Do your due diligence on the team members you trust and use
We all know it’s a team effort to invest in property and not a solo show. So, it’s important to choose the right team members while you’re on the property journey to ensure that they help you with moving towards your goal.
The issue I had in the early days was that we would take referrals from other investors for team members without doing our due diligence. It builds on the high level of trust established between you and the investment team members you have around you, so logically, you would take their referrals for granted as well.
Earlier in my investing life I’ve had an experience where a referred builder took the deposit for a piece of agreed renovation work and simply vanished. The deposit was not significant (only about $4K) but it did ruin my original plan where the property would have the work completed and ready for rent prior to Christmas.
I couldn’t find another builder to turnaround quickly, and I couldn’t secure a tenant being so close to the Christmas period, so it ended up being a prolonged period of vacancy into the new year.
So what did I learn out of this experience?
Always validate the team member’s credentials. Look them up online to see if they’re legit
Because of the high level of trust my PM built with me back then, I took her recommendation for granted without doing my own due diligence on the builder’s licenses. Apparently, this builder had been a pro fraudster for a number of times now, and was able to get away with it every time. Check, check and triple check!
Check the referred person with other fellow investors
The referred person could have a commercial agreement with your PM, accountant, broker and so on, so it’s best to validate from other investors who have worked with the person before. If you’re getting consistent positive feedback about the person’s work then it’ll minimise your risk of picking a dud team member.
I find going to a property investor meetup is really useful in this instance. Other property investors are always open and willing to share who they use and what their experiences are like, so if I was to do it again I would run past the investor community first.
