Why it is important to build a team and how to do it

Real estate investing is not a solo act, especially if you're doing it remotely. Building a solid team is crucial for success. But building good relationships with solid agents, property managers, CPAs, contractors and those who you can outsource the endless things that come up is tough. In this episode, we share why having a team of real people you can count on is so important and how you can go about building yours.       Episode Links: https://www.roofstockacademy.com --- Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Michael: What's going on everyone? Welcome to another episode of the Real Estate Investor. I'm Michael Albaum and today I'm joined by my co-host Emil Shour. And today Emil and I are going to be chatting about why is it so important to build a local network? And then actually how do you go about doing that if you're not local to that market? So let's get into it.   Alright, Emil, it's been a while man, how are things in your world? What's going on?   Emil: Things are good. I have very good news report so the triplex is fully leased.   Michael: Yes, yes!   Emil: Finally, we're good. We got the townhouse portion leased at the rent we wanted. And that pesky one bed, one bath, finally rent it out as well to two solid tenants. So that's making money.   Michael: Congratulations. So how long was it making four in total?   Emil: The one bed one bath was vacant for about six, seven months.   Michael: Okay.   Emil: Including, including like the three months it took us to, like get everything fixed. You know, it was like, major contractor crunch and all that stuff. So that took us like probably three, three and a half months. And then like three or four months vacancy, which sucked but we are through it now. The townhouse took like two months to rehab, and then it was probably vacant for a month. You know, we like went into December getting ready to lease it up. And that's like the worst time to try to rent something because it's holidays and people are checked out. But New Year and new tenant so certainly right.   Michael: Sweet, man.   Emil: Yeah.   Michael: Very exciting. And you had some reserves built into your pro forma, right?   Emil: Yeah. So we've, I think we've talked about on another episode, I actually just keep my real estate checking account separate from everything else. And I don't touch any of that money only, it's only to reinvest, right, so the rehab budget came out of this bank account, I didn't have to like go and grab it from somewhere else. Everything kind of just goes into its own real estate account. And just, it's just used for subsequent properties or yeah, like the reserve.   Michael: Okay, cool. I guess the point that I was getting at is that you had money set aside for a rainy day. And the fact that your property is vacant for six months means you didn't have to go sell it because you couldn't afford to pay the mortgage on it.   Emil: No, man we talked about on the show like don't… don't liquidate, don't use every penny. I mean, a bank won't even let you do that. You know, they require some reserves, but you always have to have some money on the side. And the worst thing you can be as a force seller, right? That's what we've talked about here. And that's not when you want to sell you want to sell because you have a good opportunity now because you have to.   Michael: Totally. Alright, well, let's shift gears here and talk about why it's so important to build a team, a local team, or maybe is it even important to build a team so curious to get your thoughts your remote investor, you invest out of state. Do you think it's important to build local relationships? Where you're investing?   Emil: No, I prefer not to have anybody doing anything. We just fly blind.   Michael: One man wolfpack!   Emil: I believe my tenants will, will handle all my repairs, pay rent on time, all that good stuff.   Michael: …And when there's issues…   Emil: Exactly. Yes. You know, as a remote investor, you are nothing but your team. And I always say the property manager is number one, right? They are your they do everything for you. They manage it. They are handling all the stuff that you don't want to. So to me, that's the when we were talking about this episode. That's the person who comes to mind the most and that I'm always thinking about and talking with other investors, like when they invest locally. That's the that's the person I was wondering, like, who's your property manager? Who you using? How's it been? How were vacancies? How returns? Do they find good contractors, all those things? That's always what the number one person I care about.   Michael: Yeah, that makes total sense. And so I'm curious, how do you go about finding your property management companies?   Emil: Okay, so in the beginning, let's… Let's just get like, let's just use a real example, right. The St. Louis triplex, so this was the first…   Michael: The infamous triplex…   Emil: The infamous triplex… The single family homes I bought, I bought them all through Roofstock. I typically went with someone who was listed as a preferred property manager. Most of them worked out worked out some of them didn't, and then switch to other property managers. Well for the triplex because I bought it off of Roofstock. I think maybe that's one a little bit more interesting. So…   Michael: Wait, you bought it not on Roofstock? What you say, you bought something off someone that could be confusing?   Emil: Yeah, I bought it off of Roofstocks platform.   Michael: That’s still confusing…   Emil: So am I still confusing? I bought a triplex through the old fashioned way…   Michael: …through the MLS.   Emil: …., real estate agent MLS…   Michael: Love it, love it.   Emil: So this real estate agent, she had a couple property management companies that she recommended to me. So I think she had a list of four or five that she liked that she'd heard good things about through other investors who she's helped out. Long story short, I use two property managers from that list. They were both terrible.   