Networking: The Secret of Successful Real Estate Investing

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Most seasoned real estate investors will tell you that there’s no secret to success when investing in real estate.

There are other real estate investors who claim that there is a secret to real estate investing success…as long as you buy their $50,000 personalized coaching product.

I think they’re both right.

There is a secret to success in real estate investing…but you don’t have to buy a $50,000 coaching product to discover it.

The truth is its free…and although most people don’t do it – anyone can do it.

The real secret to real estate investing success is…(drum roll please): networking.

Real Estate Investing Success Secret Revealed!

A survey of 12,000 business professionals conducted by the Business Networking International group helps clarify why. The study found that people who claimed that “networking played a role” in their success spent an average of 6.3 hours networking per week.

However, the people who spent less than two hours per week networking did not reap much reward from it at all. The study clearly showed that the MORE time you devote to the activity of networking, the higher degree of success you are likely to have.

Interestingly, the people in the survey who on average did just over six hours of networking per week claimed they derived nearly 50 percent of all their business from referrals — and these referrals were a direct result of networking.

Oftentimes, these referrals are not directly from the person they network with, but are what’s referred to as “second tier referrals,” meaning they came from other people through the person originally networked with.

It’s clear that the more networking you do, the more success you have.

How Relationships Factor Into Good Networking

One of the more interesting facts that came out of the survey was that out of the 12,000 survey participants, men spent MORE time networking than women did, but generated a lower percentage of their business from referrals than did the women.

Are women just better networkers than men?

Could be . . . and there seems to be a logical reason for this.

Men tend to be more formal and transaction-based when networking. This is called “cut to the chase networking”, and it’s not nearly as effective as the kind of networking women do.

Although not true in every case, men simply talk about business first and then talk about personal matter afterward, whereas women tend to do the exact opposite.

Oftentimes when men attempt to focus on the relationship first, the strategy comes across as forced. Then out of awkwardness, they get on to business talk – because it’s safer and easier to discuss.

What man hasn’t been guilty of that?

As Jerry Seinfeld once said, the idea of small talk to a man is three things: sports, women and what’s in the fridge.(not necessarily in that order).

Get Personal…Grow Your Business

The study showed that women just tend to be better with genuine small talk, getting personal without coming across as too personal, forced or calculated. When you are natural and easy in your manner, people like you better and respond more favorably to you. Men tend to stiffen up at these times and oftentimes more so than women.

Women focus on “the relationship first and the business second.”

This emphasis on the relationship first was a key factor that the study identified and no matter if you’re a woman or a man, we can all do it better.

The people in the study who had claimed to have achieved a high level of their business success through networking overwhelmingly felt that it was far better to build the relationship first, then focus on the business.

Women just happened to be better at this than men, but many male responders had done an extremely good job of achieving this objective. So it doesn’t matter whether you are a man or a woman, build the relationship first and do the business after.

The more you focus on getting to know the other person and understanding them intimately, without crossing the line, tends to be a better strategy when networking.

How to Become a Better Networker

Oftentimes, at “networking events”, Ive found that it’s difficult to develop a relationship all at once. Sure, attending Chambers of Commerce meetings, Business Networking International meetings, Rotary Club events and REIA meetings are great places to meet people and get to know people.

However, the real relationship occurs when you take that card or contact, then reach out to the person and invite them to lunch, breakfast or coffee. That way, your relationship has a very good chance of elevating to the next level of intimacy.

The trust and goodwill you create by getting to know them on a very personal level is the “social capital” that energizes a mutually rewarding business relationship.

So if you feel that networking has not contributed to your success, you are most likely doing one or both of these two things wrong:

  • You aren’t doing enough of it – six-plus hours per week is a good start
  • You aren’t doing it right – you’re probably going for the business before the relationship

In my experience, the more networking I do, the more my business grows. Every hour I spend networking is an hour well spent – whether its meeting new real estate investors for joint ventures, real estate brokers, Internet marketing guys, home inspectors, builders or private money lenders.

And networking is how you grow your real estate investing business and it all starts with forging these kinds of relationships through networking.

Networking Is Part of Your Marketing Plan

Don’t think of it as a chore that you have to do. Think of networking as a part of your marketing plan. The more you do it, the better you become and the more you get out of it. Just don’t be transactional, instead be relational.

Sometimes the best contacts I’ve ever met are the ones where I don’t actually talk business until the very end of the conversation as a “oh, by the way, what is it that you do?” If you’ve gotten to this point where you’ve built a strong, comfortable relationship before you even bring up business, then you are certainly on the right track. Chances are very good that not only will a good personal relationship evolve from that conversation but a good mutually beneficial business relationship as well.

So take the next step and look around your area for networking opportunities like Chamber of Commerce networking nights, local real estate investor groups on meetup.com, local REIA meetings or BNI groups. You don’ have to join all of them, just do a few to get your feet wet. Dedicate a certain percent of your time to attending these events each week.

Then once you’re there, be personable and relational, not transactional. Get to know people, then talk business. With all these groups, you are all there for the same reason, so the business talk is a natural progression, just let it come naturally.

Once you do all this, you’ll start to notice how much your real estate investing business will start to grow…and you didn’t have to pay $50,000 to learn how to do it.

What do you think? If you made it this far, please leave me a comment below! I’d love to hear about what you think of your secrets to real estate investing success or questions about anything at all relating to real estate!

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About Author

Michael LaCava is a full time real estate investor, house flipping coach and the President of Hold Em Realty located in Wareham, MA. He runs the website House Flipping School to teach new real estate investors how to flip houses and is the author of "How to Flip a House in 5 Simple Steps".

