This article is an excerpt from the Shortform book guide to "Buy, Rehab, Rent, Refinance, Repeat" by David Greene. Shortform has the world's best summaries and analyses of books you should be reading.
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What are the connections you can make out of real estate networking? How can meeting other real estate professionals improve your business?
In his book, Buy, Rehab, Rent, Refinance, Repeat, real estate agent David M. Greene says that in order to build your investment “Dream Team,” you need to start by doing some real estate networking. By putting your name out there, you’ll make connections with real estate agents, lenders, contractors, property managers, and vendors.
Keep reading to learn how to start real estate networking and how you can build a team from it.
When you start investing, Greene says you need to assemble a team of people who you’ll work with on property after property. He calls this your “Core Four”; we’ll call it your Dream Team. Your team can be created by utilizing real estate networking and making connections to people in the field. Greene explains that the members of your Dream Team are not employees, but rather vendors and collaborators who specialize in working with real estate investors, which requires different knowledge and strategies than primary residence homeowners have.
(Shortform note: Greene offers two main pieces of advice for how to find the members of your Dream Team: First, build a reputation as someone people want to work with—by being fair, reliable, and helpful. Second, get recommendations through your real estate network. But how do you build a network? Attend professional real estate networking events, meetups, industry conferences, and open houses; host investment classes, parties, and charity events; and make an effort to constantly meet new people, both in-person and online.)
Your Dream Team has four roles, though Greene advises having two people in each role to provide backup if one person becomes unavailable. The four roles are:
- Real estate agents, who help you find and negotiate good deals on properties
- Lenders, who help you use loan programs that are best suited to you and the circumstances of each project
- Contractors, who know how to add maximum value to your property for minimal cost
- Property managers (PMs), who can handle most tenant issues and requests with little oversight and can advise you on prospective investment properties
Real Estate Networking as an Investor
Greene emphasizes the importance of ensuring your Dream Team members are investor-friendly. Investors have different needs and demands than primary residence owners, so you need to use your real estate networking to find members of your Dream Team that will have the knowledge and skills to cater to investors’ interests.
- Investor-friendly real estate agents are versed in the area’s micro-markets, so they know which neighborhoods offer the best investments, and they have access to off-market properties, which gives investors a leg up on competing buyers.
- Investor-friendly lenders understand investors’ objectives and work to get you approved for the high volume of loans needed for a large investment portfolio.
- Investor-friendly contractors are likely to have lower prices because they expect you to bring a steady flow of new projects.
By definition, property managers would not work with primary residence homeowners.
It will take time to find the right people for your Dream Team, but once you do, you’ll build your relationships through your network and develop more efficient systems by working together repeatedly. In some cases, because you consistently bring them business, you can even save money—for example, by asking for a lower agent commission, a discount on contractor work, or reduced management fees.
(Shortform note: Greene specifies that the members of your Dream Team are so important because they have the skills and knowledge to help you beyond performing their primary responsibilities—for example, a good PM not only manages properties but can also connect you with reliable handymen and estimate how much you can reasonably charge for rent. However, as a real estate investor, you’ll likely work with many other vendors, such as a bookkeeper, accountant, lawyer, notary, home stager, and photographer.)
Finding the Right Contractor
As we mentioned, each member of your Dream Team should have experience working with investors. Greene describes an investor-friendly contractor as one who knows how to find cost-effective solutions to problems (like repairing instead of replacing worn flooring).
If you don’t yet have a contractor on your Dream Team, Greene suggests a few strategies for finding one through networking in the real estate world:
- Ask your property manager (PM) to find five new contractors to bid on each project, and pay your PM $50 per bid. This allows you to meet and compare several contractors so you can quickly find the right one for you. (Shortform note: To make it easier to compare bids, ask each contractor to distinguish materials from labor costs in their bids. This also allows you to verify the cost of materials.)
- Network with other real estate investors and find out which contractors they work with. However, they may be reluctant to share this information for fear that your work will pull contractors away from their projects.
(Shortform note: When working with a contractor, your first project will be the riskiest—that’s when you’ll discover the contractor’s working and management style and find out if they can deliver the work quality and timeline they promised. If the contractor finds an issue that they previously overlooked, like outdated plumbing, the repair could derail your budget. Additionally, if the contractor gets other jobs and prioritizes those projects over yours, you’re likely to go over the deadline, which delays your rental income and refinance and also increases the risk of people noticing and breaking into your empty property.)
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Here's what you'll find in our full Buy, Rehab, Rent, Refinance, Repeat summary :
- An explanation of the BRRRR real estate investment method
- How to use the BRRRR method to produce consistent, passive income
- Why you should assemble a "Core Four" team rather than working alone