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:
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.
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!
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 WhellerGreat, Good, and Ugly Mentor Requests in Real Estate Investing by Clay Huber