Step 2: Create Your Dream Team

Welcome everyone back to our show. This is James Nelson, your host of Real Estate Investing live from New York. I'm here with Rachel Hartman, who is my writing partner. We are working on an incredible book which is going to give you the inside edge to real estate investing. And if you have not already heard our lead up to this, we've already given you an introduction on why you should think about investing in real estate. And we talk about all the advantages, all the reasons why you can have the competitive advantage in this space. And then our episode on what to buy. And look, these are steps and you might be thinking they are sequential one by one, but a lot of these steps also overlap. So we are going to be talking today about creating the dream team. And so Rachel, welcome back. Thank you so much. These conversations have been a lot of fun and I am looking forward to to our conversation today.

I am as well. It's a great topic. I think for today we're going to be looking at how you build that team when that takes place. As you mentioned, James, there's different steps, some of which we've covered, which are really exciting. But I think it's important to keep in mind there's this whole picture at play. So we have different components we need to think about and have to realize where we put them in. I know just from talking to you and listening to your podcast, I feel like you know just about everybody in New York City and beyond. So you obviously have built an incredible network through your own experience. I think you have a very unique approach to how you do that too, which I've been impressed with. So I'm super excited to be able to go over some of these points with you and hear your thoughts on how we should go about putting together a team. I guess the first question I had is actually, when does it become a team? We've talked about making that first investment. We've talked about the advantages of going into a multifamily property, getting that start getting that experience. When does it shift from this is me to this is me and others.

So, Rachel, I love your lead up. And the first piece about this business is all about relationships. And if you want to be successful, you need the right relationships, right? And that is what's going to give you the edge. And so if you listen to the first podcast that I ever did with Bruce Ratner, he used the word people OR team over 50 times in an hour long interview. Think about that. You know, that's over one a minute. And look, I mean, Bruce, is this larger than Life developer. He's built over 50 projects across the New York skyline. The Barclays arena, he owned the Nets. I mean, what has Bruce not accomplished? And yet his story was about building the team and the right people. And your knowing the right people and who to go to is really going to help you be successful, because this is not a business where you can do this on your own. So, you know, but. But your first question is really important because, you know, you might say, well, you know, James and Rachel, that's great. I'm interested. I want to buy. But I'm not ready to start reaching out to people because, you know, I got to still find the opportunity. I got to figure out what I'm doing. And, you know, there's some truth to that, right? I mean, we're not suggesting that you go and retain an attorney and start billing hours and. And you haven't even figured out what you want to do yet, Right? But I do think it's really important to start building relationships, right? And this has been a little difficult, especially after Covid, where, you know, for a long time, there weren't any of these industry events. But, you know, back in, you know, the peak days in, you know, 2018, 2019, I was going to, you know, a half a dozen of these events a week, right? And so where's the information that I pick up and learn about the market and what's going on? I mean, yes, I read a lot of publications. Yes, I listen to podcasts. Yes, I read books. Yes, I can read. But where I really picked up a lot of the inside information, if you will, were meeting people, whether it's a breakfast panel and say, hey, what are you working on? What's going. Okay, so what's. What's, you know, what kind of rents are you achieving? What's your business plan? You know, where are the opportunities? Meeting with attorneys? Hey, what are you working on? Who are some of your active clients? Can we. Can I be helpful? Can we help find some opportunities? How can we work together? You know, even the accountants, you know, hey, what are your. What's keeping you up at night? How are you advising your clients?

Right?

And not that I give accounting advice or legal advice.

Right.

