The 5 Must Have People in a Property "A Team"
Every individual sport still has their "A Team". Whether its Roger Federer, Floyd Mayweather, Tiger Woods or Valentino Rossi, all of them have a solid team that underwrites their success. Property buying and investing is much the same. Whilst ultimately it comes down to you as the individual to make choices and decisions, you will not find success without leveraging the skills and expertise of others. There are 5 people/professionals I believe every property investor should seek contact with prior to purchasing property.
Mortgage Broker
The number 1 professional you should make contact with in the initial stage is a good mortgage broker and I don't mean ANY mortgage broker. You should seek one that has a true understanding of your goals, loan structuring, finance strategy and lender policy. The amount of people I see burnt because they went to any old broker is astonishing. Long application times, poor products, locking in to unnecessary loan terms, incorrect loan structuring, cross-collateralised loans are just some of the issues I see when approaching any old broker. The best thing about brokers is that ultimately their fees are extremely similar across the board, so why not look for the best one? This day and age they do not need to be local. Great brokers have clients nation wide and can provide an excellent service remotely. Its important to understand how professionals are paid when choosing to use their service. Brokers are paid by the lender with an upfront fee and trail commission during your loan term. A decent broker should be able to save well in excess of their fee just in negotiating the right product for you. This fee is built into the loan so you will not have to have this cash up front. Brokers should be able to provide a result that is much better than approaching the lender directly. Just like any professional service, a good broker should pick the RIGHT product for you. Their fees are relatively similar across their lender board. Ultimately their business relies on you having a good outcome, repeat business and recommendations. Therefore their success is tied to your financial performance. Just because a mechanic can recommend a new engine for your car every service, doesn't mean he/she will. They wouldn't be in business very long now would they?
Accountant
Every property investor and buyer should have a decent accountant in their corner. It is important to choose one that aligns with your goals and is aware of what you would like to achieve. Accountants provide tax advice and strategy that will allow you to make correct decisions that will benefit you financially. A good accountant can advise which name to put a property purchase in, what deductions are allowed, how to structure your loans to achieve the greatest tax benefit, asset protection and many other complex issues. When choosing an accountant it is necessary to have a strong rapport as they will have a large say in you achieving your financial goals. There is no need to pay exorbitant fees however don't be afraid to pay for quality. Be wary of any accountant that "recommends" other financial products as there is a possibility they are receiving a kickback. Accountants should charge a fee for service and be paid upfront for any work completed. Good accountants are happy to provide minor advice throughout the year free of charge. You should be able to run some simple questions by them and they should be happy to provide general advice. More complex issues should be charged for accordingly.
Solicitor/Conveyancer
Conveyancers and solicitors act on your behalf when purchasing a property. They will check through the contract of sale, liaise with your lender and the seller's solicitor or conveyancer. They sort all the documents needed for settlement and ensure this is a smooth transaction. Conveyancers and Solicitors will perform title searches, calculate any rates or taxes needed to be paid by you or the seller, organise transfers of money to be placed in the appropriate trust accountants and perform land surveys to ensure that all information you have been given is correct. When choosing a good solicitor or conveyancer it is important that they are upfront about their fees, have good communication skills and keep you informed. I also like to have someone that explains legal definitions/terms in everyday language! Let's be honest some of the legal jargon with regards to property can be complex and misunderstood. An excellent solicitor or conveyancer will recognise that not everyone is an expert in their field and be able to explain these terms in an easy to understand form so that you know your rights and obligations. Solicitors and Conveyancers are a fee for service. You should be aware who you will utilise prior to entering into a contract. They will run through a contract prior to you signing anything if you are concerned. I like to touch base prior to making any formal offers on a property. It can be state dependent as to whether you are required to engage a Solicitor or Conveyancer. Also Conveyancers often deal with fairly standard purchases whilst Solicitors may be able to handle more complex transactions.
Buyers Agent
A relatively unknown professional to engage with is a buyers agent. This can be specific to an individual as to whether they choose to utilise this service however there is massive benefits in finding a quality one. Buyers Agents are NOT sales agents. They act on behalf of the buyer and the buyer alone. They are engaged by the buyer to find a property with a certain brief. They are ONLY paid by the buyer - This is an important one! Many sales agents incorrectly identify as "buyers agents" or "buyer managers" in order to sell properties their agency has listed whilst receiving a commission. Others have relationships with developers to sell Off the Plan properties whilst receiving a kickback. The easiest way to tell if someone is a true Buyers Agent or Advocate is to ask "How are they paid". If they are remunerated by anyone other than yourself then they are NOT a Buyers Agent. Buyers Agents may be an expert in a certain area or have knowledge in a certain region. You engage them to find you a particular property by providing them with a specific property brief. They are a fee for service. They may charge a flat fee or a percentage of the purchase price. For me, I'd go with a flat fee model. This removes the incentive for an agent to recommend a higher priced property to gain a larger fee. If a lower priced property is a better fit for the client then this should be recommended first. Buyers Agents find, negotiate and secure a property for you. You may choose to use one if you are time-poor or have limited knowledge in the area you want to purchase or invest. Buyers Agents often have a good network within the area and may be able to secure off-market deals. We can't be expected to be expert negotiators when we only buy property limited times in our lives so using a buyers agent who negotiates regularly is quite beneficial. A good buyers agent will often negotiate a much better deal than what you would be able to secure yourself. They will also ensure you are not left with a dud asset that under-performs. When considering what a small percentage in growth means in $ terms over a few years then buyers agent's fees can be more than justified. I like to think of a Buyers Agent as a bit of an "insurance play". Knowing they have secured a quality asset at the best possible price gives me piece of mind. It is important that your buyers agent will work with your goals and brief whilst maintaining a good personal relationship. Excellent buyers agents work with clients to educate and mentor along the way.
Mentor
Mentors come in many forms. They may actually be one of those professionals listed above. It is important to approach a mentor during our investing journey. Anyone that keeps you honest and on track can be an excellent mentor. Mentors are often people who have been in your shoes or have achieved what you would like to ultimately achieve. They should be approachable and provide an honest opinion of how you are going. You should be able to run questions via your mentor. No question should be too "simple" or "dumb" and you should never feel like you are being "judged" by your mentor. For me I have a few mentors I like to touch base with regularly. These are people who are more than willing to provide their time and wish to see me succeed. I resonate with them and they are always willing to give me feedback based on what I need to hear rather than what I want to hear. There are so many successful people out there who are generous with their time. I find being polite and honest when reaching out to these people is a great way to network. Never underestimate the ability to be "nice" when asking someone for help.
- The Tattooed Investor