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Story Time – “My First Mentor in the Business”
When my retail coffee shop business failed, I knew that I needed to pick a direction to go from there. My choices were, (1) pursue the passion that I had acquired for real estate from my books, or (2) go find a 9 to 5. Well, since I wasn’t married, didn’t have children, didn’t have money, I decided that I didn’t have much to lose, so you guessed it, I went after my passion for real estate investing.
Upon doing some networking in my area, it turned out that one of my business relationship friends knew someone who was active in real estate investing. The problem was, he lived in Louisville, KY and I lived in Lexington, KY. I asked my friend to introduce me to this guy. Little did the investor guy know at the time, that I was a man on a mission and I was going to work for him whether he liked it or not.
With time, I professionally pursued the new relationship and became an “apprentice” if you will, to this investor. It really was a win-win relationship. I would drive an hour to Louisville every day to work for this guy, willing to do whatever it took to give me more knowledge about the business. Overall it was about a six month period where I wasn’t making a penny, but I was getting an invaluable education about how to make money as a real estate investor.
Eventually, the time came where I was either going to move to Louisville and work for this guy full time, or stay in Lexington and start my own real estate investing business based on the knowledge that I had acquired. At the time, it was the scariest thing that I ever did, but I decided to make a go of it on my own. I was extremely fortunate to have been able to experience the business from someone already in it. This mentor, mentee relationship was invaluable to helping me gain confidence and get started as a real estate investor. I wouldn’t wish for it any other way.
This method of learning was so beneficial to me in my early days that I have made it a personal commitment of mine to reciprocate and give back to other aspiring real estate investors looking to achieve great success in this business.
You must constantly invest in your education as a real estate investor if you want to achieve great success and longevity.
That said, businesses also don’t succeed on pure drive and determination, although it could be argued that these things are ultimately what helps keep businesses afloat through growing pains and other challenges. In short, your vision and courage are most admirable but they aren’t a substitute for properly educating yourself on the nuances of your business. In this case, you still need to be able to understand the numbers, prepare paperwork, evaluate market conditions, interact with people, negotiate effectively, and ultimately determine the profitability of the real estate deals you pursue.
The adage ‘Do your homework’ has multiple applications in the world of real estate investing. Sure, it can refer to proper evaluation of deals, adequate due diligence, or even timely reliance upon your professional team. I’ll discuss these things in future articles. In the here and the now, the idea of doing your homework also means getting yourself properly educated in the business and, if you haven’t done enough to this point, there’s never been a better time than now. Now, make a commitment to education and treat this part of the process just like you would any other aspect of your business and success will soon be at your doorstep.
I will suggest a great first step - I am willing to provide you with a Free gift to really explore your potential in real estate investing. If you are serious about educating yourself and learning all you can about this business, you must take a look and decide for yourself how far you want to go.
Check it out here: www.freemakemoneygift.com/Invitation.html
The Education of the Real Estate Investor - Final Comments
Personal Coaching/Mentoring
One of the single most valuable pieces of education you can get as an investor is to work one-on-one with someone who is more experienced than you. Someone who has been there, done that. This can often be arranged for a fee. However, do not expect this to be inexpensive, remember, you are paying for someone’s time and years of experience. Either way, you can get the following benefits:
- Education from someone who has had both successes and failures
- Education in a one on one environment
- A chance to voice your own goals and interests
- A way to get all of your questions answered
- A way to learn at your own pace
Naturally, a coach or a mentor needs to be qualified to give you the most benefit so you need to choose carefully. The confidence that a coach or mentor gives you can be tremendous, because as you grow your business, you have a sort of partner (at least in mind or spirit) who can guide you through your early development. Some seminar programs offer these types of mentors and others can be found through networking locally. I highly recommend this tool and have met many successful investors who have benefited from it so please take my advice to heart, because this one piece of advice could potentially shorten your learning curve and enhance your initial chances for success as a real estate investor better than any other training tool available.
Experience (aka the School of Hard Knocks)
Some investors adamantly argue that this form of education is second to none but I don’t think it’s a prerequisite to quickly becoming your local real estate investing guru. I’ll be the first to admit that experience is a necessary part of an investor’s so-called curriculum. After all, what good is the rest of an educational package if it is not put to use in the real world? Experience based education is certainly valuable in its own right and can be a mixture of both good and bad experiences such as the following:
- Facing litigation
- Having to go to court to evict a tenant
- Having tenants trash a property before they move out
- Losing an escrow deposit
- Taking a loss on a property that ended up being a money pit
I could go on and on and I think you get the idea here. Experience can make us wise to what happens down the road and, in the absence of some background education, can also be quite painful and expensive. Experience can and should be considered a beneficial supplement to some other forms of training, the type of training that can help you avoid certain key pitfalls in the first place. Using a well-rounded mix of education is perhaps the most valuable thing you can do and it perhaps will keep you from blindly accepting what comes your way as ‘just a part of the learning process.’
