Any serious real estate investor that has read the Rich Dad books by Robert Kiyosaki, or many of the other quality educational materials available on real estate investing – has probably noticed a recurring theme:
Have a “Power Team” of professional advisors if you want to build a big, successful business.
Robert Kiyosaki often talks about how his Rich Dad would meet with his attorneys, accountants, insurance people, bankers and other essential business associates/service providers to help him prepare, plan and execute his vision of building wealth.
Since Rich Dad, Poor Dad came out in 2000, Investor advisor I’ve noticed an increasing trend of people of experts advocating that you have a your “team” put together. That is, in order to build a successful business, you should have on your speed dial:
* an attorney – a real estate attorney if you’re a real estate investors
* a corporate/contract attorney
* a bookkeeper (to keep your records straight)
* a CPA or tax attorney
* an insurance agent/broker (to help you identify and reduce risks)
* a banker
* a mentor or advisor
There are probably some others that I’m leaving off this short list.
One big question is: is it really necessary to have this power team to build a successful business?
In short: my answer yes. But…
First, let me tell you the cynical side: a story about how an attorney blew up a private money deal and cost me a boatload of profits.
About two years ago, I was beating the drum and raising a ton of capital. A couple of potential private investors came into my office one day, sat down in our conference room and I laid everything out for them. These investors were already qualified and had indicated in multiple ways that they were ready to pull the trigger and just needed to see the details.
During my meeting with these investors, everything went great. Couldn’t have gone better. They signed an investment commitment for and we were scheduled to close a deal the following week.
They walked out of the meeting with my company’s disclosure documents, along with other required information for them to review before funding the deal. When they asked if they could have their attorney review the materials, I said: “no problem, I encourage you to do so.”
Flash forward to the following week, with about 72 hours before the deal was supposed to close. I called one of the two potential investors and I asked him if everything was ready to go. He hesitated for a second and then he told me that his attorney had advised him that “…this deal wasn’t such a good idea.”