If you are buying real estate as a partnership, your team members are going to directly impact how that real estate is managed. Your team members may vary depending on the partnership needed to purchase the asset(you need an SEC attorney if you are syndicating).
If the real estate is syndicated, you have the benefit of skilled general partners and extended team members to manage the asset. This is fortunate for individuals who don’t have the time, desire, or patience to deal with the day-to-day process of investment real estate. Syndication allows passive investors to be in the partnership as limited partners.
In order to find, manage, and execute investment opportunities, there are some CORE team members that everyone will need. These roles are CRITICAL, regardless if you are buying individually or via partnership. Let’s find out who the main players are!
Commercial Broker
This is often a single person but could be multiple people if a company is large or invests in multiple geographic regions. Commercial brokers are the ones who actually find properties that an investor/company can invest in.
When choosing your broker, make sure to choose someone who has an intimate knowledge of the real estate market locally and has a strong network. Not only will this help brokers source deals, but the best brokers are able to find deals from both public listings and off-market opportunities.
Commercial Lender
The commercial lender is the person that underwrites a commercial loan for the properties that the team acquired. They will help clients assess risks that may undertake by purchasing the property, negotiating an interest rate, and defining the terms of the loan. The lender’s main obligation is to complete their own due diligence and underwriting for each loan requested.
Property Manager
The property manager is the most critical partner to an asset owner. They help with underwriting by validating rent projections and expenses; they are the boots on the ground executing the business plan.
The property manager is the person or even a group that physically takes care of a property while it’s owned by a company, this includes everything from maintenance, repairs to listing vacancies and screening and approving tenants. The property manager has a dual responsibility: to the owner or client who is interested in the highest return from the property; and to the tenants, who are interested in the best value for their money, including reasonable safety measures and compliance with fair housing laws.
Real estate Attorney / Title company
In syndication, there’s so much paperwork that you really need your general counsel. That’s why you need your real estate attorney because they help oversee the legal aspects of real estate transactions. They will help you prepare and review legal documents relating to real estate; they will help you negotiate the terms and conditions of real estate transactions, and facilitate the transfer of titles. Tip: Do not cut costs here, because they are worth it! They can help you prevent costly problems in the future.
Commercial Insurance
The commercial insurance broker acts as the middleman between clients and insurance providers. They are an essential piece of the puzzle! Their extensive knowledge on policies they provide can benefit clients by finding the policy that best fits the asset and business plan.
In Closing
The right team is essential to success, and there are pitfalls even experienced business people can’t see. A solid team is important if you want to have profitable return and to avoid future problems, it is always good to research and find people who can work without hand-holding.
If you want to know where we are building teams in our markets, check out the investment strategy at www.tbcapitalgroup.com