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I still vaguely remember the time when I struggled with chopping garlic, ripping lobsters apart, and asking my father, "Argh, dad, why do I have to learn how to cook?"
He placed his hand on my shoulder and said, in a fatherly authoritative way, "Son, when you get older, you'd realize that women won't be cooking for you and you have to do that yourself." And sadly, with respect to my family, that has been the case for the past two generations.
As a grown man who now knows his way around the kitchen, I can't help but to think this lesson can be applied to real estate as well.
When I first got into real estate, I had hoped I could rely on a team of real estate agents, contractors, property managers and so on to build the real estate business quickly. After all, they are the professionals and you are just starting. You can leverage their strengths and make everything work.
Relying on Others Isn't Always Reliable
Of course, that wasn't the case. During my first purchase, I relied on a property manager to rent my property out. The property was in a great location and the rental price was reasonable. However, one month passed, and by the second month, I slowly realized the property manager did not care for my property and listed it on the MLS website with old pictures. Furthermore, I let the same company's contractors to put the finishing touches on the rehab. As a result, I paid too much for the work and I had let the property sit on the market for too long.
After that I searched for another real estate agent with better contracting experience. And once again, I relied on him for a rehab and realized the team he put in together was not good and we came too much over the budget to flip the property. Ultimately, I found someone else to finish the work and the property was turned into a rental. Nevertheless, it was an extremely frustrating experience.
The Turning Point
But the third time was a charm. I finally decided to grit my teeth and learn everything about rehabbing. I worked alongside a handyman for my third attempt. I watched everything he did and had him explain to me many aspects of fixing things around the house. I even tried to put up a ceiling fan by myself. Despite the frequent electrocutions, I was starting to get better in understanding different aspects of rehabbing and, more importantly, became familiar with what materials cost.
I started renting houses myself. I experimented with Craigslist and signs and met prospective tenants myself. I knew I wasn't the best at it. But I was involved with the process. I had control. I was able to make the call and hold myself accountable. It allowed me to review my mistakes and continually improve. It was a long, arduous process, yet ultimately rewarding. By dealing with prospective tenants and tenants myself constantly, I was slowly becoming a better property manager. I wouldn't say I am all that great, but at least now I can set it up so I can be away for weeks at a time and yet still keep everything running in place.
Learning to Buy
I worked on my buying as well. I used to just rely on my agent to bring me what are considered deals. Then I started scouring MLS myself and constantly visit properties, whether they smelled horrific or looked like they would collapse at any moment. I learned so much that I can now quickly assess a property and know if it is a good deal. Furthermore, I started learning about finding private sellers, buying houses from them, and negotiating on having them finance your purchase. I was able to build my business at a much faster pace once I began working off the MLS. Even as the real estate inventory began to shrink, I was able to accumulate a decent number of properties last year.
Learn to Wear Many Hats
I would've never been able to improve my real estate business had I just relied on "experts." I had to dive in and figure out everything myself. Otherwise, how would you know if you had been lied to? I may not be a great property manager, rehabber, or buyer, but at least once I tried all these areas myself I've learned about what mistakes to look for and what I can improve upon. Having knowledge in all areas of real estate is crucial to your success. You do not have to be perfect in each area, but being a generalist serves a much greater purpose than being a specialist. And you have to get involved with every aspect of the business, no matter how small or how big, at some point, in order to effectively operate your real estate business. If your handyman happens to be sick, you can fix that leaking toilet. If that tenant decides to cause a ruckus, you know how to properly deal with them. And so on. Once you have it all figured out, then you can start outsourcing all your work to others. Now you will know what needs to be done, how much time, at what cost, and etc.
So even if you haven't built the greatest real estate team yet, you can still commandeer the business in a good direction. Just like my life now, even if I have trouble finding someone who could whip up an amazing meal for me day in and day out, thanks to my father, at least now I know I can cook a semi decent meal for myself.
By Leon Yang
Leon's Website: http://www.hardworkingpenguin.com
The post A Good Real Estate Investor Needs to Wear Many Hats is property of The BiggerPockets Blog. and is Copyright © 2012 BiggerPockets, Inc. All Rights Reserved.
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