Not one person in the world is completely “self-made.” There was a mentor behind every successful person. Behind every great real estate investor was a great mentor. Your question is likely how you find the right one. You’ve got to ask yourself three primary questions when selecting a mentor.
A. Do you want to be a creative investor, or a traditional one?
The first thing you’ve got to do is decide what type of real estate investor you want to be. Do you want to do creative real estate investing or traditional? Knowing which one you want to do is crucial. You won’t get very far unless you make a firm decision regarding that. So, what’s the difference out of the two?
If you plan to be a traditional real estate investor, you’re going to want a local mentor. What makes a great traditional investor mentor? Well, great traditional real estate mentors are those that are skilled at consistently finding great contractors of ra great price. A great mentor will be able to move on big deals fast. They know the area better than anyone else; they’ll know off the top of their head which areas are good to invest in, and which are bad. Most traditional real estate deals require immediate action, as to not lose out on it to somebody else. They can spot trends in the local market, and buy (or pass) accordingly.
A really great real estate agent can sometimes be a perfect traditional investing mentor. They can introduce you to title companies, great contractors, and good mortgage lenders. These are all necessary in order to thrive in the business. You can’t make it on your own, you’ll need a great team.
B. Or, do you want to be a creative investor?
Creative real estate investing is for you if you want to invest nationwide. In this case, you’ll want a nationwide mentor. What’s interesting is that creative investing strategies typically work in every area, due to the fact that they are based on motivated sellers. Motivated sellers are not specific to any one location; instead, they are everywhere. For example, homeowners who want to move the house immediately for some universal reason. Such as financial issues, a death in the family, issues with their mortgage, a or a marriage falling apart. A great creative investor will be so skilled that they could move literally anywhere else in the country and do just as well for himself. Of course, there are laws that differ depending on location; for the most part, a great creative investor knows that his success is not dependent upon the location.
This type of investing requires the ability to get extremely creative. Thinking outside of the box is essential. Creative investors usually don’t play by a strategy rulebook. They look at what investors around the country are doing in order to get ideas. Some of the top-tier mortgage brokers are nation-wide companies, rather than local. There are times that using only local brokers or title companies will limit you from getting the deal done at all.
Know that the market is limited
The amount of motivated sellers willing to sell to creative investment is limited based upon market size. When it comes to creative investing, the more of them that there are in any given area can make the competition stiff. Finding a creative investor to share their hacks and strategies with you will prove difficult. They don’t want competitors.
What are the drawbacks of local mentors?
There are some local “mentors” who will pretend that they will teach a new investor the business, when really they are only trying to share just enough, in order to find deals that will benefit themselves. Why? This is because creative real estate investors are frequently trying to find motivated seller leads, while spending as little money as possible.
Generating leads can cost a lot of energy and time. For example, you’ve sometimes got to literally drive around neighborhoods searching for “For Sale by Owner” homes, or looking for vacant properties. If the mentor lacks the time to spend doing it himself, he’ll get a naive, free student to do it for him to repay him for his help. There are some “mentors” that like to do this; in this situation, you can end up not getting paid. In some cases, they’ll even steal from you. You’ve got to pay close attention to who you choose to let mentor you.
After reading that, it’s easy to see why it’s better to choose a nation-wide mentor to learn about creative investing from. Local creative investing mentors don’t want you getting too good, or they’ll face competition. So they certainly don’t want to properly groom their competition. Nationwide investing mentors are going to actually show you the real-deal ropes. They will also be able to share more ideas, team members, and strategies to you since they’ve got so much experience, geographically.
Is the investing mentor both passionate about the business and great at their job?
When choosing a real estate mentor, ask yourself: are they successful? Just because a mentor is very smart, and a great mentor, doesn’t necessarily mean that they are successful at real estate. Some people are great investors but don’t have the desire or patience to teach other people. There are some investors that have tried, but got sick of their students not listening to their advice. Thus, they felt their efforts were being wasted. Great investors don’t appreciate when a student that they are taking time to teach thinks they know better, which is understandable. Many students have to learn the hard way. You’ve got to make sure that the creative investing mentor you choose is successful across the nation, not only locally. Choose someone that wants to become a nationwide mentor.
