- The Washington Times - Friday, March 29, 2002

The first rule of any successful real estate investor is to put together a team of professionals. As you move forward to build your real estate portfolio, there are several people who must be on your team and others I would suggest you consider.

First and foremost is a mentor. Find someone in your marketplace that has gone down the road before you. Finding this person is not that difficult. Talk with your attorney, Realtor or accountant. They most likely know someone who owns several real estate investment properties.

Obviously, the attorney, Realtor and accountant are some professionals you want to have on your team, too.

Talk with your attorney to find out if you should set up a separate corporation to begin investing in real estate, whether you intend to hold the property as a rental or try to flip it in the case of a foreclosure. An attorney can look at your whole situation, including your liabilities as an investor/landlord, the way you'll hold property, how to protect yourself and your assets and other issues of running a company and investing in real estate.

A Realtor, of course, is the rubber-meets-the-road partner (as well as a good investment mortgage lender). You may want a couple of Realtors who deal regularly with investors. This is key. The person who helped you with your purchase of your personal residence may have done a great job getting you into your house, but if he doesn't know the nuances of investment real estate, it would be in your best interest to find another Realtor or two who have done this a few times.

A certified public accountant (CPA) should help you become profitable, knowing the ins and outs of real estate accounting practices. A CPA can help you set up yourself financially for receiving rents, paying mortgages and taxes, funding repairs and, most important, keeping records.

Now that you've started a business, some of your daily expenses will become tax deductible don't miss out by trying to do this yourself.

Next is the mortgage lender. Maybe this is really the first contact you should make for the whole team, but, nevertheless, you are going to quickly find out that this person makes or breaks every single deal that you are going to finance. Eventually, you want to be creating enough cash flow that you are financing your investments yourself, but that's down the road a bit.

The mortgage person has to be creative and needs to demonstrate that he has access to various types of investors. Most likely, you're going to go with a mortgage broker, but if you have a good relationship with your bank or credit union, that institution may have programs available for real estate investors.

Let them know what you're doing, what you want to do and how you want to do it. Don't try to get a loan from them on false pretenses. In other words, if you're planning on buying low and selling high within 60 days to 90 days let them know that so they can structure the best loan for you.

Once you finally own the property, you may want to consider a professional property manager unless you enjoy unplugging toilets, fixing leaky faucets, replacing light fixtures, etc. While you can definitely save some money doing these chores yourself and it may be the way you need to go a property manager removes this final headache of real estate investment from the equation.

The key to real estate investing is to make money going into the deal, make money on the rental and make money when you sell. Your professional team of advisers will ensure you have a strong investment business instead of a money pit.

M. Anthony Carr has written about real estate for more than 12 years. Reach him by e-mail ([email protected]).

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