But at least having an understanding of what the opportunities are in the market and then being able to connect with the right people is really important. So I think, you know, building your network, right? And your network should be real estate professionals who transact in your market, right? So if you're, you know, if you're subscribing to, you Know, in our last show we talked about start with your own backyard, right? So if you're looking, Rachel, to invest in Miami, you know, you probably, you need to know attorneys who transact in Miami. And by the way, there's also a difference between, you know, a residential attorney who maybe you bought your apartment or house with, and a commercial attorney. And so, you know, getting to meet some of these people and start having conversations and bouncing ideas off can be hugely helpful. So, you know, I did want to give an example if we have time, because I think it'd be helpful for our listeners to kind of grasp this concept. But, you know, I think once after you study the market, hopefully you have a thesis and you have a business plan that you would like to execute on. So let me throw out an idea for our listeners and I, you know, I actually think it's a pretty good business plan. And I haven't heard a lot of people, you know, take this on. But, you know, look, there's no question that after the pandemic, the workplace environments change hybrid seems to be the opportunity. You know, the way most of these businesses are conducting, there's a lot of workers now who are entirely working from home, right? So to me, okay, if you're working from home all the time, wouldn't you need extra space for an office? You know, what about live work condos, live work apartments where you have your apartment but you also have your office. I'll take that one step further. What if you're a maker? What if you actually have products that you design and you sell on Instagram and you need micro fulfillment? So maybe your apartment, it's not just a home office, but it's also a studio where you're actually manufacturing things and you're shipping, right? Okay, so, okay, let's say this is a segment of the market that no one's really tackled yet. Okay, so you've got this idea, you know, and you're going to have to do research to make sure that there's truly demand for this. But then you're going to say, well, how am I going to pull this off? Okay, so you need to make sure, first of all is, you know, do you have the right zoning for this? So can you take this commercial aspect and you can you put it in a, in a residential zoning or building? Right, that would be a land use attorney, right? You want to condo the building and sell off individual apartments. That's a condo attorney, right? You're going to want to have those opinions. And so I think having, you know, Council representative, you know, contacts to bounce these ideas and say, hey, what do you think about this? You know, what are some of the obstacles? What do I want to think about doing? I think you'd be surprised how many of these professionals will, you know, and I'm not saying they'll give you hours upon hours, but for an introductory conversation, most of the attorneys would say, look, I'm happy to have an introductory call, which is, you know, basically free advice.

Right.

With the expectation, hey, if you like what you hear and there's an opportunity, let's work together. So again, this is a really long way of explaining, but I wanted to drill the point home that, you know, you're expanding your network is important from day one, and also use that network to really bounce ideas off. And so then you also have the team ready to strike when you have that live opportunity.

That's great. I did actually listen to that first podcast with Bruce, which was excellent. And I was so taken aback while you said his references to people and then how he actually came across as such a human and personable person as well. I kind of. I couldn't believe I was listening to this huge figure talk the way he was. He was so practical and, and seemed reachable. So I guess I think that's one thing I took away from the podcast is that building up that extensive network just starts with one person. And you don't necessarily need all sorts of certifications and licenses and status to. To get started. But. But I like your idea, you know, so you have this business plan, and the COVID one is great. You want to start building up a team. Talk to me about some of those main players. You should keep in mind when you're building up your team, and then what they'll be contributing.

Perfect. So I might be a little biased, but I think your most important team member, if you're an investor, is a broker.

Right.

They are the ones who are certainly going to be sourcing a lot of the opportunities. And I know we've talked offline and I could certainly discuss more for our listeners in a further show about on market versus off market. But in most cases, brokers, the ones who are sourcing opportunities. So that alone is a good reason to get to know a broker, to start seeing opportunities. Okay, but a good broker should also be giving you market intel. Right, but there's different types of brokers, just like there's different types of attorneys. You have a sales broker, an investment sales broker. That's what I do for a living. Right, but then you have Leasing brokers.

Okay.

And there's different types of leasing brokers as well. You can have an office leasing broker, you can have a retail leasing broker.

Right.

You can have an industrial leasing broker. Those are very, you know, again, you have to get very specific to the type of asset class. And when you're dealing with that broker, make sure that they have experience in that space. Okay. So that's on the commercial side.

Okay.

If you are buying an apartment building, you're going to be likely speaking to an investment sale broker. But then you're going to also want to know, okay, well what can I rent these apartments for? And let's take that one step further. Okay. I've got these really large oversized one bedrooms. Is that the market? Who's my tenant base? Should maybe, should I put a wall up and should we turn these one bedrooms into two bedrooms? Am I looking for students to rent this? Am I looking for young professionals? Am I looking for families? That would be a question to ask for a residential broker.

Right?

Residential brokers. You could have rental apartment brokers. You could have condo apartment sale brokers, townhouse brokers. So again, make sure, if you're getting advice from a residential broker on renting apartments, make sure that rental that that broker you're speaking to has done similar projects.

