Why Coaches Charge Money and Mentors Don't

[Shiloh Lundahl]

I read a lot on BiggerPockets about coaching or coaches and people looking for mentors to teach them how to invest. I read both the positive and the negative things that are stated so I wanted to give some perspective that may help newer investors more context to help them understand some differences between coaching and mentoring and why coaches charge to teach. 

First off, coaches and mentors are different and have different roles. So if someone charges you for a mentorship program then you know that it is a scam. Let me explain why. A mentor has no responsibility to teach someone anything. A mentor teaches through living his or her life. Lessons from a mentor are often not taught, they are caught. Mentors are people that you learn from through proximity and relationships. As you patiently observe their actions and then are privy to the results, you learn from their both their successes and failures. But they are under no obligation to teach you unless they have a duel role such as father or mother.  Positive mentors are people you look up to and want to emulate because you respect who they are or what they do.

Coaching is different. Coaching is a job with expectations. A coach is responsible to teach an athlete or a student a specific task or procedure. And the person being coached is expected to practice the thing that is being taught in order to improve performance. A coach may not be respectable and may not live a life that the student wants to emulate, however, the coach does have a talent or knowledge that the student wants so the student is willing to listen and learn and then perform and then get feedback to improve performance. A coach charges for their time and efforts in disseminating the knowledge they have or demonstrating the steps of a skill and for providing feedback from what they observe.

The effectiveness of a coach is based on the information that the coach teaches and the way that the coach teaches it. The intent of a coach is for the one being coached to produce better results than they would produce without a coach.  A student or athlete may be highly coachable, meaning that they are willing to listen to the coach, practice what the coach teaches, and then get feedback from the coach and then practice again to continually improve performance. Some students are not very coachable and when the coach shares with them what to do or how to do it in order to improve performance, the athlete or student disagrees with the coach and decides to perform the task in a way that is more preferable to the athlete or student regardless of whether it differs from what the coach is teaching. If the student or athlete proves to be uncoachable and struggles with feedback, that may violate the agreement between the coach and the student or athlete and either the coach or student may decide to terminate the coaching relationship. 

I share this information because there are many people on BiggerPockets who have had success investing in real estate and they have started to offer paid coaching to newer investors.  Some people on BiggerPockets share that getting coaching from a good coach can be really beneficial while others give their opinions against paid coaching and one of the more often repeated criticisms they give has to do with what coaches charge for coaching. 

I would like to respond a little to the criticism that coaches on BiggerPockets get for charging for their services.  I think many coaches, myself included, have offered free coaching services. But because there isn't a firm contract with defined expectations and an exchange of value, the person being coached looks at the coach more like a mentor and may not feel a need to make any changes in what they are doing. So the results of the person being coached the majority of the time are low to non-existent.  Here is an example, I spent an hour or so drafting a comment to post on a BiggerPockets thread from someone who, according to him, has been on BiggerPockets for a long time but had never taken action. The post was a lot about mindset, taking responsibility, and taking action.  The post was direct in pointing out the individual's inaction and the post was based on psychological principles of the stages of change that I often tap into as a licensed therapist. The response that I got was basically that I wasted my time with the comment that I posted and that I obviously didn't understand his situation. It appears that nothing was taken from the post and reflected upon by the person who asked for guidance on investing in his original post. The hour that I spent drafting and editing the comment would have been charged at $400 to a coaching student. But because there was no contract or value exchanged for the value given, the time and the coaching went to waste. 

I have heard from coaches repeatedly that this is the reason why they charge for their coaching services. Because when they offer the same value that they give, by teach from their experience, to a non-paying student as they give to a paying student, the non-paying student overlooks the wisdom in their teaching and doesn't appreciate the value. In other words, they are not ready to learn. But the individual who pays for their coaching is providing evidence that they are ready to learn. 

What has your experience been as a coach or as someone who has been coached?

[Jay Hinrichs]

Its like any other consulting gig.. you either pay for it and try to figure out if the coach is worth the money or not. RE is unique in this way as you have a lot of folks that have very unrealistic expectations of how well folks can do in RE by just being in RE. 

its not different than hiring a good lawyer or doctor or mental health professional to help guide you. 

BP being a big friendly Tent of investors and by Tent I mean all different locations of the country wide variety of backgrounds very different financial situations when trying to get into RE so many think they can just save the money and find a mentor and while that can happen I would say most successful RE folks simply do not have the time to put hours into mentoring with no financial reward especially just meeting them here in BP .. A lot of the more experienced folks I am sure get PM from folks seeking a mentor I know I do. Or if they are local Hey I want to buy you lunch and pick your brain type invitations.. so really depends on the individual. I can see the mentoring working for those that are looking for distressed assets and take a few minutes to mentor folks to bring you deals cheap way to line up bird dogs. But that wont last burn out factor in RE is huge. 

Coaching as in paid training will have a play sheet and written content and go through steps that worked for the coach or are known in the industry then taught some folks need to be taught others are fine reading and watching u tubes etc. 

Boils down to though RE is a very difficult business to break into if you have not a lot of business and RE knowledge and have very little to minimal capital.