Real Estate Investing Clubs: Worth the Time?

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Depends. What do you want out to get out of them?

I definitely see pros and cons to the Real Estate Investing Clubs that seem to be everywhere these days. For anyone wanting to join these or thinking about joining, especially if you are newer to real estate investing and trying to figure out how to get started, I want to point out some things to think about in attempt to help you get the maximum benefit out of them.

Real Estate Investing Clubs: Use Your Time Wisely

Don’t go to just any REI meeting you find or join just any group. Pick one that sounds like it can really add value to you. Obviously if you have an interest in wholesaling, and there is a wholesaling event coming up, by all means do that one. If you are just starting out, look for events geared towards beginners so you don’t accidentally end up not understanding a word anyone is saying. If you are a female and think you would be less intimidated in an all-female setting or just like the idea of meeting other females in the industry, there are plenty of female-only investor groups. If you are just focused on networking and want to meet other people, awesome! Connections are definitely a mandatory part of succeeding in this industry.

You get what I’m saying. Be smart about where you spend your time. There are so many real estate investing clubs out there now that you join and meetings you can attend, you don’t want to go to just any of them. As the saying goes, “time is money” and that holds no truer in any other industry than this one. Spend your time wisely.

Benefit vs. Hurt

If you understand the benefits you can get from going to REI meetings and events, you will know what to focus on while you are there. If you understand where these meetings can hurt you, you will know what to watch out for while you’re there and avoid it.

Benefits

What good can come from these meetings? A lot actually!

  • Learn about options. No, not lease options or buying options, I mean options, like choices/possibilities/opportunities. Not only will you hear of different methods of real estate investing you may not know about, but you may also hear expansions on the methods you are already familiar with.
  • Networking. Everyone knows this term. But what are the real benefits of networking? You may meet mentors, people who you eventually do business with, resources for good contacts (need a new accountant who specializes in real estate investments? Somebody there may likely know one), and in general some really cool people that you may enjoy hanging out with in the future and learning from. You may also be fortunate enough to meet people that you can learn lessons about how not to be. If I’ve learned nothing in real estate, and this goes for most industries I would imagine but especially in this one, your reputation will always supersede you. Believe it or not, real estate investing is a surprisingly small world. You’d be surprised how many people may be very quickly warned not to work with you if you give someone a reason to not trust you. Learn from those who impress you and those who don’t how to conduct yourself.
  • Learn skills. Especially in trade-specific meetings and events, you are likely to learn new tools and resources that will help you excel in your projects and dealings. Every little tip helps. I have attended numerous 2-hour seminars that are free but are mostly geared to selling you a more extensive course (usually with a hefty price tag!). Most people leave knocking on the fact that all they heard was a sales pitch. Yes, the sales pitch was there, but so was just enough information to let me take two pages of notes with some really good bits of information! If you learn only one new thing from an event or meeting, you’ve succeeded. Sometimes it only takes one line of information to make you millions of dollars. Again, just know who you are taking the advice from and use your judgment about the validity.

Don’t Let Bad Information Hurt You

I always preach about not taking advice from people you wouldn’t trade shoes with. If Joe Blow is telling you how to flip a house or where to buy a property but he himself lives paycheck to paycheck and hasn’t been to the dentist in ten years, you may want to be suspicious about his advice. If someone who is financially free living the life of their dreams gives you advice, they may just know what they are talking about. So with every contact you make, always analyze the person before you take their advice. There are a lot of talkers in this industry. Make sure you know which ones actually know what they are talking about. Here are some folks you will most definitely meet in REI clubs and meetings that you want to be sure to keep one eye open on.

  • Salespeople, and better yet salespeople on tape. Not all salespeople are bad. Sales are a critical part of any business, including investing, and even the best products have to be sold. There is a difference however between the shady salesman and someone who actually cares about your success and sells you something that can add value to you. The shady salesman could care less what happens to you after you buy his product. The legit salesman actually does care and may even follow up and build a relationship with you. What is the reputation of the guy you are thinking of buying from? Do some research. Ask other investors if they’ve dealt with him and Goggle reviews if they are available. Especially don’t hesitate to ask the sales guy a lot of questions. Asking questions can often differentiate the legit guys from the less-legit ones. How-to tapes (am I actually using the word tape?) and videos can be excellent tools, but research the program before you shell out a lot of money. More than that, realize there is free training out there too. You might be surprised at how many experienced investors are willing to help you along. Paying for training isn’t bad, just be smart about it and still keep an eye out for opportunities to get your foot in the door for free. Be especially cognizant of salespeople at the beginners’ clubs and meetings. They know they can usually trick a newbie easier than they can an experienced investor. Being sold a bogus program can not only be expensive but it can deter you from staying in real estate because of such a big loss right out of the gate which would be the most unfortunate outcome.
  • People who want it but never do it. There is nothing wrong with these people in terms of who they are. Real estate investing can be scary and some people really want to do it but just can’t get past the fear. That’s fine. Why I caution to watch out for these folks is because they can severely hold you back. If you don’t have fears now, you will by the time you are done hanging out with them. I’ve also heard a lot of “investors” give generous amounts of advice but they admittedly have never done a deal themselves. Ummm…ok. If they’ve never actually done a deal, I’m not positive I can trust their advice fully? I mean, maybe they are just really good spectators and do have very good observations, but they certainly won’t be a primary resource for success.

Be smart when it comes to learning investing. Don’t be afraid to be choosy when it comes to who you take your advice from, don’t hesitate to question someone, maintain a positive reputation and follow others who do, and always seek out multiple streams of learning! Your time is valuable and wasting it isn’t going to get you far.

What is a single line you heard at a seminar or event that has stuck in your head ever since you heard it and you believe it has significantly contributed to your success in investing?