Experience is something that all investors gain over time and I’ve always found it helpful to gain from the experiences of others before embarking on something new myself. Teachers who are willing to share both their knowledge and their past experiences (good and bad) are abundant in the world of real estate so why not take advantage of this before having to experience all the ups and downs yourself like you were the first person who ever tried it. Take my word for it; there is no substitute for experience in this business. You just don’t have to experience all the possible mistakes and poor decisions yourself to learn from them. We’ve all made mistakes and we’ve all made bad decisions, and anyone who has been in this business for a while, as I have will certainly attest to that. Learn from this, learn from the experiences of others, and your own educational journey will be a smoother path to success in real estate investing.
The bottom line is this. Education is not just a hot topic for the news media and for politicians. It is an essential part of being successful in any kind of business. Just to remind you, you don’t need a traditional education (be it a business degree, MBA, etc.) to be a success in this business. Numerous studies have shown that traditional education, despite what benefits it offers and value it may have, is anything but a solid indicator of future financial success.
I am dedicated to helping others learn real estate investing. You just can’t beat working one on one with someone who can take you through a deal step by step, guiding and assisting you the whole way. That type of learning is invaluable and will be an investment for ALL your future deals. If you would like to learn more about my mentoring groups, please go to:
http://www.ultimaterealestateinvestors.com/membershipsignup/membership-levels/
Huge opportunities await you!
The Education of the Real Estate Investor - Continued
Attending Meetings at a Local REIA
One of the easiest and most cost effective ways to educate yourself as a real estate investor is to attend local meetings with groups organized just for you. REIAs (Real Estate Investor Associations) are very popular, are widespread, and can provide valuable information to you at a reasonable cost. The low cost and convenience of REIAs are two clear upsides. The downside is that the organizers dictate the topics that are presented and who does the presenting. You have little control over what you learn and when because you’re not making that call. My suggestion is to use this as a component of your educational process and, especially if you want to get on the fast track to success, this should only be one of the many areas of learning for you.
Membership in a REIA gives you credibility, and not just from the education you will receive. You’ll also have the wonderful opportunity to network with other investors and get your name circulating around. These investor peers are people you may likely do business with in the foreseeable future. Wouldn’t it be nice if they were already familiar with you?
Seminars
It seems like the real estate seminar concept has been just beaten to death at times but be that as it may, it is still an educational outlet that produces countless successful investors each and every year. There must be something to it, beyond the cynics who claim it is ‘gimmicky’ or a good way to part otherwise decent people from their hard earned money.
I’ve been around this business long enough to be at least familiar with most of the top seminar speakers out there and I’ve compiled a brief checklist of things to consider when evaluating seminars as an educational option. First, expect to pay more for seminar education. It will be more expensive than other types of education so be aware of that up front and don’t be one of those investors who expects something for nothing and walks away grumbling about the cost of the education, citing it as some sort of rip off. Yes, some programs are better than others but they will educate you and will usually do so in a shorter time frame than many of the other options you have.
Second, look for a company that has some diversity of training programs. Many seminar speakers like to hone in on the hot topic of the day (e.g. auctions) and fail to educate their attendees on some of the more basic fundamentals. Last, be ready to learn. Adults learn more slowly than young adults and need more repetition for things to stick. Therefore the learning process can be tiring, especially if you still have a traditional job. Real estate doesn’t have to be a full-time venture at first but, if seminars are your choice of education, be ready to spend some time at the training events and be ready to do what they tell you to do.
In almost all cases where seminar attendees are dissatisfied with the education they received, it comes down to whether or not they did what they were taught to do. When and if you decide to invest your money in seminars, boot camps, books, tapes, CD’s, DVD’s, etc. always keep in mind that you are paying a premium for this information because it is information that could make you a lot of money. However, it will always be up to you to take the information you invested in and put it into action. Your investment in this information is worth nothing unless you act on it. Therefore, if you really don’t have the time for this intensive style of education, that’s fine. Choose something that fits your schedule and be OK with learning and growing your business more methodically. That’s perfectly fine and especially if that’s what best fits your current obligations and lifestyle.
