Investor Mistakes: Not treating Property as a ‘team sport’
Not treating Property as a ‘team sport’ By James Upton
Before I embarked on my property journey, I was a Triathlete.
A hard-grafting sport with an inherent solo aspect to it. Early starts with nobody to motivate you to get out the door at 5am, long 6-hour rides in the rain by yourself where no one would know if you turned around prematurely and went home for a hot shower.
When I got involved in property, I simply expected it to be the same. Individual and competitive, there are only enough properties for a few people, right? Wrong! This is one of the biggest misconceptions and mistakes I made and I see others make it as well. Property is one of the largest team-sports there is and there are more than enough properties to go around.
Luckily for me I started to realise this over the course of my first year in the property game. In my opinion one of the greatest things about property is how diverse the people involved in it are and this is where the importance of teamwork lies. With this diversity the opportunity arises to work with others that have resources that you don’t necessarily have and vice versa.
In my scenario I had jumped straight in the ‘property deep end’, I did not have a job at the time so I went 100% into full-time property investing. However, I did not have a whole lot of money behind me so I was what I like to categorise as “time rich, cash poor”.
With the individual mentality I had grown to rely on in the triathlon world, I would have only been able to proceed at a certain pace in my investing career. Fortunately, I was able to speed up the process by teaming up with a number of other investors that lacked the skills and resources that I had and were acquiring at a fast rate. Generally, these were people that were “time poor, cash rich”.
In short, I had the time to be out in the market meeting agents, buying properties, managing renovations and networking with everyone within the property industry. They had the money and serviceability to fund the properties I was buying and so a number of “team’s” were established with massive benefits for all involved. Instead of having one trade property on the go, which I would have made all of the profit on, I was able to have five on the go and take 50% of the profits. Thus, in turn meant I was able to re-invest those funds into more buy-and-hold property, which for me is the long-term goal.
In addition to this Joint Venture structure I also built up a database of clients that were looking for both trade deals and buy-and-hold properties. In some cases, I would buy a property and if it was more suited to a buy-and-hold investor, I would nominate it over to them and take a fee for finding the deal.
One of these deals only worked at the time as a buy-and-hold property and I was only able to trade at the time. This specific deal was 2 x 2-bedroom standalone, cross lease properties each having a share of the 607sqm of land. The beauty being they are on separate titles and can obviously be rented out separately but when you own both, you control all of land. In this case I did a $10,000 fee for finding and securing this deal and I know for a fact that the investor who I passed this property onto is extremely happy to this day. The two properties are performing very well with positive cash flow and over $250,000 of equity within the properties.
Similar to sport, you are only as good as the weakest link in the team and people generally only remember the last result you have got.
This could not be more relevant in property. If you are finding deals for people they need to be as good, if not better than the ones you would keep for yourself. It only takes one time that you pass on a mediocre deal to someone and your reputation can be tarnished and you are letting down your team.
Over the years I have built up what I like to refer to as my “power team”. These are a number of people who help me perform at the level I need to. This goes from my solicitor through to accountant, mentors, business partners, networking colleges and renovation team. This is an ever-evolving platform and although the idea is to keep the same people alongside you for a good amount of time, it is not always possible. Specifically, my renovation team is consistently being mixed up and changing.
Like most things, when there is more than one person in the fold it is important to make sure these relationships are mutually beneficially, you want everyone to be winning and succeeding. I have found that the better the relationship the longer it lasts and the more profitable it is for all involved.
Teamwork makes the property dream work!
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