Follow Us on Social Media

email icon rss icon linked.in icon google plus icon twitter icon facebook icon

Great, Good, and Ugly Mentor Requests in Real Estate Investing

by Clay Huber on June 7, 2013 · 10 comments

  
Coffee

A few days ago, I got an email from a local real estate wholesaler offering me a property. I passed on the property, but after that followed a pleasant exchange of emails. Looking back on the conversation now, it really presents us with some very interesting and important talking points.

After I had declined the wholesale property, the investor sent me the following email:

Convo1This email exchange presents us with two extremely important talking points. One of “what” to do, the other of “what not” to do.

The Good – Offering Value in Return for Guidance/Mentorship in Real Estate Investing

This investor is looking for some guidance and mentorship. Good for them and a smart move on their part. With that being said, they structured their proposal in a very appropriate way.

Let’s first take a look at the an inappropriate way to approach this same situation (for me at least).

Investor Seeking Guidance: I’d like to take you out for a cup of coffee (lunch) and enhance my knowledge.

Call me mean, a jerk, Mr. Scrooge, or whatever other unflattering adjective you can think of, but this is NOT going to work with me. While I do appreciate the “offer of value” being a cup of coffee or lunch, it’s actually not a value, rather it is a cost.  Economics 101 states there is no such thing as a free lunch (or coffee), meaning, there is always an opportunity cost associated with everything. In this case, the massive opportunity cost is my time, the one thing you can not increase or decrease. There is 24 hours in a day and there is nothing you can do to change it, you can only manage it.

The appropriate way to approach me (and the majority of investors) is to do what this investor did: How can I help you achieve your goals and enhance my knowledge?

Making their “off of value” something that benefits my business is the complete opposite of what the “cup-of-coffee” approach is. So for this, I say, “well done Mr. Investor!”

The Ugly – They Used the ‘F-Word’ of Real Estate Investing!

Hurry! Someone go grab some soap! This investor needs their mouth washed out after using the ‘F-Word’. I’ve already written an entire article on this point which you can read here, so I’ll keep this talking point brief.

The ‘F-Word’ is “fast”. As you can see, this investor wants to “make this work on a larger scale fast”. While the ambition and desire is nothing to be scoffed at, there is NOTHING fast about building a real estate investing operation. This is a point that has been driven home time and time again. Whether on the Podcast, blog articles or the forums, the one common theme among the investors who have build up a business is this: it takes time!

Hopping back into the email exchange, I told the investor that the best way they can help me achieve my goals is to bring quality wholesale deals. I will purchase them from him and as we do business like this together, I’d be more then happy to show him how I operate things.

Convo2

The Great – Accomplishing Your Goals as a Real Estate Investor and Staying Motivated

Come to find out, this investor has already done three wholesale deals! Given they started on March 9th, 2013 and this email exchange took place on June 4th, 2013, I’d say that is pretty darn good! Scoring $13,000 in profit over three deals in basically three months is a great way to get going.

I know many people start out wanting to wholesale, but don’t last very long because they figure out quickly how hard it actually is. So once again, “Well done Mr. Investor!”

The last sentence in his email is a great reminder to all real estate investors. New or veteran alike, we all need to be “hungry” for more deals and success. Without a desire and motivation, our business will not grow and prosper, so as basic as that last sentence in the email is, it is extremely important!

Final Thoughts

We call can learn a lot from this investor and this email conversation. Always remember to present value to the person you are making a proposal to. Fellow investor, private money lender, contractor, etc. It doesn’t matter ‘who’, you just need to make sure to offer some sort of value that makes sense to them.

Everything takes time. There is no magic blue pill that you can swallow in order to speed up the growth of your real estate investing business. You must take one deal at a time, and build from there. Remember, there is no rush. People are always going to need a place to live, and therefore, the real estate market is not going anywhere.