Right?

Okay, so that, that covers the brokerage sphere. Okay. We've already talked a little bit about attorneys and the different types of attorneys, but let me just spell it out for you again. So you have transactional real estate attorneys. Those are the ones who are doing your purchase and sale contracts when you want to buy, when you want to sell. They likely also work with the bank when you are negotiating your loan docs. So but then you also have land use council. So if you're thinking, you want to make sure can you do a project, is the property as of right. Do you need any changes? Do you, you know, and some, you know, New York City, pretty much everything's as of right. But sometimes you go into the suburbs and nothing's as bright. You have to go and you have to get approval. So there, your first stop is probably land use council to figure out what you can do or can't do. There's landlord tenant attorneys. Okay. Those are, you know, those are the attorneys that, you know. They're going to help you do the diligence up front to make sure you understand. Okay, what do these leases look like in New York or an environment that has regulation they need to see. Okay, let's, let's look at what you have Here the owner is saying, these are fair market apartments. Are they fair market or should they be regulated? What kind of exposure is there? And then once you own the property, if you have a tenant who holds over, you need an attorney to actually evict that tenant, that it would be a landlord tenant attorney. Okay. So there's also tax attorneys if you want to challenge your tax bills. So plenty of attorneys out there as well. Plenty of brokers, plenty of attorneys. And then you have your accountant, right. Which is the way you, you structure the transaction, how you file, making sure you maximize. We talked about a lot of tax benefits in that first episode of why Real Estate. So you're going to want to make sure that you're working with an accountant that has dealt with other professional real estate investors.

Right.

So that's, that's important. If you're really looking to build a real estate portfolio, you need to make sure and deal with professionals who have experience dealing with real estate investors. Okay, so then we've got. If you're looking to do a project where you need to do renovations, you're going to need an architect who can help draw plans. You're going to need a general contractor who's actually going to do the work if it's a large enough project. Sometimes you'll also bring on an owner's rep, that's someone who's actually your representative. You might say, hey, I don't know about construction and I need someone looking out for me. Now for a small apartment renovation that might not make a lot of sense, but for a larger building wide renovation, yeah, you might need someone overseeing the project on your behalf. So Rachel, I might have forgotten a couple of people and certainly there are pieces that are vital to the transaction. A title agent, that's the person who actually researches the title of the property, makes sure that you are buying free and clear title. They provide insurance, there's, oh, mortgage brokers, very important are out there to help you arrange financing.

Right.

They're going to put out multiple options for you. So off the top of my head, I think you've got your team there who can help you transact. But if I've forgotten anyone, you can let me know. And I also have a place to check because I'm actually part of an organization that I helped co found called risa. RISA is the Real Estate Services Alliance. And if you go back to some of the earlier episodes, I had some of my, my friends from the group come in. But our organization handles every aspect of the real estate business. So I'M actually looking at our page right now@risamyc.com and I'm seeing, you know, these are our categories of members. We have brokers, we have lending, so you know, the mortgage broker and the bank. We have legal, we have the transactional management. That's, that's the one that I forgot. Okay, so third party manager.

Okay.

And I think we talked a little bit initially about, you know, why real estate, how to approach this. It's hands on. Even if you have a third party manager who's collecting rent, paying your bills, your job is the asset manager. Because you're watching the overall situation, making sure everything takes place correctly. But that I think now I feel like I've given our listeners plenty of people to think about.

Yeah, it is a comprehensive list, but I think it's worth going over because I think it emphasizes the important role that people play in this. So like you said, it's a relationship game. You're going to have people involved. That's almost something that you're building in as you carry out these investments. So I'm curious, you know, now that we've gone over this listing, what are what you would consider some best practices as you're building a team? For example, you know, how do we vet people we're bringing in on our team? You mentioned some things like research. I'm curious if you have referrals, places you can go, what are best practices for bringing on the best team?

Rachel, it's a great question. And the good news is that once you really have a couple, good contacts, you know, if you have a good real estate broker or a good attorney who's really plugged in, they will help make introductions.

Right.

So that's, that's super helpful.

