“It feels like herding cats,” Alex said. These were the words out of a relatively new syndicator’s mouth when he talked about the small team he’d built. Building a team is always difficult – from sports to business, there are plenty of opportunities to get it wrong.
Alex had made one key mistake when creating his team: he’d hired the people he knew, rather than the best people for his team. Sometimes, the people you already know and trust really are the best people for a team, but sometimes they’ll take liberties. In Alex’s case, it meant that he spent all his time chasing after people rather than the next big opportunity. It was costing him time and money, and he knew it was going to cost him relationships sooner or later.
Alex spent the next few hours talking to experienced syndicators about how to get out of the mess he found himself in. They talked him through which team members to keep, and which he’d have to let go of. It wasn’t going to be easy, but it would be absolutely necessary if he was going to reach his goals.
Of course, the best time to put in this work is before you bring people on to your team. It’s a lot easier to just not bring someone on as a team member than it is to terminate an existing relationship.
Even when you think you’re doing it all right, you can make a misstep if you don’t know exactly what to look for. In this article, we’ll share all the common pitfalls so you can build a strong multifamily syndication team that quickly goes from strength-to-strength.
Who You Need On Your Team
Depending on your needs and goals, you’ll have a number of roles you need to fill:
Core Team (AKA Lead Syndicators)
This section of your team is all about the big vision and decisions. They are the people you turn to first, talk over new ideas with, set goals with, and strive toward a shared overall vision. While it’s likely that other members of your team in other sections will know your vision, they won’t be the gas in the tank – they’ll be the parts in the engine that help it function.
- The Prospector – this person takes the role of the salesperson in your business. They go after what they want and don’t take “no” for an answer if it can help make everyone money. They will do what it takes to get a deal. These personality types are usually extroverted, people-focused, tenacious, and hungry.
- The Brains – this is the person who can take the prospector’s finds and excitement and turn it into something tangible. They’ll screen any potential deals and ensure it not only lives up to the excitement but will actually perform in real-world terms. These personalities can be extroverted or introverted but are often more risk-averse than a prospector.
- The Connector – this is the person who knows how to make the right connections and find people ready to invest. They’re usually extroverted and have good “sales” skills, in that they know how to match the energy of their prospects and build a good rapport.
- The Budgetor – this person manages the value-add and ensures that all projects move forward on-budget. They know how to see the big picture but are also interested in managing the details. They know how to slow down and ensure that everything will be done on-budget and well, not just as quickly as possible.
Of course, for new syndicators, members of their team may have multiple roles. Your core team may simply be you and one other partner, and you fulfill two or three core roles. For example, you may be the connector and prospector, while your partner is the brains and budgetor.
Regardless of how many roles you fulfill, be conscious that they are different roles, and that you’ll likely want (and need) to find individuals to fulfill roles that aren’t in your zone of genius in the future. So, even though you are doing the bulk of the work now, keep in mind that you are fulfilling multiple roles. Keep an eye out for someone who could better fill one of the roles you or your partner are temporarily filling.
How to Find the Right Partnerships
Choosing the right partnerships can make you a ton of money and make your syndication journey enjoyable, or lead to endless headaches and lost money. You need to approach any business partnership with as much caution as you would a new romantic relationship. You are unlikely to decide to move in together or get married after the first date, and if you do, the likelihood of things falling apart is high.
You need to have the same values, you need to like each other (being paired up with someone who constantly grinds your nerves makes for great stories in movies and books, but less so in real life), and you need to deal with conflict in a way that complements each other. This doesn’t mean that you look for team members that are like you, but rather where your weaknesses are their strengths and vice versa, but with a shared vision and values.
Since this is such a huge topic, your best next step is to watch or listen to our interview with Anna Kelley from reimom.com, who owns over $16M in units.
Build a Winning Team!
Resources to help you build your best investment team and accomplish far more than you could alone
Now that you know exactly how to find your key partnerships, let’s look at your extended team members.
- Commercial real estate broker/agent(s) – developing rapport and good relationships with multiple brokers will pay dividends in the long run. They’ll help connect you with the right people and keep you in mind when new properties are likely to become available either on the market or as an off-market opportunity. Getting in with up-and-coming brokers will help in the long run, but focus on nurturing relationships with brokers who have already helped buy and sell more than a handful of multifamily units.
- Marketing team – this will likely be a one-person role when you start, but you can quickly expand with additional team members, agencies, and freelancers, depending on what marketing avenues you choose to use to reach investors. Some examples may be:
- Web design & development (we’ll fulfill this role for you)
- Professional property photographer (don’t just use your iPhone – professional property photographers can really show the value of a property in your marketing materials)
- Copywriter/VA to manage emails and marketing materials for investors, publishing your blog posts, arranging for you to be on podcasts, etc.
- Mortgage/loan broker – find the right one, and it can feel like they have a magic wand. They’ll help you find the best funding to keep you profitable.
- Title agent/company – in some states, a title company is necessary to open escrow, handle the transaction, and insure closing. They’ll also ensure there aren’t any outstanding mortgages, judgments, unpaid taxes, or liens on the property that may cause you headaches in the future.
