All Forum Posts by: Don Konipol

Quote from @Estela Legaspy:

Beginner investor here. I started with a 17dll course on facebook for women than then hustle hard to sell me a 10k + mentorship. I didn't buy it but I was sooo shocked that out of about 1000 women who joined that weekend 17 dl class which runs non stop all year (1000 women was just for that class), several women went ahead and bought the 10k course. Instead, I just plunged and bought the first property. 4 years later I have 2 LTR, 1 STR and one living flip that I'm not sure if I'll make STR, LTR or stay in it since I love the neighborhood . I'm all over the place and overwhelmed AF as I also have a w2 and I'm a solo parent. I would love mentorship but plunging in and doing something with the little money I had saved has been a great teacher. I could have spent even more on mentorship and done nothing. Eventually I would love to be generous with what I learn and help people achieve their goals which is what I love about this forum. Yall are so incredibly generous and helpful. I am a firm believer the sun shines for everyone so thank you for all you share and also thank you for bringing awareness about the pitfalls of these mentorships.

You do NOT need a mentor.  You just need a good real estate oriented accountant. 

Quote from @Shiloh Lundahl:

I think that mentors and coaches are fundamentally different.

Mentors are people that we look up to for a specific reason. they are people that we learn from based on our association or interaction with them. Sometimes our mentors don't even know that they are our mentors. Their most often not paid neither do they often have an obligation to a mentee. They live their lives in such a way, or do business in such a way, that others want to follow their lead, hoping to get similar results.

I have mentors on this website that may or may not know that they are my mentors. I have mentors in my life that may or may not know that they are my mentors. I've never asked them to be my mentor and they have never offered. I have just sought opportunities to interact with them and to be near them to learn and better myself from those interactions. 

A coaching relationship is fundamentally different. There are expectations on both sides. The coach expects to be compensated for his or her time in working with the student. The student expects to have access to the coach, according to the coaching agreement.

The student understandably expects to get better results through the coaching program than they would get if they were doing it on their own.

The frustration usually comes in when the expectations of the coach or the student are not met.

I think that there is a place for mentoring and a place for coaching. I think both can have tremendous value and I have received value from both types of relationships.

It's hard for me to understand posts on BiggerPockets that are negative towards coaching or mentoring. Help me understand what it is that I am missing here.

We are using the term mentor, because that is the term that the gurus selling their training and ongoing “relationship” use.

Let me first say I’m respectful of your opinion.  

However, I don’t understand what you don’t “understand”.  To me it’s pretty obvious.  I see a failure rate of 90% plus in some of these programs, as defined by the “student” not meeting their goals and expectations.  I see people with no capital told they don’t need any capital to succeed in whatever endeavor the mentor is selling; usually some version of flipping, which the incorrect term “wholesaling is now used.  Every successful ‘wholesaler” I know has (1) tons of experience in real estate (2) knowledge of real estate principles, law and finance, and (3) enough capital to spend $10,000 monthly on marketing.  The “students” in these programs, for the vast majority, have none and receive none of the above base requirements for a successful entry into the field. I see people without capital being encouraged to increase their credit card limits to incur  $20 -40k debt which they are told they’ll “earn back” in the first one or two deals they do.  I see people lead to believe they’re “training” to be real estate INVESTORS, when in actuality they’re being taught to perform a sales type position.  I see people without capital no experience or capital being taught to “help” desperate homeowners by tying up their property in a contract they have no way to successfully close without finding someone to pay more; costing the homeowner behind on their mortgage payments to lose valuable time that can easily lead to foreclosure; I see a program taught to students to take over a property ‘subject to”, leaving the seller unable to qualify for further mortgage financing, responsible for a loan secured by a property he no longer owns, and all held together by someone with 0 experience, limited or no capital, and no liability.  I see programs/techniques/strategies being promoted that were rendered obsolete by legislation 15 years ago and which there’s almost no chance of being able to pull off.  I see people without”mentors” who have NEVER had any success with the strategy they’re teaching or haven’t had any success in real estate at all, or have a history of failure often with multiple lawsuits and bankruptcy filings acting as “fronts” for marketing companies out of Las Vegas and Provo, Utah utilizing phone boiler room operations.  I see mentor programs having “personal real estate advisors” populated not by experienced real estate investors but by salespeople for these programs that didn’t make the grade as a salesperson, reading from prepared scripts being passed as individual advice.  

so, not ALL these programs are this negative.  There are some solid ones being offered.  But my experience and perception is that the majority of the programs out there contain many of the negative attributes I mentioned.  

Quote from @Chris Seveney:

Quote from @Alejandro Galaviz:

Quote from @Don Konipol:

There has always been many questions as to if one needs to be licensed to engage in COMMERCIAL mortgage brokering/origination or RESIDENTIAL INVESTMENT property mortgages.  Here is a list of states divided into three categories, based on my internet research.  If you have any corrections to make please let us know. 