Right?

Because if someone was looking to invest in New York and they needed some recommendations for any of these components, I could certainly make some, make some recommendations. The other thing is, look, we've talked about, for your first deal, you're likely going to be partnering with someone. Your value is you're going to be finding the opportunity, but you're likely going to be partnering with someone trusted someone who you've known, someone who's done this before. You know, likely they're going to have their own relationships as well, which really helps because especially, you know, sometimes you don't really know how you work with someone until you've been through a transaction. And, you know, not that anything's perfect, but, you know, and also I have a lot of clients who have multiple attorneys and it depends, you know, Maybe for a smaller deal or a certain type of seller, you want a certain type of attorney. And sometimes it's good when you kind of match things up. I mean, if you have, you know, if you're buying a large institutional size, you know, property and the seller is using a big name law firm, you might need to bring in, you know, the same type of team to kind of matt, you know, match and make sure that you can move things along. And if it's a solo practice, counsel on the seller's side and want to make for an easier transaction, you might match it up with a smaller practice. So again, that goes back to my earlier point that it's good to have meet people, have multiple connections, but I think also having friends in the business who can make referrals. And that's certainly, for me as a broker, you know, the best, you know, business. When I have someone who calls me up and says, james, you know, I just spoke to, you know, Mr. So and so, you just sold a property for, and it's time for our family to sell our property. You know, we'd love for you to take a look at it.

Or.

I get a lot of referrals from attorneys. And when I get that referral, it's, first of all, I take those referrals very seriously because that is that that person has taken, you know, they're putting their name on the line by referring me, so I better deliver and I better go out of my way to make sure that their client is taken care of. So again, that goes back to. There's a lot of referrals in this business too.

Definitely. That's a good point. You know, one question I wanted to ask, and you can, you know, use your experience or others. I'm curious how teams can fluctuate over time. You know, is it uncommon to see some, you know, you start out with an attorney, 30 years later, you tend to see the person with the same attorney. Maybe not necessarily. And I know life happens. I'm just curious if you can talk a little bit about those fluctuations, because obviously we're talking, you know, if we say create your dream team, what exactly are we saying is that something that waxes and wanes, varies by project, will last for the next four decades? Break that down a little bit for us if you could.

Great question. I think in a perfect world, if you can do repeat business with the same team, it saves a ton of time because there's a learning curve with how you work. I mean, a mortgage broker is the best example. I mean, you Go. And whether you're getting acquisition finance, you're refinancing. I mean, I don't know if you've gone for a loan lately, but, you know, I just did one and, you know, I felt like the bank was asking for everything, including my fourth grade report card, you know, when. And a note from my mother saying it was okay for me to borrow. But, you know, in all seriousness, that mortgage broker assisting me knows, you know, has my, you know, my, my financial records, has that information where it's ready, it's prepared in the right way. And so it makes a lot of sense to do repeat business.

Right.

And especially, you know, with, with lenders. And Jeff Ravitz, who I had on my, my show, and we were actually texting back and forth about a large multifamily project that he's bidding on today, said that he, he really, you know, when you talk about relationships, lenders are really important. And even if you're using that mortgage broker to help you negotiate the terms, having that go to lender who knows you as a borrower and has comfort, because the first piece of business, that's the toughest one.

Right.

You got to get them all, you know, you got to get them comfortable with you help to understand how you're going to work. But once you've had a success story where, okay, great, you know that this investor bought the deal, they did what they said, they delivered, the bank got paid off. Great, let's go do it again.

Right.

And so, you know, that's really how you want to see things happen is, you know, these repeat transactions. So, and if you, you listen to one of my more recent podcasts with Robert Rovani, he talks about trading up and he's, he's buying, improving, selling, buying, improving, selling. And so having that team that can do volume and just keep cranking, really important. That being said. Sure. You know, over time, if you start doing different types of transactions and, you know, maybe you've got an attorney who's really good at vetting multifamily properties and negotiating those deals, but you start getting into retail, and you need an attorney who's really good at negotiating, you know, retail leases and purchases. You know, sometimes you'll need to bring new people into the fold if specialty. Specialty is required.

