Due Diligence on Professional Services

Mike: Welcome back to the FlipNerd.com REI Classroom, where experts from across the real estate investing industry teach you quick lessons to take your business to the next level. And now, let’s meet today’s expert host.

Greg: Hi. I’m Greg White with Imagine Home Realty in Detroit. I’ll be your host on the REI Classroom today. Today, we’ll be discussing due diligence on professional services.

Mike: This show is sponsored by PassiveRental.com.
Greg: So you’re ready to invest. You’ve researched the market. You’ve researched the type of home. Now, you’re ready to begin looking for service people to help out. Generally, the first thing that people do is reach out to a real estate agent via Trulia, Zillow, Realtor.com, Homes.com, some other form of Internet advertising website, surrounding homes. This is not always the best direction to go in because there are a lot of professional service people on the other side that are going to receive those inquiries or leads that may not specifically deal with investment properties. Whether it be your plans to buy this as a rental and hold it, or even to fix and flip.

Some real estate agents are luxury real estate agents. Some real estate agents only deal with short sales. There are a lot of different niches in the real estate industry. So finding a professional service member that actively works in what you’re looking for is generally your best bet. I deal specifically with investment properties here. I don’t sell any traditional real estate, no luxury real estate. So here in metro Detroit, our team handles investment property buying with our brokerage.

We also own a construction company so we can rehab these properties, and we own a property management company so we can ultimately manage these homes for our investors that are as far away as California, here in the United States, and as far away as Australia or New Zealand, around the world. Looking to find professional services is one of the most important things. You have to build your team. This is not only real estate agents, but also contractors, property managers, attorneys, and it can be other things.

When dealing with rentals, a good property manager is a must have. They’re kind of the beacon for all things, keeping the property in order between the tenant and yourself. So all of the relations to the tenant, all the rent collections, all the correlations to the owners and the owner payments, as well as everything else that falls in the middle. So a solid property manager is a must.

Do research. This is one of the best things that I can tell you. If you have colleagues that are also investing or have previously invested in the market, your best referral that you’re going to get is from somebody that you know. They’re going to be honest with you. They’re going to tell you, “This professional service member did a great job. They’ve never let me down.” Or they’ll be happy to tell you that there are massive issues and that you need to look for someone else.

Sometimes it’s best to just get the company on the phone and ask them for a referral. We have many clients that’ll call us from different countries, say from London or Australia, for instance, from the UK, and they’ll ask us if we have done business over there before. It’s very important to people to know that you’re trustworthy, but also that you have experience working with their country. So when that happens, we have many clients all over the world and I’m able to share with them referrals from people that might just live right down the street from them. They’ll pick up the phone and call them.

So don’t ever be afraid to ask the company that you are interested in working with if they have referrals. Especially if you’re in California, for instance, and you’re investing here in Michigan. Ask for more referrals in California. See what it’s like for them working states away, or working countries away overseas. That can be some of the most important information that you can get, and the easiest way to vet a company. A lot of these companies are very easy to open, especially management companies. People will open them in their basement overnight and begin to take clients.

Some of the worst horror stories I’ve ever heard from clients trying to salvage their portfolios come from property managers who were never really property managers, had no idea what they were doing. So do your due diligence. Check out all your professional services. Get referrals. Do Google research. Read reviews. All of these things before you’re ready to actually start investing with a specific team or a specific professional service member will make your job a lot easier when you’re ready to actually pull out the wallet. Thanks.

Mike: PassiveRental.com is your source for turnkey, done-for-you rental properties. If you’d like to be an investor and not a landlord, please visit PassiveRental.com to learn how to purchase cash flowing, professionally managed rental properties in the hottest rental markets across the country. We can also help connect you with financing for your next property. Invest the easy way today and get started by visiting PassiveRental.com.

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