Michael: Oh man…   Emil: The property manager is the hardest one to find. Because I think when you talk to them, I.. we've probably done episodes on this. When you talk to them, they tell you exactly what you want to hear. They've talked to tons of investors, it's really hard, I've found to get a good sense for how they're actually going to perform day to day. I think like the best way to do it is you just always have to be trying to connect with other people in your market and like getting reviews firsthand. I think that's the only way to do it.   Michael: Okay. And how do you go about getting those? What it’s like, what if you're new to Kansas City, you don't know anybody? How are you going to talk to other investors?   Emil: There is the Rootstock Academy.. wink wink, nudge nudge, right, lots of investors there who it's.. it comes down to community, right? Whether it's going on bigger pockets, the forums, they're talking to people who like there's always a thread on who are the best property managers in Kansas City. And you'll see people chiming in, you can message them. I've done that before I actually met someone who invest in St. Louis, who lives in LA as well. So you know, I've networked with people that way, in the academy, tons of people there networking, sharing best practices, sharing their favorite vendors, ask people in there who they're using in St. Louis. My current property manager, I actually got introduced through you. You have a friend who invest in St. Louis, they bought like a 27 unit building and they love their PM. You know, you heard me talking about how frustrated I was with my property manager, and then you're like, hey, check these guys out. So I had a call with them, things went well. And we're testing them out. And look, they got two units leased up faster than my other property manager did. So off to a good start.   Michael: Yeah, I think on top of that, too, like there's Facebook groups. Every, every major metro, I would garner has Facebook group for the local investors. And there's local investment meetup groups, if you can do in person stuff, I just think searching for whatever market you're interested, in investment group, in a real estate investment group and seeing what shows up is going to be huge. And then like, like he just mentioned, to your point, like talk about it, talk about it with everyone, you know, because it would have been, I would have never made that connection with my buddy Nick to think, oh, I can introduce Nick's property manager to Emil because Emil can't stand his. You know, talk to people about what it is you're looking for what it is you're trying to accomplish. And I don't invest in St. Louis. And so you're probably not thinking as you're talking to me. Oh, Michael probably know someone like no, but investors know investors who know investors who know vendors…   Emil: You…The meetup you mentioned that's a good one. There was… it was kind of a forcing function of COVID. They went virtual with this local real estate meetup in St. Louis. And I met a couple of people that way. Most of these places have gone back to in person. So it's a little bit tougher now. But that was kind of a cool way. I started meeting some local St. Louis people. I actually met some other remote investors in St. Louis as well, because they now had access to these, these meetups as well, because it was virtual.   Michael: Oh, sweet. You should ask like somebody to bring a laptop and place it on a seat in the hotel room wherever there.   Emil: Yeah, yeah…   Michael: Yeah, I mean, I was just thinking another places Twitter, like, I got on Twitter a couple years ago. And we hosted like an investor meetup from all over the country, which… Remember that?   Emil: I do. Yeah, that's right. That was fun.   Michael: It was a lot of fun. And you just meet random people, and you just talk about investing. And so I think, I think people, especially if they don't know, anyone that invests in their immediate circle, thinks that there's no one out there, that they're all alone in this planet. They're the only investors when that's really not the case. It couldn't be further from the truth. So you have to know where to look. And those places we mentioned, I think, are really good places to start looking.   Emil: Yeah. And they're all communities, right? Like whether it's a close community slack group, an online forum, or social media, those are all different communities and just people talking.   I would say one thing as I'm kind of thinking through this, talk to when you ask people as people who aren't other vendors, don't ask your agent or insurance person for them. It can be helpful, but I would say they're not dealing with them day to day, and like seeing how they actually operate the business, right, like, as an investor, try to find other investors to ask them one learning for me. I know. You know, here's to get your take on that.   Michael: Yeah, I would take the counterpoint. I think that good professionals know good professionals. But to your point, like you've experienced the opposite. Yeah, I guess, I guess a follow up question for you is, how was that transaction working with that agent?   Emil: She's a great agent, she was super helpful went into videos for me. And she was like, really helpful every step of the way. I loved working with her. If I'm just being really honest, I think it's like…   Michael: Which we are, hope you are…   Emil: Yeah, like, like, look, one vendor we become friends with another, they'll refer each other business, who knows if they're getting a kickback for that, but it's really easy for it to get muddied, I think and again, they can just be friendly with them and think they're a great person is like a fellow business owner. But you're not seeing it as like an investor who you're dealing with their actual operations and their team. So that's why I think, I just want opinions from other investors personally at this point.   Michael: Yeah, yeah well, what a great follow up question to add to someone's like, list of interview questions as you're chatting with someone, an agent, for example, and say: Hey, do yoo…Do you have any property management recommendations? Oh, yeah. Company, ABC. As a follow up to that, well, hey, what is your working relationship look like with that… with that company? What you know, what experience do you have? Oh, they're a friend of mine, this and that, or all my investors work with them. That's who, you know, that's who everyone goes with.   