States which DO NOT require licensing for originating or negotiating a loan secured by commercial real estate nor a loan secured by non owner occupied residential real estate

ALASKA 

ARKANSAS 

COLORADO 

CONNECTICUT 

DC

DELAWARE 

FLORIDA 

GEORGIA

HAWAII

IOWA

INDIANA

KANSAS 

KENTUCKY 

INDIANA

KANSAS 
LOUISIANA

MASS

MARYLAND 

MAINE

MISSOURI 

MISSISSIPPI 

MONTANA

NORTH CAROLINA 

NEBRASKA

NEW HAMPSHIRE 

NEW MEXICO 

OHIO

OKLAHOMA 

PENNSYLVANIA 

RHODE ISLAND 

SOUTH CAROLINA 

TENNESSEE 

TEXAS 

WASHINGTON 

WISCONSIN

WEST VIRGINIA

States which DO NOT require licensing for originating or negotiating a loan secured by commercial real estate but DO require licensing for a loan secured by non owner occupied residential real estate

IDAHO 

MINNESOTA 

OREGON 

UTAH 

VIRGINIA

States that DO require licensing for both residential and commercial real estate loan origination and brokering

ARIZONA

CALIFORNIA

ILLINOIS 

MICHIGAN

NEW YORK 

NORTH DAKOTA 

NEW JERSEY 

NEVADA

SOUTH DAKOTA

 Does this still hold true for 2025?

 THis is constantly changing and best to stay in tune with your attorney in that state and follow groups like Hornek and Geraci

Right Chris.  If anyone can update or confirm any particular state in regard to my original post, please respond with the source so we can maintain an updated list. 

Quote from @Dan Deppen:

I do something similar. My PERMANENT portfolio is my SDIRA; I try to buy more solid performing notes that I won't need to work on (although they haven't all panned out that way...). In my LLC I buy more sub-performing and non-performing notes with investor money, that's my version of the VARIABLE portfolio. That side of my portfolio is most definitely a business and not passive at all.

While the note investing world is a small niche, within that world is a wide range of different investment types. You can have 2 different "note investing" models that are entirely different sports.

I think that’s very similar to what we do.  

The general public thinks of “notes” as a passive investment collecting interest every month until maturity.  And yes, that’s half the type.
They miss the other half, which is not only active investing, but in many ways mirrors equity investing more than traditional debt investing. Especially since we try to obtain “equity like” returns on these higher risk, more active note investments.  

As you alluded to, sometimes a passive note investment purchased for monthly payments “goes south”, and becomes an active participation investment, with plenty of additional capital required for legal fees, forced place insurance, and property taxes. 

Quote from @Chris Seveney:

Quote from @Don Konipol:

Permanent vs variable portfolio.  IKnow, I know, NOTHING’S permanent.  But, for practicality, I divide my portfolio of notes into two distinct portfolios.  My PERMANENT PORTFOLIO consists of notes and my participation in note syndications that are held for income, collect interest on a continuing basis, and (hopefully) get paid off at maturity without any “drama”.  In other words held for steady cash flow.

My VARIABLE (note) PORTFOLIO consists of more active/speculative notes - non performing notes I purchased at discount to principal owed; notes I hope to "work" for enhanced ROI, real property I "purchased" with a leaseback option to repurchase, and defaulted notes I purchased planning on eventually taking ownership of the real estate, as well as notes I created that don't have current payments but provide a guaranteed return plus an equity "kicker" when the property is sold.

Seems to me my “permanent note portfolio is basically a passive investment, while my variable note portfolio is somewhere between business and investment.  

Wondering is 

1- Anyone else thinks of their portfolio in a similar way

2- Anyone else see advantages (or disadvantages) of “dividing” your note portfolio into these two different arenas

3- Anyone else distinguish between “passive” investing, “active” investing, the investing “business”. 

Please share your thoughts

 We have to go through an SEC audit so we have multiple categories forced upon us. So we have held to maturity and held for sale. What is interesting is our held for sale are the longer term notes as we do not plan to hold them for 10+ years. These are typically our non performers. These are active.

Then we have held to maturity are our shorter term loans which provide us direct cashflow for us. These are "passive"

I also own real estate as well but always put it under a PM so I will say that is quasi passive. But yes we do bifurcate our portfolio and manage it to make sure it’s well balanced as well and not teetering too far one way or the other.

Chris, I never knew about SEC audit. Can you explain further?

@Jay Hinrichs and @Stuart Udis

Both of you have provided great advice.  Maybe a few people contemplating spending their money and time on one of these ridiculous mentorships will heed your advice 

Why signing up for a “mentorship” is usually fundamentally wrong? 

Because, 98% of the time the student does not take into consideration if the tactic/technique/strategy being taught is a “fit” for the investors time available; interests; knowledge; experiences; abilities; likes; and ethics.

Let’s assume that the strategy being taught really does work - to the extent that many people “applying” themselves can achieve financial success.  And let’s assume that the requirements are going door to door and convincing “motivated” homeowners to sign a contract with you selling their property below “market” rate.  Well, 90% of the population don’t want to be salespeople, don’t “like” the selling process, and wouldn’t consider a job in sales.  Why then do they pay $35,000 to obtain what’s basically a sales position?  Because of (1) some fantasy that they are now real estate investors”? (2) some fantasy that they’re now “their own boss”.  (3) the belief that they “have” to do this to “get into” real estate? 