Seminars are often comprehensive, giving you a crash course or ‘boot camp’ of sorts for real estate investing, and thereby accelerating your educational progress and quickly preparing you in the lingo you need to be familiar with. An investor attending a comprehensive seminar may pay more up front for their education but it is usually highly focused and gives them the ability to almost instantly go out and start working the business like someone with more real time experience. For the passionate beginner who wants to learn and learn fast, this may be a great way to go to both get educated and, by doing so, give you more confidence to immediately go out and start making things happen.
Seminars also put you in contact with a variety of potential peers that have goals similar to you. Take advantage of this by exchanging business cards and making contacts for future reference and support.
Coming next, my personal favorite, mentoring and coaching. So, be sure to check out that post in a couple days. In the meantime, consider accepting this Free gift from me to you. Go here: www.freemakemoneygift.com/Invitation.html
The Education of a Real Estate Investor
What do you think of when you hear the word education? Do you think of the fundamentals, like the ABC’s? Do images of the hallowed halls of your alma mater come to mind? What about practical education? Did you need a certain degree or even certification for your current profession? Any or all of these things are reasonable interpretations of what it means to be educated in today’s society. That said, how does education apply to real estate?
Real estate investing, for as valuable commodity as the product is, is a profession that doesn’t require a degree to get started. Sure, policy makers when it comes to real estate interest rates and such have a finance background. Sure, some of your team members have a solid educational background (CPA’s and attorneys come to mind) but most were not trained in real estate specific areas. What about realtors and mortgage brokers? Basically, it works like this. You take a training course over a few weekends, pass a test, and you can be licensed to either broker real estate or issue mortgages. Not exactly the pinnacle of educational scrutiny, now is it?
Don’t get me wrong here. I’m not scoffing at the training certifications for these professions because you, as a real estate investor, need even less formal education to do what you do. There is no requisite certificate or degree that stipulates you are able to invest in real estate. All you need is the desire, right? Oh, I wish it were just that simple. If you think about it, part of the animosity faced by real estate investors from other professionals in the field may be due to just that. We’re out there making offers, working deals (at least if we’re doing what we’re supposed to) without any sort of training. From the standpoint of the critics, it’s just a step shy of real estate anarchy! I of course don’t see it that way and yet I find it useful to see things from an alternative perspective from time to time.
Although informal and absent professional credentials or certificates, education for the professional real estate investor is available and can take any number of forms. Many investors to their credit and benefit take advantage of several of the education options available to them. Some of the most common forms of real estate investor education include:
- Books and/or audio materials
- Attending meetings at a local Real Estate Investor Association (REIA)
- Seminars
- Personal coaching/mentoring
- Experience (aka the School of Hard Knocks)
Let’s take a moment to explore books/audio material. In posts to follow, we will go through each of the forms I listed previously. Again, while no one educational outlet can ever promise to deliver everything you need to be successful, every little bit helps and can help build your arsenal of knowledge.
Books and/or Audio Materials
Never underestimate the power of a good read. I heard someone say that once and I have no doubt there is truth to the statement. As an investor, however, you must look at books (or their audio equivalents) as resources, rather than your primary source of education. Just to rehash, books can provide you with the following: Basic real estate knowledge, inspiration, a financial vocabulary, an overview of real estate techniques and examples of how to interact with clients.
The list could be longer but my point here is that books are a basic type of resource, giving you so-called ‘literacy’ in your craft. They may also be your source of inspiration. Perhaps it was a book that first gave you the idea to become a real estate investor and, if so, that’s great, because for me it was a book that originally sparked my intrigue with this business. What books do not and cannot give you however, are real world experience and they should never be a substitute for going out, interacting with other investors, building a professional team, and simply working the business.
I’ve seen many an investor who had an impressive real estate “library”, full of books, home study courses, and even audio and video materials. Sure, it looks impressive, but the real validation of a real estate investor comes from actually doing deals. I’m in no way discouraging you from acquiring reading materials, as these will all help you educate yourself in some way and build the confidence in your ability to step out of your comfort zone to succeed.
What you want to avoid is the tendency to keep acquiring more books, looking for that proverbial ‘golden nugget,’ when your fear of taking action is what is actually holding you back. This may not apply to you, but if it does, take a more rounded approach to your education, get out there and start physically working the business, and it will be easier to cross that hurdle into success.
And while I’m on the subject of good books that may trigger your go button, I have one you should consider. Check it out here:
www.freemakemoneygift.com/Invitation.html
On, Wednesday I’ll continue to outline resources for educating yourself as a real estate investor.
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