Jon Iannotti explains who you need on your team and how they can help the success of your business.
From an investor friendly attorney to virtual assistants, there are multiple people who can help you with your business so that you can concentrate on the more important aspects that attribute to a successful business.
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.
Jon: Hi, everybody. Jon Iannotti here again and I’m your host again today for REI Classroom. Today’s topic is, “Building your Dream Team.”
Mike: This show was sponsored by passiverental.com.
Jon: Now, what is your dream team? Well, your dream team is the people you’re going to put around you, the professionals and the support people that you are going to build your business around you so that they can do the work that you shouldn’t be doing. A lot of this stuff should be done by professionals or by other people in your business.
So one of the first people we need to get on our dream team is an attorney. Now, an attorney should be, number one, investor friendly, should understand creative deals, should preferably own his own title company, closing company or escrow company. So why do I want that? Because when the closings happen, in a creative deal, typically, there’s always something just a little different on each closing and needs to be addressed differently. And if the attorney is already part of the team who’s going to be approving what’s going on with the closing, it goes so much cleaner and so much smoother. So you want your attorney.
Now, number two is the title company or closing company, escrow company. Again, I prefer that my attorney be associated with that company because now, it’s all under one roof. So we can have any questions answered right away and addressed right away. He understands the creative end of the business, he understands the conventional closing as well so everything should go nice and smoothly. So the title closing or escrow company is our second team member.
Then we have one that most . . . I’m going to say probably every guru out there skips. And that is I want a real estate broker on my team. And why do I want a real estate broker on my team? Well, because if I bring a broker in who’s investor friendly, who understands what we’re doing, who understands we’re not doing anything wrong, and I make him an officer of my company, now he’s part of my company. Now, he doesn’t have to have any voting rights or anything else. He just has to be an officer in my company, be part of the company.
Now, any marketing that’s done for the selling of our properties or the selling of our agreements to buy properties can be done through our broker, our real estate broker, who is a licensed professional who can do that. See, we can’t legally anymore market properties that we do not own. And again, nobody else in the real estate world is going to tell you this stuff, guys. You’re hearing it here for me from me for the first time. And I’m telling you if you’re marketing . . . if you’re still out getting an agreement and you’re trying to market that agreement as a wholesale deal, that kind of stuff, forget it.
You can get away with it. As my mentor told me one time, he said, “You can get away with robbing banks too until you get caught,” and the same thing with this. If you’re out marketing properties you do not own, but you have that agreement to buy, in the old days, we could do it. Today, I’m telling you the states are starting to look at this closely. So don’t do it. We do not market properties we don’t own. We do not market agreements anymore. If we do market those, it’s through our real estate broker. The real estate broker is licensed to do that. Not us. And he’s part of our company, part of our team so it covers all the bases. That is a big, big, golden nugget right there, guys. Take that one to the bank.
Now, your next team member is a loan broker. Now, the last guy was the real estate broker. This is a loan broker. Now, a loan broker is the guy who’s going to get our people pre-qualified to see if they can get a loan today, or if they can’t, maybe they’re credit challenged and it’s going to take six months, 18 months, two years before they can get qualified for a loan. He’ll tell us that so that we know whether or not they’re a great tenant buyer.
The other thing is when somebody goes for a loan, if they go to their own bank, they may have one, maybe two loan programs at the bank. And if that person doesn’t fit within that really, really, small box today, they’re not getting a loan. With a loan broker, he has 25, 50, 100 lenders around the country with different programs and they can have maybe a little less stringent boxes to fit into. And you have a better chance of getting somebody financed to buy your property going with a loan broker.
And then, again, you’ve got your loan broker on your team so the whole process of pre-qualifying them and getting them through to closing can be overseen by them and you so you know what’s going on. Control. We love the control. So your loan broker is a key team player as well.
Your next one is you’ve got to have a good contractor. If you’re doing rehabs, or even if you’re just fixing some of your own places, or if you’re doing fix and flips, you’ve got to have a contractor on your team. Now, that contractor should be licensed and bonded. So if they’re licensed and bonded, that’s what you want.