Stay hungry! Whether it is three deals or three hundred deals, the success of anything we do in life or real estate is going to be a function of the desire and passion behind it. Don’t sit back and get lazy because you have done a few deals! Always be setting new goals so you have something to strive towards.

Now get out there!

Photo: Doug Wheller

Email *
  



{ 10 comments… read them below or add one }

Junior June 7, 2013 at 9:05 am

Great post, Clay!!
I’m a pretty new wholesaler myself and this really shows me what NOT to do even though I’m not trying to make fast of this. I have a full-time job and know what needs to be done, but I am hungry as well! Insightful post nonetheless!

Reply

Clay Huber June 7, 2013 at 10:39 am

Thanks for the comment.

I think starting out with a full time job is smart. That way, you have money coming in and don’t have to worry about feeling the “pressure” of “needing money” which is the case if you don’t have another job.

Reply

Brandon Turner June 7, 2013 at 9:50 am

Great post, Clay!

Reply

Clay Huber June 7, 2013 at 10:41 am

Thanks a lot Brandon!

Reply

Ryan Thomas June 7, 2013 at 9:52 am

Great post Clay.

Iv’e been an agent for a few years and have been wanting to jump into investing. A friend asked if I wanted to come work for her boss who is a builder/investor. Originally, he wanted me to put in like 100 offers a week on short sales, and door knock pre-foreclosures with him.

Well, while pulling LPs at the courts, we were introduced to a wholesaler (I didn’t even know what that was at the time), he began working for this investor, and i continued doing marketing, placing offers, door knocking, etc…

Then, after a while, the wholesaler started teaching me little by little what he does (running title, drive for dollars, who he targets). I finally saw them close on a house for like $70K with ARV of like $400K, so I realized this actually works, and how profitable it is.

For one reason or another, things didn’t end up working out for me with them, but after basically working for free for 4-5 months (adding value for them), I learned a TON of things that I never knew or considered before, and they will be potential buyers for any deals that I find now.

Without willing to work for free and provide them with value (organizing, marketing, etc..) I never would have learned what I have.

Reply

Clay Huber June 7, 2013 at 10:46 am

That’s awesome Ryan! Thanks for sharing a ‘real life’ example that proves my point perfectly.

I would argue this though (just because I love to argue ;-) ), but you did NOT work for free. You worked for ‘knowledge’, which, in the long run, is truly priceless.

Reply

Joshua Dorkin June 7, 2013 at 11:04 am

Well put, Clay. I love the simple analysis, as I believe this will certainly help out any new investor who takes the time to read it.

Reply

Clay June 7, 2013 at 11:14 am

Thanks Josh. For a simpleton such as myself, I love the KISS method. (keep-it-simple-stupid)

Reply

Melodee Lucido June 7, 2013 at 9:15 pm

Clay, you consistently write articles I like but this one is my fav (at least for now).

This should be enlarged and printed by every newer investor and hung, taped or nailed to their wall, car dashboard and refrig.

This is awesome advice and well put. If people would really take this to heart (memorize) I bet there would be a LOT more successful investors and less downhearted wishful thinkers.

Thank you for this Clay—-a brite spot in my day of talking to unrealistic sellers (and buyers).

Best to you : >

Reply

Clay June 8, 2013 at 7:40 am

Thanks Melodee. I will try my best next week to write an article that becomes your new favorite!

Reply

Leave a Comment

Comment Policy:

• Use your real name and only your name in the field designated for your name.
• No keywords allowed as anchor text in the name or comment fields.
• No signature links allowed under your comments
• You may use links in the body of your comment, but it must be relevant to the discussion at hand, and not merely be some promotional link.
• We will have NO reservations about deleting your content if we feel you are posting merely to get a link without adding value to our discussion.
If you add value, but still post keywords, we'll use your comment, but remove your link and keywords.
• For more information about acceptable practice, see our site rules.

Want your photo to appear next to your comments? Set up your Gravatar today.

Previous post:

Next post: