Real Estate Is a Team Sport: Building Relationships for Investing Success

Whether you’re a first-time real estate investor or a seasoned fix-and-flip veteran, it’s important to remember these words attributed to Helen Keller: “Alone we can do so little; together we can do so much.” You won’t find success in the real estate industry by “going it alone.” Just one opportune partnership with the right person or company can have a profoundly positive impact on the results of a fix-and-flip or buy-and-hold investment. Business relationships are the glue that holds a deal together and the vehicle that gets things done.

To be a successful investor, you have to be good at networking and building relationships. For example, it can pay big dividends to be get to know investor-friendly realtors in Metro Washington DC. Local real estate agents can smooth the way for an easy, low-stress real estate transaction. Plus, agents might know about properties with great investment potential that aren’t yet publicly listed on MLS. “Back pocket” listings, not the traditional MLS listings, open up opportunities for new and exciting investments. If a seller is Distressed, Motivated and Flexible (DMF), a real estate investor might just score a good deal. Building relationships and networking with real estate agents in DC can generate a consistent flow of quality leads.

Another real estate professional to buddy up with is a wholesaler. While I’m not necessarily the biggest fan of wholesalers, many of our borrowers make money working with them. Similar to the real estate agents I referred to earlier, wholesalers often have access to off-market properties.

Wholesalers work in different ways. In general, they find and secure properties (typically distressed properties) at a discounted price and then sell them to investors or other buyers. Wholesalers sell properties quickly, often without ever assuming the title. Once they have a property under contract, they assign the contract to a new buyer. For their services, wholesalers add a fee to the price negotiated by the seller, typically between $5,000 and $50,000.

While a majority of wholesalers are honest, hard-working real estate professionals, it’s good to be cautious. Getting to know them and building a relationship of trust and open communication can mean the difference between an investment touchdown and being tackled for a loss. “Trust, but verify” makes good sense in this business relationship. Don’t be afraid to seek legal advice, if necessary, to understand just what you’re agreeing to.

That being said, a good attorney is integral to your success. Building solid business relationships with tax attorneys and real estate attorneys should be a priority for every real estate investor. Tax attorneys or CPAs can advise you about tax implications and tax rules – simplifying the complexities of the IRS and saving you substantial money. Real estate attorneys can review documents before you sign any contracts that you might later regret. Legal advisors can ensure contracts are legally sound and notify you of any legal issues associated with a property or a contract.

This brings us to another business relationship to foster – with title companies. Title companies check public records to verify legal ownership, looking for any issues like liens, outstanding mortgages, or judgements against a property. They work to resolve these issues before closing to ensure that buyers receive a clean title on a property. At New Funding Resources, we allow the borrower to select a title company they want to work with. If you need help selecting a title company, we can recommend several that we developed relationships with.

Investors will also want to develop a healthy business relationship with general contractors and handymen for rehab projects. I’ve written a lot of tips for maintaining a good relationship with your contractor and crew. Link to an article or two In essence, contractors can make or break a rehab project, so make sure you to keep them happy and motivated. You can do this by developing a detailed scope of work, agreeing on the rehab strategy before work begins, paying them on time, and keeping the lines of communication open.

The last business relationship to prioritize is the relationship with your lender. As a hard money lender, we believe that your success is our success. That’s why we offer unlimited project-specific advice. We’ll help to evaluate your project’s profitability, determine a scope of renovations, and discuss various investment strategies.

Business relationships are built on respect, trust, and open communication. The relationship we have with our borrowers demonstrates this. Over half of our business comes from referrals and repeat clients. So, if you’re looking for a long-term business relationship with a reputable private lender in Maryland, DC, or Virginia, contact us. We’ve done business here for years, and we know what works. Our team is ready to work with you on your first or your next real estate investment opportunity.