In the first article, we discussed the importance of building a winning team to support your real estate business. We described and defined each primary member. We stressed how vital it is for your personal development and growth to surround yourself with successful and positive people. Success in real estate depends upon the relationships that you can build, and these relationships will allow you to leverage your time to seek out more deals and grow your business, all while leveraging your team member’s expertise.
The key to building an all-star team is to create win-win solutions. Both sides have to be prospering from the relationship. In our relationships, we demand quality work to be performed, and in return we pay our team members promptly and the going rate. We are always trying to grow their business, and in return, our team members are helping grow our business. If someone is looking for a referral, we always try to refer a team member for the job. As my dad used to say, one hand washes the other.
We split up team members into two groups: Primary and Service Members. Here is the list of members:
Primary Team Members
6. Lawyer/Title Company
7. Management Company
8. Mortgage Broker
9. Insurance Broker
10. Maintenance/ Handy Men
11. Contractors- Licensed plumbers and electricians
16. Ratio Utility Billing Services Company (RUBS)
Primary team members are the core of your business. They will be relied upon and will have the greatest impact and effect on your business. As you grow your business, you will find that you will begin to outgrow some of these members. Don’t be afraid to evaluate your team every quarter to see if your goals and ideals are congruent. For example, you may have expanded your portfolio by another 50 units. Will your management company be able to manage the extra workload, or do you feel comfortable with your current accountant being able to provide bookkeeping services for your additional entities?
Service members are an important element to your business, but you may employ a few of these members to service your business. They are much easier to replace than primary members, but are vital to having your business run smoothly.
I would like to highlight a couple of these members and show you how we derived value from our relationship.
Many of the properties that we acquire have laundry rooms that are either non-functioning or in disrepair. Our goal is to renovate these rooms and install washers and dryer that are new. We use a company called Coinmach to service our laundry facilities. They install new machines, guarantee to service the machines, and in return, we agree to a revenue split of 60/40 (we receive 60%). I view this as a win-win. We get new machines, have no worries with maintenance and have someone else collecting coins monthly. Coinmach receives a stable monthly flow of revenue.
I can hear some of you out there complaining about having to share the revenue. You would rather keep the entire revenue pool. It all depends upon what your goals are for your business. There is no right or wrong answer. Jake and I feel that our time can be better served if we concentrate on tenant issues and managing the property, driving the team to maintain occupancy rates high and focusing on customer service.
I can hear a lot of you out there grumbling about dealing with painters. We have been through our fair share of painters, but we finally latched onto a great crew. We have been able to save precious days on our apartment turns, which leads to happy tenants and a healthier bottom line. We have grown to the point where it makes sense for us to contract out our painting jobs due to the sheer volume of business that we perform. It may make sense for you to have your maintenance team tackle this job.
When we acquired our first property, the next purchase was a lawn mower. We instructed the resident manager to add it to his list of responsibilities. With additional acquisitions, this strategy was also amended. We contracted out a landscaping company to mow the lawns and maintain the appearance of the grounds of the properties. Most real estate investors rank landscaping as one of the most important elements in the appearance and value of the property. You only have a few seconds to make a great first impression, so concentrate your efforts on the exterior of the property.
It is surprising in this day and age that many multifamily properties lack a website or any type of presence on the internet. A website is a terrific, low approach to advertising your business and increasing the occupancy of your property. Most tenants search for apartments on websites such as Zillow, Trulia and Craig’s List.
Having a website that ranks high in the search engines will make it easier for prospective tenants to find you. To get an idea of what an effective website looks like, visit our site at www.randpropertymanagement.com.
If you are the type of person that likes to do things themselves, it has become pretty simple to build your own webpage. Visit WordPress to get ideas on how to build your own website. I would recommend a professional to design your site and help with your SEO (search engine optimization). It has made a huge difference in our marketing and filling our vacant apartments.
The difference between a business that is struggling and one that is thriving has a lot to do with relationships created and team members that have been assembled. Try to surround yourself with team members that are motivated and see the big picture. You can train talent but it is virtually impossible to train attitude. Have you ever wondered why every employee who works at Disney is happy and appears to be an upbeat person. It is because Disney targets this type of employee and understands the value of a happy, motivated member.
We hope you have enjoyed this article on assembling a quality team. Please leave us a comment below and tell us who else you would add to your real estate team.