the-abcs-of-real-estate-investing-ken LifeFeeling

Chapter Three: It Takes a Team
Who was it that said “No man is an island”? Whoever he was, he could have been living
in the twenty-first century because today we don’t do anything without the help of other
people. Even when movie stars win Academy Awards, they never walk up to the podium,
face the crowd, smile, and say, “Thank you. I am quite wonderful for having done this all
by myself.” Instead, it practically takes a vaudeville cane to yank them off the stage as they
thank the hundreds of people who helped them all along the way. Everyone has a team.
Even the Lone Ranger had Tonto and Silver!
Well, in the business of investment real estate, you can’t afford to be a lone ranger. In
fact, it’s impossible to accomplish your goal on your own no matter what your goal is. And
no one is expecting you to. Quite the opposite. We’re expecting you to build an extensive
network and a close-knit team that will be your most valuable resource.
Why Have a Team?
Having a team of experts on call is not free and it is not cheap. Those are the two
biggest reasons why many inexperienced investors make a rookie mistake: They try to do
almost everything themselves. Sure, they may save a few dollars in the short run, but they
usually lose in the long run. Without experts on your team, deals take longer to find,
evaluate, and close, so there’s the value of your time and the loss of valuable opportunities.
Do-it-yourselfers miss details that experts would see in a minute, like clauses missing in
contracts, obvious defects in construction, and hundreds if not thousands of other issues
experts would point out up front.
An expert team on your side means you’ll have fewer surprises as you wade through the
sometimes turbulent waters of purchasing and managing a property. Surprises are wonderful
on birthdays, but the kinds of surprises that come from investment property are usually not
very welcome.
Real-World Case
One investor who decided to go it alone is a man from Seattle who called us right after
he purchased a 100-unit property and asked us to help him manage it. The key word here is
“after.” The property is in Phoenix and he had absolutely no plan for it. He had never
walked into any of the units; he never called anyone to inquire what the resident mix was
like. He never even checked what kind of neighborhood the property was in. When we
talked it was obvious he had not done any research at all on the property; he bought it sight
unseen. The property was in massive disrepair—a nice way of saying it should have been
condemned—and worse than that, it was full of gang members. Even the Phoenix police
department was instructed to never enter the premises without backup.
This man’s laziness on the front end cost him tons of money. I wonder why now, but we
did take on the management contract for this property and the price tag was pretty steep to
get this place back in shape. Outside contractors of every kind, lawyers, you name it, we
hired them all. We sent eviction notices that nearly evacuated the entire place just to get rid
of the riffraff. That meant the owner endured months of significantly reduced income and
sky-high marketing costs to get the property leased. It was a mess that took the better part of