Exactly. That makes sense. So we've talked about different aspects, different people on the team, how that might change over time, how to find them. What about, what do you say when someone comes up to you, you know, so we're looking at getting started. Someone who's getting started in this investment space. They know they need to build a team and they say, who should be my first player? Who should be my first edition? Do you usually answer that? That depends. Or, you know, when we talk about prioritizing and getting started. What are some of your recommendations?

Again, I've got to go with the broker. First of all, Rachel, one thing is you can talk to me as long as you want, and I'll never send you a bill for how many hours. Right. Once you have that free conversation with the attorney, you're going to start, they're going to ask you for that retainer letter and you're going to start getting billed by the hour. So then you start choosing your words very carefully. But, yeah, no, in all seriousness, I mean, brokers are, you know, a lot of them are generalists in that because their job is to bring seller and buyer together. Yes. They need to find the opportunity, they need to be able to present it. They need to bring things together. But we also have to be in the business of solving problems. So if I have a property where I know there's a tenancy issue or there's a zoning problem, if I'm doing my job and I'm a good broker, I am helping identify that situation up front. And then I'm going to help you figure out a solution.

Right?

Or at least who you can talk to and say, rachel, okay, here's the situation. We're selling this building. It's a great opportunity. It's priced well below the comparables. But there's this one problem. There's a tenant who's holding over, and, you know, we're going to sell it as is. So you're going to have to handle this. Right. So, you know, but don't worry. We've done a little research. This is what we would advise. And by the way, we've got a landlord, tenant attorney who already knows the situation. They've got a plan on how you could address this. Why don't you talk to this landlord, tenant attorney and they can help you figure this out.

Right?

So, you know, not only can that broker, again, start telling you, you know, what they're seeing out there.

Right.

But they can start connecting the dots and making introductions. It's interesting, but I think I rarely. Well, occasionally I get asked this, but I'll get asked. James, you see a lot of opportunities out there. What would you be buying in this market? You know what, what do you think is interesting? What business plans do you like?

Right?

And you know, look, I think that's Another idea is maybe talking to enough brokers out there, you can get some good ideas on some business plans that you can, you can try to implement.

Yeah, that's so true. I personally was thinking broker, but wanted to have you confirm since you're much more of the expert in this space than me. So we touched a little bit on this. But I'm curious, from educational standpoint, learning the business, what are costs that come with it? Maybe we don't want to say cost, but just what do you need to keep in mind? Obviously we're talking about making investments to get great returns, getting that project, you need a team to do it. You can sometimes have free consultations, there's networking, but obviously there comes a point where there are fees involved. Talk a little bit about what we should know about that, how that's handled.

Right. So and as I said earlier, you know, brokers are success based, right? So you know, a seller pays a broker commission when they sell or you know, sometimes if a buyer, if a buyer's broker, they'll get paid by the buyer on sale. But you know, occasionally, you know, in that landlord tenant situation, if there's, you know, some kind of, you know, negotiation or buyout, I mean, maybe on rare occasions that's on a success basis, but for most part they're hourly and they should give you an estimate of what that's going to look like. An architect, for example, will probably charge you on a certain percentage of the hard costs of the project. Managing agents are going to charge you a couple percentage points depending on the size of the property and type of property. Could be 2%, it could be 6% of the annual rent. And so, you know, mortgage brokers are also paid on a success basis when the loan closes, a percentage of the lease. So that's really kind of the breakdown between the success based salespeople, if you will, and the professionals who are paid hourly. But one overarching comment I would like to make is that, you know, the old adage, you get what you pay for. Sometimes people think, okay, well, hey, you know, I don't want to, you know, pay for the best professional in this space because, and let's maybe talk about, we'll pick on attorneys, maybe this person's hourly fee is double someone else's. Well, look, if you talk about land use council, for example, if you get the, one of the best land use attorneys, they, they may be able to pull something off that no one else would or they might see a loophole and opportunity. And when you're looking at the grand scheme of, let's say you're doing a development project for 40, 50 that could become 100,000ft. Sure, you're going to pay more fees and a higher hourly rate, but if they can unlock more value, or think of it another way, if they have a lot of experience in this great track record, yes, they might charge a higher hourly, but it might take them a lot less time to do it because they already know how to get there.

