The key issue to being effective in residential real estate would be to surround yourself with all the right people. This means building the ideal team. If you're going to control and get possessions, you want access to those folks that are going to help you acquire the stock.

I love to begin building my team with seasoned real estate agents. While I talk about seasoned real estate agents, I suggest somebody you can effectively work with and who knows your organization.

As we've seen in the past several years, especially prior to the crash, a great deal of people started jumping into real estate. So anybody -- your neighbor who used to be a mechanic all of a sudden turned into a real estate agent.

There is nothing wrong with this, but the fact is expertise helps and it'll get you out of trouble when you really need it. Luckily, those that have stayed through this cycle have learned the intricacies of the machine will have the ability to flourish through what is coming up in the residential real estate cycle, and that's key.

You will also want to search for accredited contractors. Some projects require an experienced and certified contractor, not just a handyman. Do not get me wrong: Handymen are excellent as well. You don't require a licensed contractor for every form of work. There are minor matters such as painting or crown modeling, small details that a handyman can perform. But you will need somebody who is going to be able to submit an application to the county, receive the permit, get the permits and have the expertise to tell you what the structural damage is on possessions, and a certified contractor is a essential team player.

I recently got a call on a property from a worried investor with whom we had formerly worked. He explained he'd bought a fourplex at Huntington Beach, California, through a third party, and he found out the property had about $140,000 of structural damage.

He ran into this problem since he did not partner with the right team. The broker that helped him get into that property wasn't an experienced agent. The investor needed a handyman -- instead of a licensed contractor -- do the review of the house to find out if it was a good purchase.

If you do not have the right team in place, you can get into situations like this. The property itself may look like a fantastic buy, the amounts are excellent, and you have a stop buyer in place. However, since you did not have the ideal team in place, you get stuck with losses that could actually hurt you.

You are always looking out for your business. If you are going to be prosperous in residential real estate on a bigger scale, keep in mind that it is a team game.