Be aware, that not everyone is a great teacher
Other times, you may have an extremely passionate mentor who is a fantastic teacher…but they aren’t successful in the business. Some of the best real estate teachers actually don’t do well themselves. These mentors are possibly among the riskiest mentors because while they are great at teaching, they aren’t teaching you correctly. It may be tempting to choose a mentor like this, because typically they aren’t very expensive.
Many new, hopeful real estate investors don’t have the money to get started, and pay a lot of money for a mentor. Therefore, they’ll go with the cheapest option. You can’t learn to make money from someone who isn’t making money. Even if you have to spend a lot upfront for an excellent mentor, you’ll make that money back and then some. Consider it pennies, actually, compared to what you’ll make. Choose an excellent mentor; don’t let money be your guide when selecting one.
Finding a genuine local mentor may prove challenging
If you want to do traditional investing, we’re here to tell you that it’s going to be a lot harder to find a successful investor willing to teach you. This was touched on earlier in the article. The fact is, there’s simply a smaller pond of willing mentors locally. They don’t want competition, and certainly don’t want to groom it to do better than they are. Don’t sell yourself short. It’s worth it to go a little bit outside of your area, but still choose one within the same region. Another alternative is to find a nationwide mentor, and see if they have some mentors close by that they can recommend to you. Again, choose someone who has the best of both worlds; they are successful in their career, and also a great teacher.
What is the real estate investing mentor’s actual motivation behind teaching you?
It will behoove you to find out the investors intentions behind helping you. Too many people make the classic mistake of not finding out why this investor wants to help you. Everyone has motives for each and every thing that they do in life. Most people don’t genuinely want to help you out of pure kindness. Be wary when selecting a mentor. Mentoring someone in this business is a very long-term process. It is hard work, and drains a lot of their time and energy. The mentor has to be really serious about working with you…but for the right reasons. It’s up to you to use your brain to decide whether or not they are genuine. Be sure your head isn’t in the clouds.
Why might a real estate investing mentor’s intentions might be misguided?
If you are getting into traditional investing, and have found a real estate agent who is involved in investing to mentor you, that realtor’s motivation to mentor you is almost always to get you to purchase real estate. After all, they make their living off of commissions; they only receive commission when somebody purchases something. The realtor is almost always going to tell you to purchase, because that’s where their paycheck comes from.
If you’re getting into traditional investing and you find a locally based mentor that claims the plan is to teach you by doing a deal together, but you’ve got to supply all the funds…be nothing but skeptical. This situation is fishy, and almost always for a reason. If a real estate mentor is successful already, they won’t need (or want) your credit, or your cash to do a deal or sign a mortgage loan.
At times, a real estate investing mentor is going to charge you fees upfront before they’ll teach you. While this arrangement can work, understand that they basically have told you what their motivation is without opening their mouth. The motivation to “help” you is money. If you get in over your head on a deal, they aren’t going to need to help you out, because they’ve already been paid.
Their motivation is gone and had already dissipated when you wrote the check. It’s the same as paying a contractor before they’ve begun the job. Would you ever agree to pay upfront to a contractor? Probably not. You really shouldn’t even pay a babysitter when they arrive for the evening. They’ll still stay there and watch the kids…but their motivation to actually play with them, and be involved in the evening is gone. They’ll likely spend the evening on the phone with their friends, or putting the kids to bed early so that they can watch television. Fact.
Share in profits
In the end, the absolute sure-fire way to make sure that your real estate investing mentor has sound motivation to help you is to combine incentive. For example, create an arrangement where you two share the profits. When the mentor makes money, you make money and vice-versa. This way, it’s a win-win. Likewise, if a deal is falling to shreds, they’ll step in and actually help you because it affects them equally if the deal goes completely in the water.
If you’ve already put up the cash for a mentor, or, are currently deciding on one…how did you find them? Did you find them from online research or ads? Did you read one of their books? If they came to you, you can pretty much bet that it’s not the right mentor, and that they do not have the right motives. A successful mentor isn’t running around trying to find students. Instead, a student will find them, and they will take serious time to decide if they have the time and patience to help you.
In short, you’re going to want and need a mentor if you want to be successful. You’ll likely have to pay in some form or the other to get one, but it will be well worth it in the end. One of the largest mistakes fresh investors make is trying to learn everything on their own. The fact is that you gain the knowledge you need to know about real estate through experience. Nothing will beat it. And obviously, you haven’t experienced anything if you’re just starting out!