I was approached by a young man recently who was contemplating doing exactly this. I told him if this interested him he would be better off obtaining a license and joining a brokerage.  He told me he didn’t want to be a salesman.  What do he think wholesaling is? 

I can see where, IF a particular strategy being taught is a ‘fit” it could be advantageous. But my personal experience tells me that this usually won’t be found in a national program run by the real estate marketing boys out of Las Vegas or Provo, Utah.  It more likely may be found with a local investor/teacher doing “hands on” mentoring himself and not through an organization run like a production line. 

What do you think? 

Quote from @Grace Tapfuma:

As I continue to study real estate! I've realized that I'm not looking to start another full-time career. Although, I am very interested in learning about real estate full time but not willing to make it a business. My goal is to achieve financial freedom by age 36 and to understand various aspects such as investing education, strategies, business planning, properties, marketing, and exit strategies. I want to (willing to) learn everything I can but I do not want to start a new career but I 100% want to be in real estate!

Could you share some avenues I can explore that align with this approach?

There are lots of good responses to your questions posted on this thread.  Shows how many BP posters are willing to share experiences and knowledge - especially when the questioner asks “nicely”, LOL. We see too many posters turn angry when they don’t receive the answer they want…….

Here’s my bottom line.  To be successful as a real estate investor in any form - except maybe purchasing the Vanguard REIT index fund - an investor needs education, knowledge and understanding of real estate principles, real estate law, and real estate finance.  In the 4 states I hold/held broker licenses, all required this knowledge (in BASIC form) for licensure, so the required educational courses should provide a decent foundation.  Alternatives are college courses, textbooks, and engagement through web searches. 

Quote from @Brittany Olson:

Hi! I am thinking of paying for the Gator Method program through Pace Morby, who I recently saw at the Aspire Conference in Charlotte. Has anyone tried it and had success? If so- what would you rate your work effort (not afraid of work), and the time to close a first deal? I'm making some pretty big moves right now and changing my business plan in a new direction, so I don't want to die of shiny object syndrome, but this method really speaks to me.

@Stuart Udis has hit the nail on the head.  If you don’t comprehend what he’s saying (you Brittany obviously get it) you have no business being an investor.  It pays to know when to just hire an independent financial advisor and do what you do best.

In my 45 years as an active investor across real estate, businesses, commodities, and almost everything else I’ve developed a few “rules” that I believe should never be violated 

1. To have a chance for success in any particular investment type, the investor needs to understand the fundamentals related to that type of investment.  In real estate that means real estate principles, finance and law. 

2. NOBODY cares as much about your money as you do 

3. Many investments that seem to promise higher than market returns do so because of higher than market risk. It’s the risk ADJUSTED return that’s key.  If you don’t fully understand this you’ve got more education necessary before becoming an investor.

4. Direct participation, active investing, extensive time commitment, etc. are NOT the only way to successfully invest. For example, index funds could be a no brainer for investing in the stock market. In 2009 I determined the best ROI I could obtain with the least time spent and lowest risk wasn't direct investing; I merely purchased REIT mutual funds, and tripled my money over the next 5 years.

5. For 99% of the people, for 99% of the time “mentorship’s” are either worthless or actually detrimental to investing success. 

 Bonus rule:  this applies to any investment or business that even HINTS at being a scam, below board, or ethically questionable - If you don’t know who the “sucker” is, it’s YOU. 

Quote from @Ken M.:

The report is that prices are dropping rather substantially in Washington D.C. related to layoffs.

Article:
In November, the median home in the nation's capital was worth $699,000, according to Redfin.

By February, the median home value dropped 20 percent, bringing the price down to $560,000.

TKL found there are now nearly 8,000 homes listed for sale in the Washington, DC metro area, and almost half of them have been put on the market in the last 30 days.

The tax-collecting Internal Revenue Service is preparing to fire thousands of workers next week"

***************************************************************************

Comment: 

Save The IRS  - said no one, ever

In the last year of our marriage my ex wife spent $150,000 on clothes. The first year after our divorce she still spent $100k on cloths and added another $60k on cosmetic surgery.  She then met with her financial advisor, and immediately called me to complain that her future lifestyle was going to be “compromised” by the terms of our divorce. 
The bloated and wholly out of control Fed is long overdue for a “correction”.  If this severely impacts real estate prices all the better.  Maybe Trump’s initiative will not be successful, or nearly as successful as he wishes.  But IF it is, and if an investor built his holdings on government largesse, it may be time to reevaluate their portfolio. I sold the one 3N property I had that was occupied by a Government agency where the lease was up in 2026 when I read the Republican agenda for 2025.  
As a masters degree project 50 years ago I analyzed the Detroit real estate market in 1974.  Since then prices have fallen 95% in inflation adjusted terms. And nobody in the Washington elite gave a s__t.  Now that it’s hit home the entrenched deep state is in alarm.  As property investors we need to understand and adjust to the mega trends.  Don’t think people who bought homes 20 years ago in areas where the value of their home hasn’t risen will have much sympathy for people who are losing a small part of their 200% price gain on their ho,e purchase of 4 years ago.