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About Author

Ali Boone(G+) recently left her corporate job as an Aeronautical Engineer to work full-time in Real Estate Investing. She began as an investor only two years ago but managed to buy 5 properties in just 18 months using only creative financing methods. Her focuses have been on rental properties and overseas investing in Nicaragua.

19 Comments

  1. Great article Ali,

    The majority of my clients are investors and I’ve come across “wannabe” investors that are part of Real Estate investment clubs that shoot themselves in the foot learning Bad information in their particular clubs from who knows where. (Late night infomercials is my best guess with some of the whacky stuff they come up with.)

    I’d say the most important benefit that you can get out of belonging to a real estate investment club is the networking and learning the basics such as cash on cash returns and Return on Equity. Other then that… if somebody just finds a truly experienced real estate agent that knows how to run these calculations… stay away from the whacky get rich quick schemes that are often found in these clubs.

    As I tell my clients…. the more money I make you… the more money I’m going to make.

    • Paul, you are totally correct. Real estate investing success doesn’t happen overnight so if there is any mention of getting rich quick, I’d say most likely to run. And then you’re right, use the clubs to learn the terms and the vocab and then you can piece that all together and figure out what is right for you.

  2. A big reason I encourage newbies to attend their local investment groups is to learn the language. Each industry has its own, and real estate investing uses a huge vocabulary.

    Even if you never spend a dime on anything at these meetings, learning the meaning of all the terms and processes we use is invaluable. I don’t know where else you can pick up on so much in as short a time.

    That being said, don’t implement anything you learn there until you’ve researched that it’s both legal and ethical. I have heard some frightening things come out of REIA meetings…

    Thanks, Ali.

  3. Excellent points. I often explain to new investors that one of the key educational benefits from attending REIs is “OPM:” Other People’s Mistakes. A good REI will present both the advantages and disadvantages of different approaches to real estate investing, and help the new investor develop their plans in accordance with the individual’s goals and resources. I know one individual who spent so much money purchasing elaborate “asset protection” schemes from slick sales pitches that he ended up with no money to buy assets. Good REI education and networking programs also help the new investor develop a realistic perspective in contrast to the popular but misleading infomercials.

    • Ooh Jeffrey, I love the OPM! Mistakes. Ha. I’m definitely going to use that one. Yes, you are correct with everything you say as well.

      It’s like the chicken or the egg. Which ones comes first, the asset or the protection? :)

  4. Ali. Effective blog for new real estate investors. Assa private lending consultant I see many new real estate investors and private lenders confused about which club to belong to. Thanks for the post

    Lee Carney

  5. Hey Ali –

    I love my group, but I’m one of the lucky ones that has a really REIA good group. There are always some “pretenders” and some folks that are “less than ethical” in every group. So newbies especially need to be cautious about these people.

    We used to have a meeting every year where folks would get up and try to win in the group for “best deal” or “worst deal”. They would get up on stage and tell their stories. Learning from their mistakes and also their home runs was always hiliarious in addition to educational. I’m not sure why they haven’t been doing that in a while. I need to ask about that.

    Sharon

    • Oh Sharon, that sounds like an awesome thing to do! Yes, every investor I know has hilarious (probably not as hilarious at the time) stories about things gone wrong, so absolutely, total entertainment plus great lessons learned!

  6. In our CVREIA we have a no pitch policy, our speakers are there to teach our members not sell a class. Our format is:
    0. A statement by our organizer of buyer beware and statement of our speaker policies
    1. a review of local sales stats from a realtor member
    2. Deal analysis from one of our members (good deals, bad deals, first deals and old pro deals)
    3. A formal presentation from a qualified speaker who the organizers have previously heard and appreciated.

    As an “old pro” I love going to each meeting, as many of you have found out the excitement tends to wane as deals get easier and our jobs become mundane, I love the energy from the newbies who come to our meetings. It helps me remember the way it used to be for me. I also enjoy mentoring these newbies and teaching them what I know so I can pay forward what I have learned.

    I feel that joining a GOOD REI club is a great help for any investor new or old. Just pick a good one with people who have the souls of teachers, to paraphrase Dave Ramsey.

    Regarding your statement about hard sales seminars; As a confirmed seminar junkie, I have always followed the advice from Bruce Williams, the radio host, “Leave your wallet and checkbook at home, take lunch money and a legal pad and if you come away with 1 or 2 good ideas then it was worth the time”

    Lastly I would encourage all the experienced investors out there to take a few hours a month and mentor some newbie investors, we wouldn’t be where we are if it wasn’t for the “old guys” we learned from.

    Andy Teasley

  7. We have a club just outside of Toronto, Ontario that started 5 years ago with a few people in a coffee shop. Now we meet monthly and have over 50 people attend each meeting. One of the things that is stated at the beginning of every meeting is that the purpose is to “Help each person’s real estate business to grow.”

    Our goals are:
    1. Network – leverage the knowledge of like-minded people.
    2. Educate – wide range of speakers, workshops, and discussions of interest to Real Estate Investors.
    3. Support – provide peer support for Real Estate Investors to help their business grow.

    Challenge seems to be people’s commitment to using real estate investment as a means to achieve their own personal goals. And get distracted with the shiny penny syndrome – next best way to make money. Instead of focusing on a strategy and moving forward.

  8. Great article…thx! For beginners, I’d also add that when you meet someone and are trying to figure out if they are experienced or ‘legit’, ask them about their failures. I can guarantee that if they’ve been doing this for long, they’ve had a couple of deals that did not turn out as expected. Admitting (and learning from) your failures is a part of growing.

    A comment that has stuck with me forever? “Those who can’t do, teach”

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