time, everyone involved in the deal will be happy.
The quickest way to gain the respect of others is to be upfront and honest. This may seem like an obvious statement, but too often try to act like they know everything about the business and end of failing to produce. By failing to produce, you will end up losing the relationships you have started to produce.
So lets go over the four key relationships you need to build to have an advantage of your competition when it comes to creating a real estate investment business.
The 4 Relationships You Need To Build
1) Private Lenders
One of the key variables to be able to grow your real estate investment business, will be your ability to access to fairly priced money. We all know that it can be difficult to retain funding and truly leverage our business through traditional banks. We also know that if we are not experienced, leveraging hard money lenders can be risky due to the high interest rates and points they charge. The financing that gives us the most leverage and allows for the largest profit margins is private money.
Private money lenders can be anyone from your parents, friends, business owners, high salaried professionals to anyone with money saved up in their bank account. Developing these relationships is no easy task. You need to be able to create a win, win situation, develop trust and prove your experience in order to create a bond that will be beneficial to both parties.
2) Contractors
One of the most common pitfalls you tend to read about is contractor relationships. All over the internet you will read about horror stories between investor and contractor. If you are flipping properties or practicing the BRRRR strategy for your rental properties, the construction department will consist of 35-40% of your business. Finding contractors that are willing to work with real estate investors can be tough. This is due to the fact that real estate investors are looking for the lowest prices, highest quality and quickest turnaround times.
Building relationships with quality general contractors, subcontractors, specialists and handymen will relieve a lot of the stress that a rehab involves. This goes back to creating another win, win situation. If you can still meet your profit requirements while allowing the contractor to make there profit requirements and you can find a happy medium with finish work and turnaround times, a positive relationship can be born.
3) Real Estate Agents
Many real estate investors have this bad persona built around real estate agents and real estate agents the same with investors. For whatever reason, sometimes they fail to get along. I have to admit when I first started my business, I had a few bad experiences with real estate agents that caused me to move away from building relationships with them. When it comes to real estate agents, they says that 10% of the agents do 90% of the business. So, what you need to do is find a couple agents who are the real players and begin your relationship building.
Although you are a real estate investor and you may think you know the market. I can guarantee you that you are not walking as many properties as these agents are each every day. The big time agents know the market extremely well, know exactly what properties will resell for, can assist you with fair market rents and can also help you find deeply discounted properties.
4) Real Estate Attorney
Weather you are new to real estate investing or you are very experienced. Having a great real estate investment attorney on your team is extremely beneficial. When you are seeking an attorney to work with, look for an attorney that works both as a real estate attorney and also has an in house title and closing company. By doing this, they can be beneficial to you in multiple facets of the business.
Your real estate attorney can help produce very strong tenant and lease agreements, promissory notes, loan agreements, handle lawsuits, handle closings, run title reports, updates abstracts & surveys and help with negotiations.
Wrapping It All Up
Relationships are a key factor in developing and growing your business. Every business has employees and a team to help assist the growth of the business. The more good relationships that you can create and nurture the better of your business will be. Work on creating a win, win situation for all of the relationships that you build. Make sure you are always honest, trustworthy and sincere with everything that you do. And also be sure to value in every alliance that you create.
Do you have any connection with the real estate investment business? If so, we would love to connect. CLICK HERE to send us your contact information so we can learn more about you and your business.
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