Emil: Right.   Michael: So that question might give you a little bit of insight into what you might expect.   Emil: Sure. You can even ask them for other you know, if they work with, they say they work with other out of state investors, ask them for a reference to another out of state investor right away.   Michael: Totally! Emil: That can be you know, your way to hack a little community for yourself and talk to other people and network.   Michael: Totally. No, that's great, that's great. And if you don't get network references, or recommendations, like literally just go on Google. Go online and search for who are the best property management companies in the area and start calling them one by one by one and talking to people. And it's a really painstaking process. But there's no like, there's no replacement for that. No one's able to do that work for you. And so we always talk about how real estate investing is. So front end, work intensive, and there's a lot of legwork on the beginning. How did that term come about- a lot of legwork. …Is running around ...   Emil: …running…Yeah,yeah.   Michael: I guess yeah, a lot of legwork. A lot of ab work to go on in the beginning part of real estate…   Emil: It's all arms.   Michael: I saw the shirts with like friends, don't let friends skip leg day or something. It's this huge dude with little chicken legs, and I guess he had grass… So just call these people call these companies and have real conversations with them and try to get a feeling of who's gonna be a good fit to work with you. Because, Emil, you and I think have very similar investment theses. And but we have very different personalities. And so a great fit for you might not necessarily be a great fit for me from a relationship perspective. And would you agree that your property manager is going to be the person that you have the closest working relationship with from anybody in your team?   Emil: Yeah, cuz you know, your agent important, but you do a transaction… And then, you know, there could be a long pause. It's not ongoing. The property manager, you're constantly dealing with them.   Michael: Yeah, you date your agents, you marry your property managers that quota here.   Emil: Here we go, here we go…   Michael: Yeah, you want to make sure it's gonna be a good fit, you know, to make sure it's gonna be a good fit. And so I think, again, there's no replacing that work.   Emil: Agree, agree, front end, do the work. And if you ever get that feeling you and I've talked about this, not on the podcast, you ever get the feeling, like, man, I don't… I'm, you know, that feeling in your stomach where you're like, I don't know if this is going to work out. Some oftentimes, it doesn't. So start doing some of that homework early. You know, just as a backup, you may not have to pull the plug, but it's good to start doing the work early, in case you want to make the switch. You don't have to go looking when it's too late or whatever.   Michael: Yeah, I mean, to that point, I did that, I didn't listen to that little person inside of me. I had this call, and I'm like this, like, it'll be fine. It'll be fine. And I think because like the alternative was going to do more work, and going to go find other property managers, which I was like, it's like, I… it's, it's fine. And then six months later, here, I am, like, ah, stupid, stupid, like, I should have just done, you know, an extra four or five hours’ worth of work or to save me months of headache.   Emil: Yeah, you know, like, it's not fun to do a lot of interviewing, but it's what you have to do. And that's what you have to do.   Michael: Yeah. Awesome. So we covered networking with other investors just in the importance of that, we covered how to actually go find property managers. Anything else we should cover on today's episode?   Emil: You know, I think that this… we use property managers specifically, but I think it applies to lenders, right, you've, you've gone… you mentioned Twitter, you went on Twitter and asked people for recommendations on a lender for something really specific, right? And you got a ton of responses that have led you to some interesting places to go look.   Michael: Yeah, yeah, super good point. Like, for anyone that doesn't follow me on Twitter, you might not know. So I posted a loan quote that I got for a cash out refi that I'm working on. And I thought it was great. And I said, I just put it out there for the world to shred it apart, you know, which is always kind of risky. And people are like, that's awesome, sign the term sheet now. That's killer, too, I can do way better, like, what's your email, and I ended up getting a rate that I worked with a current lender that I actually got introduced to via Twitter, and the rate that I'm getting is like a full 1% better, and the cash out that I'm getting is a full 5% higher. So it's like you it's not what you know, it's who you know.   Emil: That's right, that’s right…   Michael: And that wasn't me trying to be braggadocious just simply to illustrate what…   Emil: Sure Michael…   Michael: …networking would be.   Emil: Yeah, you got cloud on Twitter and a lot of real estate people know you.   Michael: Oh, my God. Not at all, not at all. But so it really think like crowdsource so much of your stuff. By that same token, don't take everyone's advice just because they're willing to give it to you. Look, make sure to vet you know, who's telling you what, look for people's track record now with the internet it's so easy to do.   Well, that was our episode everybody. Thanks so much for hanging in there with us as we rambled and meander through that journey. If you made it till the end, kudos to you for sticking with us. As always, if you liked the episode would love, love, love a rating or review from you. We always love to hear from you all. And as always, I look forward to seeing you on the next one. Happy investing.   Emil: Happy investing.