Networking: The Secret of Successful Real Estate Investing
Most seasoned real estate investors will tell you that there’s no secret to success when investing in real estate.
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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!