Right?

They already have. They can expedite it. They can get it to the top of the stack. So don't always choose your best professional by who will give you the cheapest rate. And I get this every time I meet with clients about selling their property because all fees are negotiable. And they'll say, james, I see your proposal, but your fee is higher than some of the other brokers that we've spoken to. I said, okay, well, let's talk about that. What has that broker told you they're going to do? What's their marketing plan? Are they, did they put together a comprehensive broker's opinion of value like I have? Do they have a comprehensive marketing strategy? No, but they said they had a couple, you know, buyers who were interested. I said, okay, so are you paying this broker to make a couple of phone calls or are you actually, you know, paying for someone to run a full marketing process? Right. And, you know, the question then is, okay, well, if my fee's a little more expensive, do you think, you know, at the end of the day you're selling, you're interested in if you're going to net more money?

Right.

So even if my commission's a little bit higher, don't you think we're going to get a higher price and you'll net more money? So that's the way you need to think about fees is really a return on investment.

Right.

And are you with, you know, the best professionals for what you're doing? And I'm not talking about overkill. If you're doing a small project, you don't need to bring in the best land use, you know, attorney in the city.

Right.

Maybe they have someone at their office who's a junior who charges at a lower hourly rate. Or look, maybe the local, you know, a smaller solo practice. Land use attorneys. Fine, if they can show you. Okay. I've done 10 of these in the last year. I know how to do this.

Right.

So it's just, it's getting the right professional for the job.

Exactly. I completely agree. And you know, that point actually feeds into some of these other things we've discussed about and you've talked about in other podcasts where you're looking. How can we add value? So if some of those fees play into that value component, I think that's a really good factor that you said, something to definitely consider. And then also, you know, you get what you pay for. So if there's something that they're, like you said, they're charging more, but you're getting a lot more, there's definitely value to that, too. So one of the last things I want to go over, I have to ask anything you would say about red flags when building a team, I'm not necessarily referring to horror stories, but just almost things that we should be aware of. I think so much of newcomers. We're just getting started. There's so many options in addition to meeting people. I can just go online and find, find literally lists and lists and lists of people to connect with. So anything you would say just kind of to be aware of as you're going out and building up that network.

Rachel, another fantastic question, because the professionals you retain are a reflection of yourself, right? So if you're new to investing and your reputation is everything and you might say, oh, James, New York City is a huge city. No one's ever going to find out if I, you know, if I cut corners or if I make an offer and I don't deliver on it or I retrade at the table or no, I mean, do the right thing, you know, be known as, you know, you don't cut corners and you do things by the book.

Right.

First of all, because it's the right thing to do. But so in the same way, you want to make sure that you're dealing with professionals that deal with integrity. And, you know, look, maybe I'm stating the obvious here, but yeah, I mean, look, there are professionals out there and actually they're not professionals. They're the ones who are trying to, you know, cut corners or do things that are, you know, not by the book and it's not worth it. I mean, why, again, you know, this is not a get rich overnight. I mean, our listeners are hopefully going to be, you know, building a real estate portfolio over time and you want it to be done in the right way where people say, hey, you are a pleasure to do business with. You know, if you buy a property and you have a seller who will be a reference who will say, you know, next time you try to buy a property, you say, hey, you know, Mrs. Jones, you know, call Mr. Carter over here. I just bought a property from him. He'll, he'll, you know, if you have any questions on how I perform as a buyer, why don't you speak to him?

Right.

And so you want to be known as, you know, you, Rachel, you were a pleasure to work with. You know, do what you say, say what you do. You know, your professionals were attentive, they were on top of things, you know, that's what you want. So you know, that's where really the references come in strong because you know, people who don't do right, you know, that's really, really short sighted. So I think that's really, really important.

Yeah, I agree. Just a quick follow up on that. You know, when we say, when we talk about reputation, how important is reputation in this real estate game? I don't know if there's certain practices you maybe mentioned a couple here, but certain things you've done over your years that you have found have really helped you or you've seen others do. I'm just curious on how you go about building your reputation.

