The real estate entrepreneur (or any entrepreneur for that matter) wears many hats throughout their investing career. This is especially true when they are just starting out. As your business grows, you can hopefully begin to hire others to take some of those hats off your head, but some you will always wear.
Here is my list of the many hats I have worn and still wear to some extent today. Some were expected. Some fit quite well while others were difficult to put on to say the least. As I write this blog in the coming weeks and months I want to be able to share with you how I wore these various hats, what I learned and what I would do differently if I had it to do over again. In other words, learn from my mistakes so you can be smarter than I was. Till then, here is my list.
- CEO – You knew about this one. Of course you are in charge, this is your business and the buck stops with you. But it is not like sitting in an oak paneled office smoking cigars and collecting stock options. You are the decision maker and your business will sink or swim due to the decisions you make, so choose wisely. This is a hat you will always wear.
- CFO – Are you good with spreadsheets? Can you balance your checkbook? Understand all those IRS rules? I hope so, because as Chief Financial Officer you control one of your company’s most important assets, cash! Some words of advice for you. Watch every penny and put money aside every month for a rainy day because sometimes it storms and never take this hat completely off.
- Acquisition Manager – You had better know those three words that drive all real estate, location, location, location. Pick a good location (a neighborhood, a city or even a region), learn the numbers of that location and start farming it for properties to add to your portfolio. You can teach others to do this, but keep this hat close.
- Asset Manager – You have to keep your properties maintained or good tenants will go elsewhere. That means they need to look nice and you need to fix problems quickly. Tenant turnover is a killer in this business. If you find a good tenant, work hard to keep them by giving them a nice, safe and secure place to live. To do that you will need to wear a few of sub-hats here.
- Contractor – Most likely when you are just starting out in the real estate business you are going to save many by fixing up the property yourself. You will do some drywall, painting, refinishing floors, etc. This is good because you do save some money and you learn how to do these things when you eventually do hire a contractor. Pick up this book to help you.
- Handyman – Do you know how to fix a washing machine? How about replace an element on a stove? Patching a roof perhaps? Better learn. This book was really helpful to me.
- Landscaper– Grass needs to be cut and leaves need to be raked. Bushes and trees will need to be trimmed and trash picked up. When you are just starting out this is one of the
- Sales/Marketing Manager – You will need to sell your rentals to potential tenants. Why should they buy from you? Why is your property any better than the one down the street? Putting a “for rent” sign in the front yard and hoping for the best is not enough anymore. You need to be found and you need to show prospective tenants that you are a professional, and that they will be respected and treated well.
- Webpage Designer – If you are not on the internet these days, the world is almost blind to you. Professional designers can charge thousands of dollars. This expense is unnecessary, especially when you are just starting out. There are many services and programs out there that will get you up and running on the web for minimal costs. Just look at the site you are reading.
- The Legal Department – You will need to know your local laws regarding rental properties and evictions, otherwise you will make some stupid mistakes. In addition to that there are zoning issues, building codes, housing codes and tax codes. Better be at least aware of these things and know when and who to call when you need a competent attorney. You can find one here.
- Secretary – Need something mailed? Need some stamps and office supplies? Need copies made? How about setting up those tenant files? Heck, you even get to make the coffee!
- Receptionist – You are the first contact people will have for your business and the old saying is true, you only get once chance to make a good first impression.
- Housing Code Enforcement Officer – “You mean I can’t park on the front lawn?” No. “But I need that scrap metal for my sculpting class.” OK, but you can’t keep it on the front porch. “You just do not understand art.” Be that as it may, the 10 foot tall inflatable Santa still in the tree in February needs to go. How do you find out about these things? Hopefully it is not because of a letter from the city, but because you are proactive and regularly drive by and inspect your properties.
- Life Counselor – Our house rules state that we do not do tenant drama (it really does!), but sometimes you still get sucked in. Roommates get in fights and want to move before the lease is up. Couples split up. People loose their jobs. Life happens and you get caught up in it. Be cool, calm and professional.
- Mover – Need to get somebody out? I have helped them load up the car to hurry things along. Did I want to do it? No. Did I want them out of my property? Yes. Sometimes you just got to do what you got to do.
So there you have it, my list of 15 hats. Did I miss any? Let me know. Until next time work smarter not harder.