23 Comments

  1. A new fad with real estate investing groups is to do away with the monthly meeting in lieu of a monthly webinar. This eliminates a lot of networking as far as I am concerned. I may be an old dinosaur when it comes to all the new-fangled technology, but as far as I am concerned the whole point of having an investment group is to meet face to face for social as well as business networking. Just being around other investors, you can often pick up some good info just through osmosis. Webinars, texting and tweeting may be good for the younger generations who want to hide themselves in the background and communicate through technology. However,, for me nothing beats meeting people fact to face to network with.

  2. Dale I absolutely agree with you here. My best relationships
    Have been from live networking.
    It’s how business gets done.

  3. Very nicely written article. I agree with you that networking is very important. I recently started a new property management company and for the first year I spent most of my time getting the processes and procedures in place to operate. Now that I have all that in place and things are running smoothly I am starting to dedicate a lot more time to networking. I recently joined the Chamber of Commerce and am looking into some other opportunities as well. I like that you bring up that networking is more than just meeting someone and getting their business card. I agree that a more personal interaction like coffee or lunch is how you will really build a relationship.

    Thanks for the article.

    • Your welcome Mark. Keep it up as you will forge some great relationships
      From networking. Property management is something all real estate investors
      Need to consider regardless of how many units.
      What area are you managing in?
      Do you manage smaller units like 1-4 families?

  4. Hi Mike,

    Really great article. I often felt aquired starting the conversation with just business its totally impersional and I personally like to get to know someone on a personal level. At work its definetly benefited me to develop a relationship with my students and they continuously continue classes because of the relationbship we have developed. So the relationship not business is more important. I couldn’t agree more.

    • Thanks Maria. What age are your students. I beleive networking should be
      Taught in school or college. The earlier our kids are exposed to
      developing good communication skills and how to talk to a group the
      More successful they will be.
      Good for you! I like your way of thinking.

      • Thank you Mike. I teach mostly adults and they are usually working in business themselves but need help with their English. I totally wish I had learned some of those skills while in school instead I was kind of forced to develop that skill through work alone which definitely has helped a lot. I highly recommend Toastmasters International to anyone struggling with this I go to them to help me too.

        Maria

  5. This is so true. Being shy I struggle with mingling with new people, yet every time I do, I find I have added value to my business. Thanks for an excellent post.

  6. Hi Dan
    Check out BNI or toast masters. I belong to a local BNI and
    It is a great group where you can get a lot of business and will
    Definitely improve your speaking skills and getting over the fear
    Of public speaking.

    • Very true. I like to think of social media as a way to increase your social network, get to know other people in the same way you use networking face to face. Thanks for the comment, Phillip! Mike

  7. I love the idea of joining more groups to network. I think that the same things that make you successful in the corporate world are on steroids in the entrepreneurial world. I’ve never heard of the Business Netroking group you mention, but it sounds like a good one, so thanks for the tip. Do you recommend REiA groups over that one?

    • Depends what you are joining for Terry. check out http://www.bni.com for information.
      If you were only joining one & it was for real estate investing connections primarily then you should join the local REIA group as this is where you find the most like minded individuals in real estate.
      Hope that helps. Feel free to email directly if you would like for further details.

  8. Thanks for the article, Mike. One of the things I suspected, but always nice to hear it from a professional. Well stated and concise. I will take it to heart and make networking a #1 priority.
    Consider this reply an early attempt at networking – never know who I may connect with because of it. Thanks again and all the best! Paul

    • Agreed Paul. As I thought about the biggest common thread in success, not nay in real estate investing it is networking. Even contacts that you make that you might think will NEVER help you, somehow end up helping you. It’s truly amazing how it works. Glad it helped you please let me now how it goes with you.

  9. Great article.

    I never have any problems conversing with people (although it helps that I’m Australian, everyone likes to hear the accent). My problem is that I’m very to the point, whereas I guess I need to be more lady like. Wait, that didn’t come out right…
    But in all seriousness I do believe networking is the key to everything in life. And you never know who you talk to what benefit they’re going to be to you until you have a conversation.

    My question is though how do you go about getting 6 hours of networking a week when you’re just starting out and already working a job?

    Although this blog definitely worked as it’s the 5th one I’ve read just now and it’s the first one I’ve commented on, even though the others were great too. I guess in my brain I felt that, you’ll never know who will read this and it may turn into something…

    • There is your first goal Shane. If you desire it you will figure a way to make it happen. Start by going to 1 a week then 2 then 3. Create a plan and work the plan.

      All the best!

  10. That is a really good article and it comes at a good timing for me. Networking and being able to form stable relationships with people is a base ingredient of any successful business. I have struggled myself trying to overcome my fear of public speaking and talking to new people only to realize that once I make that very first step things are so much easier afterwards. I have come to realize that every time I have made positive changes in my work was through networking. I think it takes practicing and I intend to follow the suggested plan of having a goal to network at least 6 hours a week.
    Thanks for sharing and suggesting useful websites, Mike!
    All the Best!
    Evelyn

  11. Frank Dortilus on

    Great article, I have absorbed some valuable here. Relationships is key, there’s a saying that states is who you know is what get you in the door I found that to be true. My dilemma is as newbie I don’t know if I had much to offer, don’t have much time because I’m working my butt off saving to get into the world of real estate investing, and I’m absorbing as much as I can as if I’m a sponge ,anyhow this article is awesome it definitely point outs on how to not turn people off, thank you so much for sharing. I’m not really all that young but I found value networking through social and in person is healthy for a real estate investor or any one who is moving forward within their industry.

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