Yeah, I think I always try to put myself in my clients shoes. Right. So as our listeners are reaching out to professionals, you know, it's pretty easy to tell when that professional, when that person is just trying to, you know, make a sale, so to speak.

Right.

So you know, I speak to owners, I advise them, you know, James, you know, we're thinking of selling. What do you think is now the right time? If it's not the right time or they need to do something with the property first, I tell them to wait. And that might sound crazy because there's, you know, I'm sure you know plenty, plenty of brokers who are just looking to make a quick sale where, hey, I hear someone wants to sell. Great, let's, let's do it. But again, you really have to work with people who take that long view and really put themselves in your shoes and say, you know, I want to make sure that this is the right thing for you and I'm going to look out for you. So I think that's really important when choosing the professionals you work with. The other thing that you mentioned about, and I didn't want to forget this point, is when dealing with someone's reputation, okay, that doesn't mean that everything always goes right. Okay. Real estate is a business where, you know, things happen, Right. That are sometimes beyond your control. You know, unfortunately I, you know, I had a lot of clients where they bought 2007, 2008 and then Lehman collapsed, financial markets collapsed. I mean, there was really tough times, right? It didn't matter. You could have been the greatest investor, you know, full of integrity. 0708. The market changes, there's nothing you can do. So it doesn't, you know, for, you know, for your reputation to remain intact, it doesn't mean that you haven't had failures along the way.

Right.

But it's, it's doing the right thing.

Right?

And when I, when I speak, especially when we talk about financial partners, banks, mortgage brokers, they want to know, how did you act not just when things were good, but when things were bad. Were you litigious just for the sake of being litigious? Were you reasonable? Were you able to work with, did you do the right thing? That's really important as well. I didn't want to miss that point as well.

No, that's excellent. Actually, I was going to ask. I think we might be entering a period. Generally speaking, there's maybe a sense of optimism, as people say. I went to my first in person event in two years. Some Covid restrictions are going away or being reduced, which I think creates a general sense of optimism. But I think that we don't want to look at that and not cover the fact that crises do happen occasionally. We just went through the pandemic. You referred to the earlier 0708 crisis. I don't know if you saw teams behave differently during those past crises. For example, strong teams that plowed through got through really well because of a good reputation. So I guess my question is based on, as we look for the future, even if there's a sense of optimism, you always want to be prepared for anything, really.

Yeah, I love that point and I'm a big fan of James Clear and atomic habits and having the right habits and look, I mean, even for my personal business, our team's business in 2020, I mean, that was a devastating year. I mean, it was for everybody. I mean, few exceptions. I mean, business was really tough. And the question is, do you continue to do the same things, right. Even when the payoff is no longer there? And at some points we didn't even know what the future was going to hold.

Right?

But you continue to do the same actions, right? You keep showing up, you keep reaching out because you just, you keep open. You never know when these opportunities are going to happen. And I find that, you know, in tough markets, you know, those down markets, that's what really separates, you know, the, the winners in the market and those who are willing to dig deep and you know, they're tough times and lean times, but if you put in that time, you're going to come out of it so much stronger. But it's keeping those same. You can't just in up markets, build, build, build, grow. And then when things get difficult, completely just say, all right, let's just sit and hang out here on the sidelines. I mean, you really have to keep showing up. So I think that's an important point. So, Rachel, one other thing that I wanted to bring up because it's really, I think, important for building your network. I want to talk about networking as a practice and what it really means. And I've got a good friend, Jeff Michelle, who wrote a book on the topic. One phone call away. And it's. Many people think of networking is showing up to an event with a stack of business cards and just handing them out. And you're just looking to advance your own business, right? You're just looking to make that quick sale, that quick introduction, right? Jeff has a very different take on this. And I haven't seen the movie, but I know the premise of pay it forward, right? So think about as you make connections out there, not what you can get out of that connection, but what you can give, right? So as you're building your network, okay, And I think this is really important. You're not just, you know, meeting these attorneys, these brokers and saying, hey, what's in it for me? What do you got for me?

Right?