You’ve got to have that or else you’re just dealing with your handyman kind of guy. And the handyman kind of guy is not what you want because if they get hurt, it could come back on you where if you have a licensed, insured, bonded guy, it’s all on them. It may cost a little bit more, but believe me it . . . number one, it gets done, and number two, you’re protected, liability-wise. So you definitely want to have a licensed contractor.
Now, where can you find him? Go to your local REIA, your local real estate investor club. Heck, you can find your broker there. You’re probably going to find an attorney there. You can probably find a real estate broker there as well. Your loan broker, your contractor, you can find all of them guys at your local REIA. And if they’re there, then they understand what we do and they understand investors. So that’s a great place to find these team members.
Another team member is what I call an on the ground guy. Now, an on the ground guy is someone who can go put a sign in the yard, put a lock box on, take pictures, maybe be a courier to take the agreements to get it signed, that kind of stuff. And the minutiae stuff that you don’t need to be doing.
You can get them relatively inexpensive and the best, the best, on the ground guy is a retired male. Why do I want to retired male? Well, number one, I don’t want to be sending a female out to do all this kind of stuff. Number two, a retired guy, he’s worked all his life. He has a work ethic. If you go with the young guy or the college guy, they may roll out of bed in the morning, they may not. They may show up, they may put the sign up, they may throw the flyers in the garbage and tell you they put them out. No.
You want a retired guy. He will get the job done. And my on the ground guy, heck I’ve had him probably for at least 10 years now and he’s been awesome. And I just send him an email, tell him what I want done, boom, it gets done. And he’s $10 an hour. And I just send him a check every time he does something for us. So it’s a cheap, inexpensive way of getting all that minutiae stuff done.
Now, your last one on the list . . . well, there are a couple extra on the list, but those are for more advanced investors. I’m not going to go into those today, but my last one that I really want to touch base today on are virtual assistants. Now, virtual assistants, guys, I started using virtual assistants probably, I think it was 2005, way back when nobody heard of virtual assistants. Then we took that out to the guru world and those guys started pushing virtual assistants all over the place.
Now, there are two types: you have the virtual assistant who’s in the United States, and there’s one that’s in Philippines or India or wherever. I mean, they’re all over the place. What I prefer in a VA, especially if they’re talking to people, is I want a female who
has a Southern drawl because it doesn’t matter if she’s talking to a guy or she’s talking to a girl. They love them and they work out very well. So, I always go with American-based, female, with a Southern drawl if they’re talking to my sellers, especially.
Now, my buyers, I can get by with a guy with a Southern drawl. But the sellers, for some reason, they want that female. So they want to hear that voice. And so that’s what we’ve done since, like I said, probably around 2005 is when we started using them. They charge by the minute so, I mean, American-based, I think I’m paying right now around 33 cents a minute, something like that. It’s nothing and I can get them to do all that front end work, talking to sellers, research and finding the leads and doing all that. And then I’ve got a guy who then calls and talks to the buyers and gets them all situated. And then we connect them all together with the loan broker to see where they can fit in. And then we get them closed through the attorney and the title company. You see how it goes right up the ladder, see, of our dream team?
So if you can put all that together . . . and it doesn’t cost a whole heck of a lot. Your attorney isn’t going to cost you a penny, guys. Your first meeting with them is a consultation. Typically, a consultation is free. After that, he’s approved your documents you’re going to be using. You’re going to use them over, and over, and over, and over. You send your seller and your buyer over to the closing table at the title company, where the seller pays their normal customary closing cost, buyer pays their normal customary closing costs, you don’t pay anything, you just make your money in the middle from selling the property or selling the agreement. There’s no cost.
Your real estate broker, you give him a couple bucks to be on the team. The loan broker, he’s getting paid from doing the loans. The contractor’s getting paid to do the work. The on the ground guy, I’m giving him $10 an hour. The VA is 33 cents an hour. Man, this is an expensive business. You can see how it’s not.
So your dream team is the group of people that you need to keep you legal, compliant, and do all the minutiae stuff so that you can do what’s important and that is you’re always looking for sellers, buyers, and private money. That’s your job as being the guy in charge of your own business. And let’s face it, you’re building a business here and you’ve got to build it right from the foundation up. So let’s start by building it with your dream team. All right. Hey, Jon Iannotti once again from REI Classroom. And I really, really, want to see you at the top. Take care. Bye-bye.
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