Many people consider real estate investing but find themselves at a loss, not knowing how to move forward. Then, they quit before they ever get started despite this being a wonderful time to begin real estate investing.
Did you know that the number one reason people don't begin investing in real estate is fear? And that fear comes from a lack of knowledge. That is why it is important that you arm yourself with the right knowledge so you can have the confidence to invest without fear.
This Isn't Quite Like Riding a Bike
If you were learning to ride a bike, the best way to get the knowledge and experience you would need to be successful would be to simply get on the bike and do what you've seen others do. After a few false starts and maybe a fall or two, you'd be riding. You can approach real estate this way, but it could cost you. False starts and falls can be very expensive, costing you thousands in potential profits or even eating into your start-up funds.
That is why seasoned real estate investors suggest that you gain your knowledge by hiring a real estate investing mentor. A mentor is someone that can help you learn the right ways to invest so that you don't lose money in the process.
• Want to know where your properties should be located? A mentor can help. • Need to understand a good asking price for a property? A mentor can help. • Having trouble calculating how much a rehab will cost? A mentor can help. • Don't understand how to negotiate a deal? A mentor can help.
No matter your questions or concerns, finding a good mentor can help you learn the ropes and become a successful investor without the fear that often accompanies a new venture.
Not All Mentors are Created Equally
Of course, this is only true if you find a good mentor, and like anything, not all people willing to help you are worth your time or money. Here are some good questions to ask as you try to find the right mentor for you:
1. Do you do real estate investments yourself? You want to be sure that you get someone that is actually investing in real estate and not just someone that “knows” about it from reading books or has past knowledge but is no longer actively investing. Book knowledge is great, but it is not sufficient. Past knowledge is great, but rules, regulations, and best practices change over time. Be sure to find someone that is currently investing and doing so well.
2. .Do you have any examples of investing you have done? Someone who wants you to pay them to be a mentor should be more than willing to show you some of their past deals, the types of deals they do, and the profits they have made.
3. How long have you been investing and how many investments have you made? What type of deals have you done? There is no right or wrong answer to this question, but if someone has
only been investing for 2 years and have only completed 3 deals, then you know that they are still new to the process. On the other hand, someone that has been investing for 10 years and has done over 100 deals is more likely to have the experience you seek.
4. How long is the training? Once again, there is no right or wrong answer, but you do want to be sure that your mentor is going to teach you the ins and outs of the process and be with you through at least one full project.
5. Do you offer houses for sale, too? It's perfectly acceptable that a company offering mentors also has houses for sale, too. However, you want to beware of companies who take your money for training but end up selling you a property that they have already found, funded, and rehabbed. If this is their method, then you won't learn how the process works.
It's About Transferring Knowledge
The entire point of hiring a mentor is to have the knowledge they have about the process transferred to you. That is why you need someone who will pass on the following:
• Help you determine which type of real estate investing is for you. This can be residual income, fix and flip, wholesaling, liens and deeds, and more. • Help you identify your niche market • Help you evaluate properties including such things as the ARV, rehab costs, exit strategies, cash flow projections, profit projections, and more. • Help you create your own team or network that includes such people as real estate agents, wholesalers, trades people, investors, bankers, and more. • Help you understand how to find, negotiate, and fun a deal.
How Much Is This Knowledge Worth?
Of course, you will want to consider how much to pay for a mentor. It would be great if there were a set answer, but the truth is that it depends on the following factors:
• How much time will you get? Are the times set? • Is the training one-on-one? • What will you be learning?
Be sure that your contract lists these items and specifically states what you will receive for you money.
With that said, in general, most paid mentors cost around a few thousand dollars and some go as high as $50,000, but that seems excessive.
If you don't like the idea of a flat fee, you might suggest that a mentor take a cut of the profits for a specific number of deals or a specific length of time. Paying a mentor 30% of net proceeds is a reasonable rate and often works better than a straight fee.
Whether you want to flip houses or find your niche in elite real estate, the mentor you choose should be able to help you approach your project with confidence. Put your fear in storage by hiring a mentor today and starting on the wonderful journey known as real estate investing.