It's. It's thinking about, hey, you know, I heard about this trend. What do you think about this? Maybe this is something that you want to look into for your business or, you know, maybe for a broker. It's, you know, hey, I really appreciate you're keeping an eye out for me. You know, I've been looking at some opportunities. I actually found this owner directly who wants to sell. Turns out it's not a property that I want to buy, but I'd be happy to introduce you. Right? It's just making it a two way street and I think that's. That's really important also as you think about building your team is it's not just about building the team. So you. Turns out it's not a property that I want to buy, but I'd be happy to introduce you. Right? It's just making it a two way street. And I think that's. That's really important also as you think about building your team is it's not just about building the team so you can be up on a Pedestal and, you know, succeed. It's like, no, everyone on the team needs to succeed. And, you know, a lot of my incredible clients, you know, we've done a lot of business together, but I'm also very grateful to them is that they've made a lot of introductions for me as well. So I really want to make the point that there's a two way street here and to consider that as our listeners are going out there and making their.

Yeah, I completely agree. It's a great point. I feel like just from knowing you and getting to work with you a little bit, James, you actually, you walk that walk. I've seen you pay it forward and look for ways to give. So I think you set a great example actually of that, of building the network in that way. I think to close, I'm curious if you have an example or a podcast we could listen to that really speaks to some of these aspects we've talked about. So making that dream team, getting started, getting that reputation going. Any thoughts you have there?

Yeah, I really believe that. And I'm almost trying to think of the exception. But every single investor, if you listen to any of these podcasts, they all attribute their team and any of them who've grown their business, right. They all had to build a network around it. So, you know, I'm thinking about, you know, Stephen Kashanian from Closed With a kid. You know, he, you know, he's built out an incredible team and we've talked a lot about team, meaning your outside, you know, professionals.

Right.

But let's talk about internal too.

Right?

You know, one of the biggest, one of the most important parts of real estate success is the initial investment. Some people said, you know, there's only one thing that you can never change about a real estate deal, and that's what you paid.

Right.

There can be a lot of outcomes that have changed, can change after you bought it and how you improve it, the market conditions this and that. But finding that opportunity is really important. And Steven has built a machine. He's got great people who are out there. Also, another recent interview that I did, David Shorenstein from Hildreth Advisors, I actually entitled the episode Sourcing because he is a master at finding opportunities and he built out a team. He had a whole. He would hire interns who would come in and write handwritten letters to owners saying, are you interested in selling your property? Save a brokerage fee, Call me direct and. But so again, if it was just David sitting there in his office writing letters, he wouldn't make it Very far. But, you know, he's also built a great team. Myself personally, also, there's no way that I could even do, you know, a tenth of the, of the, the sales that we do if I didn't have an incredible team. I have a director of operations, we have dedicated analysts, we've got marketing, and then we have sales who are specialists in each of their asset classes.

Right.

And for me, that's, that's a big part of the fun.

Right.

And it's certainly what I'm most proud of in my career. It's not just personal success as a broker, but really the team and the culture that we built.

So true. It's absolutely essential, like you said. Well, thanks so much for going over these points with us, James. I really appreciate it. I look forward to the next things we talk about, which will lean toward finding the gems.

Awesome. Rachel. This has been so much fun. We're making incredible progress here. I know we've been hard at work. We're trading drafts back and forth. I know we got a really tight deadline to get this book going, which on one hand, yes, we're putting in a lot of hours, late at night, weekends. But it's going to be a great product and I can't wait to get it into the hands of our listeners. I know they're going to love this book. And we promise you very shortly we'll start making some pretty exciting announcements as far as who our publisher is and who our team is to put this book out there. So until then, this is James Nelson, your host of Real Estate Investing, live from New York. Thank you as always for listening. If you have not already, please subscribe and please leave comments. Maybe your comment is what you found most helpful in the show that helps spread the word, that helps find others find this podcast. And so we're really grateful for that. If you haven't already, also please connect with me at James Nelson NYC. You know, whether it's Twitter, whether it's LinkedIn or Instagram, LinkedIn would be the place to send me a message if you have any questions that we're happy to talk about here. And last but not least, check out james nelson.com this is the site that I built for you to give you the inside edge to real estate investing. That's where you can find all these podcasts with the show notes, as well as an exclusive video series, key terms, white papers that I've written. There's a lot of value there, so go check it out and sign up for the mailing list. There until next week. Thank you again.