- Insurance broker/agent – insurance is an essential piece of the puzzle, and so a good insurance agent will make certain you buy insurance that covers you in all eventualities and get you a good deal.
- Attorney – work with an attorney who knows the business. Ideally, they specialize in multifamily syndication, but they should at the very least know how the business works. Don’t wait to find an attorney until you’ve got a deal in the pipeline, either. Their knowledge can help guide you to ensure you are protected and prevent costly problems in the future.
- Private money partners/investors – self-explanatory, without money, you won’t be going anywhere! Start developing relationships and try to find investors you click with since those investors will stick with you for the long haul.
- Accountant – Choose an accountant that has worked with real estate businesses before, or at the very least, understands how your business works. Choose someone you like and trust as they’ll be key in communicating value to your investors, helping you save money on taxes, and ensure everything is done by the book.
- Bookkeeper – you don’t have to have a bookkeeper, but if you’re doing many deals or adding value to your properties, it will be well worth the expense to have someone keeping track of all your income and expenses.
- Contractor(s), property services & construction manager(s): find punctual, skilled, and reliable contractors and build a good relationship with them. As you’ve likely experienced either as a syndicator or homeowner, contractors are often unreliable, even if their work is good. A bad one can set your entire schedule back days or weeks. Look for:
- General contractors
- Flooring companies
- Pest control
Make sure your property manager(s) have their numbers and use these trusted partners when possible.
- Property Inspector – Hidden problems mean sunk costs, so find a property inspector with an eye for detail.
- Property managers or management company – a great property manager or company can help give you, your investors and your lenders confidence.
7 Things You Must Know to Build a Strong Multifamily Syndication Team
- Partnering with Experience Will Make Your Life Easier
It’s not unusual to find another new syndicator who is just as enthusiastic as you and desires to partner together. And that’s great, but this really is a business where experience matters. When you first partner with someone, try to find someone who already has connections and resources they can use to make your initial deals a success. Finding a coach or mentor can also be a good avenue to success.
- Choose a First-Class Attorney
Your legal counsel matters. They need to guide you around legal compliance and ensure everything is set up so you are in a strong position. Don’t wait to find someone who knows what they’re doing until you’re already up and running – you can get them involved from the formation of your LLC. Find an expert in this area.
- Ask for Referrals
Successful multifamily syndication relies largely on the strengths of your network. Strong relationships will help you find great properties and fund deals. You can also reach out to friends and peers for recommendations for contractors, property managers, and other services you can use for your business. Even a recommendation from a friend for a great general contractor they had work on a kitchen remodel may be the next best person to add to your arsenal.
- Don’t Hire Mini-Mes
This is a problem many new syndicators and business people make when they’re first growing teams. Even if you’ve managed other businesses, this is still something to be aware of: don’t hire mini-mes. We often look for people just like us, people with the same goals, values, and ambitions. The problem is, when we hire or partner with people who are too similar to ourselves, we leave ourselves open to weaknesses. Try to build a team that is well-balanced in skillsets and personality traits.
- Clearly Define the Roles of the Core Team
Whether your syndication is a two-person partnership or more than four, make sure you clearly define your roles. Allow people to lead the areas they excel in, work on their passions, and allow people to speak up if they don’t feel they are right for a certain role. Get this down on paper before you move forward with any partnership because if there are issues assigning roles, there will be issues later down the line, too.
- Be Clear About Your Financial Roles
The goal here, as in any business, is to make money. So be clear about how you will each contribute financially to the business, as well as how you’ll take your profit. Ensure that everyone is upfront about what kind of liquidity they have so you don’t reach the point of finding a lender only to find you aren’t actually in a good position to move forward.
- Make Sure Your Team Has Aligned Values, Goals and Expectations
Didn’t we say don’t pick people like you? Well, yes, but there’s a difference between wanting to all have the same role as you and wanting to see your business or partnership succeed. If you don’t have the same values, there will be inherent conflict, and the road to success will be rocky. Make sure you and any other syndicators you partner with have the same values, goals for this deal or venture, and the same expectations.
This should include expectations for management of your partnership or business, as well as monetary expectations. For example, if you aren’t aware that one of you wants to go all-in and make this a full-time career, while the other wants a business that fits around their lifestyle, there may be some issues. This can work, but you need to be clear about what you each want and expect before entering into business together.
The right team is essential to success, and there are pitfalls even experienced business people can’t see. It’s also easy to find yourself falling into managing dozens of contractors, so make sure you do your research and find people who can work without hand-holding
Build a Winning Team!
Resources to help you build your best investment team and accomplish far more than you could alone
Where Do You Fit In?
Which part do you handle at the genius level? That’s the key – figuring out what part of this you can do at a very high level. Then surround yourself with others who can do their part also at genius level.
We like to think that you’ll consider us at Apartment Investor Pro as an extension of your team. We do multifamily websites at the genius level. Our business focus is about supporting multifamily real estate investors like you as you work towards the fulfillment of your investing goals.
To learn more about how our team can complement yours, visit Apartment Investor Pro.