Checklist for Building Your Investment Team
1. Initial Team Establishment:
- Identify the types of professionals needed for your real estate investment team.
- Research and list potential real estate agents, solicitors, accountants, and valuers.
- Evaluate the experience and expertise of each professional in relation to real estate.
2. Before Property Search:
- Ensure your team is in place before beginning your property search.
- Discuss and align your investment goals with each team member.
- Establish clear communication channels and protocols with your team.
3. Team Capabilities for Quick Actions:
- Verify the team’s ability to act quickly in various market conditions.
- Conduct a readiness assessment for quick transaction closures.
- Develop a strategy for fast decision-making and offer placements.
4. Research and Analysis:
- Coordinate with your team to effectively research properties before making offers.
- Plan for comprehensive property evaluations including legal, financial, and physical aspects.
- Implement a process for thorough market analysis and property valuation.
5. Making Informed Offers:
- Discuss the implications of conditional versus unconditional offers with your team.
- Ensure financial readiness before approaching a property deal.
- Involve your legal advisor in reviewing and making offers on properties.
6. Legal Advice and Support:
- Seek a real estate solicitor experienced in the Australian market.
- Have your solicitor review sale documents for any unique conditions or legal complexities.
- Utilize legal expertise for complex transactions, especially those involving special financing or loan assumptions.
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7. Selecting the Right Legal Help:
- Decide between using a solicitor or a conveyancer based on the complexity of your transactions.
- Evaluate the cost versus benefit of each option.
- Ensure your legal advisor is skilled in conveyancing and property law, particularly in tenancy and commercial lease laws.
8. Continuous Team Evaluation:
- Regularly assess the performance of your team members.
- Stay informed about changes in real estate laws and market conditions.
- Foster a culture of ongoing learning and adaptation within your team.
9. Inspecting with a Building Expert:
- Hire a qualified builder for property inspection, regardless of the property’s age.
- Obtain a building report and a pest-inspection report, each costing around $400-$600.
- Schedule building and pest inspections about a week before an auction.
- Use the inspection reports to understand current and potential future maintenance issues.
- Consider using the reports for price negotiation if major flaws are identified.
10. Working with Real Estate Professionals:
- Understand the role of real estate agents in marketing and selling properties.
- Acknowledge the commission-based structure of real estate agents’ fees.
- Learn negotiation tactics used by agents to align buyer and seller price expectations.
- Be cautious when disclosing your budget to agents.
- Research and understand the role of buyers’ advocates in the property buying process.
11. Utilizing Buyers’ Advocates:
- Consider hiring a buyers’ advocate for impartial dealings and local industry insights.
- Understand the commission structure of buyers’ advocates.
- Assess the benefits of advocates in identifying underpriced properties and negotiating prices.
- Verify the advocate’s expertise in the local market and their investment criteria.
- Ensure the advocate’s investment strategy aligns with your financial goals and risk tolerance.
12. Understanding the Advantages of Advocates:
- Recognize the potential cost savings and risk reduction offered by advocates.
- Evaluate how an advocate’s property recommendations align with your investment criteria.
- Consider different property investment focuses, such as tax minimization or geared properties.
- Determine if the advocate’s approach matches your income and wealth creation plans.
13. Building the Right Team
- Identify real estate professionals with expertise in your target geographic market.
- Verify the professional license status of each team member.
- Obtain and check bona fide references from recent clients.
- Choose professionals with strong communication skills.
- Select representatives with proven negotiation skills and a reputation for honesty and integrity.
14. Utilizing Real Estate Agents
- Build relationships with agents specializing in your desired property types and areas.
- Regularly communicate with agents for updates on local market trends and opportunities.
- Be strategic in sharing your budget and investment preferences with agents.
- Utilize agents’ insider knowledge to access unadvertised properties and exclusive deals.
- Balance agent interactions with your own research through the internet, newspapers, and other listings.
15. Evaluating and Avoiding Risks
- Stay vigilant about property spruikers and their get-rich-quick schemes.
- Be skeptical of property investment seminars and avoid impulsive commitments.
- Research the background and track record of any seminar or course before investing in it.
- Approach property deals offered by developers with caution, considering additional costs and potential overpricing.
16. Dealing with Developers and Leasing Agents
- Understand the risks and benefits of purchasing properties directly from developers.
- Consider the advantages of buying slightly older properties over brand-new ones.
- Assess the need for leasing agents in managing your investment properties.
- Evaluate potential leasing agents based on their property management portfolio, vacancy rates, fee structure, and tenant screening processes.
17. Financial Planning and Valuation
- Seek a financial adviser who can provide holistic and unbiased investment advice.
- Prefer financial advisers who offer fee-for-service arrangements.
- Ensure your financial adviser supports and understands property investments.
- Use valuers for their insights into property value, market dynamics, and renovation potentials.
- Leverage valuers’ expertise in identifying properties with hidden value-add opportunities.
18. Maximizing Investment Returns
- Regularly consult your financial adviser to align property investments with your overall financial goals.
- Utilize valuers to assess the current and potential value of properties.
- Diversify your investment portfolio to protect against market volatility.
- Stay informed about market trends, legal changes, and investment opportunities.
- Continuously evaluate and adjust your investment strategies based on market and economic conditions.
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