If I had to start over with no experience or money, I’d probably begin by reading a lot of books and going to a few local investor meetings.
Most cities have various meet-up groups and more formal meetings where investors and wannabe investors can go to network and learn different aspects of the business. Sometimes you pick up good deals or a few tips here and there. (I even bought a house at one once). They generally happen monthly and have a guest speaker who talks about something real estate related for about an hour.
When I was starting out, I went to all of these I could find. Now, I occasionally go if there’s a speaker I’m interested in hearing. A few months ago I went to a local investor meeting. This one generally has two or three hundred people at it, so they pull in speakers worth listening to from time to time.
Before the main speaker a lot of these meetings have some sort of deal maker’s exchange. This one called it a “have / want” time. Here, different people can come up and pitch their widget. A great example would be: “I have a 4-pled with a repaired valued of 800k under contract for 400k. I don’t have 400k, so I’m looking for an equity partner. Or I’m looking to wholesale the contract for 450k”.
See, they have something kind of interesting, and they want something for it.
Well, every now and then, you get someone that just says the weirdest thing. At this particular meeting a nice sounding girl got up and said: “Hi I’m so-and-so and I am looking or a mentor to help me locate and buy an apartment building with at least ten units in the next six months.” Now, I’m all for being ambitious, but it’s also important to set somewhat realistic expectations. The MC was in a good mood so he asked a few questions:
Do you have any experience in real estate? No.
Have you ever bought a deal? No.
Do you have any money? No.
Do you have any rental management or construction experience? No.
Are you willing to share equity in this hypothetical project with your mentor? No. I’d rather not.
Are you willing to work for someone for free to learn the ropes? Maybe some but I have a job that takes up a lot of my time.
What do you bring to the table? I’m ambitious and a hard worker.
Ok, well good luck with that. Next…
Yeah, that exchange actually happened. When just starting off, it’s ok to have no experience. But it’s also important to know what you bring to the table. This person wasn’t actually too far off. The main problem was she wasn’t willing to offer anything to hypothetical this mentor.
When you buy a deal you need:
1. A deal (pretty critical here)
2. Money (can’t buy something without money)
3. Experience. (This will help you come up with a plan for the project)
4. A team to work with you to carry out the project.
You likely won’t have all these lined up when you first start. So, check off as many as you can and then work at whatever’s leftover. That’s the great thing about this business. You still can start with nothing and build something. But you have to make sacrifices. For example, if you don’t have money, you can probably get it for the right deal. But you’ll have to pay something for it.
There’s nothing wrong with looking for a mentor. In fact, a lot of people think it’s the only way to go. But know what you bring to table. Maybe you bring a free lunch to the table and you go from there. Most real estate guys love talking in exchange for a little food. You can learn a lot in a two hour lunch. The problem with the girl at this meeting was she wanted to be spoon fed everything and didn’t offer anything in exchange.
In life, you often get what you give. And it’s better to share a little and get a good sized piece of the pie than it is to shoot for taking the whole thing and end up with nothing.
