In this show, we’re pulling another fistful of questions from our bursting email grab bag. This is a two-part session of Ask The Guys … if you missed the previous round, you can check it out here!
In this episode, we’ll take on great topics, including how to …
- get started
- find mentors
- structure syndication deals
- survive a crash
- get into deal flow
- and build credibility
Before you dive in, please take note of our standard disclaimer … we are not tax professionals or attorneys. This show does not contain advice, only ideas and information.
Ready to get started? In this edition of The Real Estate Guys™ show you’ll hear from:
- Your informational host, Robert Helms
- His info-maniac co-host, Russell Gray
Broadcasting since 1997 with over 300 episodes on iTunes!
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Question: Where does the beginner begin?
Steve, from Laguna Niguel, California is a fledgling investor. And like many newbies who’ve just dipped their toes into the vast ocean of real estate investing, he’s not sure where to start.
Steve asked us, “How do I turn what little knowledge I have into action? There’s so much information available, I’m afraid I might become an analytical quadriplegic trying to find reliable and trustworthy information.”
Before we offer any ideas, we want to offer Steve a big congratulations on taking the first step of getting himself educated on what is arguably the single greatest investment vehicle. (We’re talking about real estate, obviously!)
A new investor’s basic education should be two-fold:
- Educating yourself on what kind of opportunities are available and what kind of investor you want to be (that means developing your personal investment philosophy).
- Forming relationships with other investors who are doing the kind of things you can see yourself doing.
To begin, we recommend listening to past episodes of our podcast and listening to other investment podcasts, as well as reading books. This step is largely free and will help you understand the rules of the road and the language of the business.
THEN, before you get overwhelmed by the nuances of all that education, leverage what you’ve learned by attending real events with successful people who will help you understand how real estate investing works in the real world.
When considering which events to go to, keep in mind this wisdom … “People who aren’t invested won’t make the investment.”
If you’re only attending free events, you probably won’t be meeting the most successful people or getting the most helpful advice. You have to be willing to pay to put yourself in inspiring social environments.
Once you get some basic education, you need to take action. Education without action is essentially useless.
Start by assembling a team of professionals. At the bare minimum, you’ll need a mortgage consultant and a tax advisor.
And don’t just pick the cheapest option. Be strategic in your choices by looking for people who can help you expand your social networks.
Every relationship is a gateway to a whole host of other relationships.
As you go through the process of getting started, don’t be afraid to ask questions. Learn how to ask great questions, and you’ll find that deals will come to you!
Question: Should I join an investment mentoring program?
Another California resident, Diane, told us that she attended a FortuneBuilders seminar and was psyched about it. Now she’s wondering whether she should join their mentoring program.
We’ll start by saying that we don’t endorse any specific program. Almost every real estate coaching program out there can teach you valid, useful skills and introduce you to great people.
But what success in these programs really comes down to is you.
That’s right, you have to make the program work for you for it to be successful. That might mean kissing a lot of frogs.
We also want to clarify the difference between theoretical information and real world information.
In the world we live in, most employed and self-employed people are taught we need to know how to DO something to find success … and the better you are at that specific thing, the more dollars you can trade your time for.
This can lead to new investors consuming a lot of specific information that they might not really need. We want you to get out of that mindset.
Look for courses and programs that help you learn to build a team, create a basic investment philosophy, and practice your conversational skills … all skills you’ll actually need when you start investing.
Also make sure whatever program you choose teaches independent investing, not dependent investing. You need to build your own ability to be a successful investor … not others’.
Make sure any education you invest in leads to you DOING something with your newfound skills and info.
Question: I’m a syndicator. How much equity do I give back to investors?
Kevin, our third Californian listener of the day, asked us what to do in a specific syndication scenario. He’s splitting his deal 50/50 between the investors and himself, and wants to know whether he should also return a piece of the equity to investors when he refinances the deal and returns profits.
The reality, Kevin, is that the percentages completely depend on the deal.
If you and investors are both putting money in, obviously you’ll split the return in some way.
Ultimately, the way you structure a deal should satisfy the needs and the desires of everyone who is at the table (including you!).
There are a lot of variables that will affect the specific structure you choose … what you’re trying to deliver in terms of taxation, whether clients want their original equity back, what you and investors are looking for in terms of future opportunities, and more.
You have to think through all the possible permutations of the deal.
We’d caution you not to get caught up in a specific number. Instead, ask the important questions of who is doing the work, what will happen with your investment, and when will those changes take place?
Then structure your deal accordingly. Every deal will be different.
P.S. Check out our last edition of Ask The Guys to hear us answer a very similar question.
Question: Can you guys refer me to contacts?
Steven, from South Lake, Texas wanted to know whether we could refer him to contacts that are currently putting together syndicated multi-family apartment deals.
We don’t like to fashion ourselves as matchmakers. That’s not our job.
So our first recommendation would be that Steven and people like him come to our events and get around people who are familiar with the syndication world.
Making contacts at real world is your best bet for finding syndication deals.
However, we do want to make all our listeners aware of our investor registry. Because we’ve been in the real estate world for a long time, we have a lot of great contacts. This registry allows those contacts to connect with investors interested in specific deals.
Signing up is simple and easy … and your first year is on us! Sign up here.
Question: Do you sell recordings from the Investor Summit at Sea™?
The short answer is no.
The long answer is that you have to join us at the Summit to access the valuable information we provide there. The Summit creates a certain camaraderie that simply can’t be transmitted electronically.
However, we did record some livestream sessions this last Summit in partnership with Rich Dad Poor Dad Coaching … if you really want to get your hands on live material from the Summit, this would be your only avenue.
We do not personally use recordings from the Summit in any commercial capacity.
Question: How do I prepare myself for potential unrest in the United States?
Phillip lives in Southern California. He asked us specifically what the best place to live would be if America were to enter into a second, violent Civil War.
While we can’t state with any certainty that the U.S. has another Civil War in its future, we will say that many of our faculty members believe it’s very possible we’re heading for some big-time trouble in the future of our nation.
The reality is that economic cycles of boom and bust are baked into our economic system. And economic distress can mean unrest in certain places.
The threat of the unknown will always be present.
However, while a sudden recession can mean devastation for one person … it can spell opportunity for another.
How does the same environment produce such drastically opposite results? The difference is preparation.
We recommend you read Prosper!, a book on how to curb your vulnerability to frightening trends in our economy by our smart and prudent friends Chris Martenson and Adam Taggart.
And if you’re looking to situate yourself in a place that will be resistant to the effects of an economic downturn, we think it would be smart to look for areas where people aren’t highly reliant on government and supply chain infrastructure.
It’s wise to be concerned … but that doesn’t mean the answer is to hide in a bunker. Be prepared to bridge the gap between our current reality and new and unexpected possibilities. And don’t forget the wise and true words of Chris Martenson… “Humans rise.”
Question: I have a burning passion for real estate … and no money. How do I gain credibility with sophisticated investors so I can partner up or syndicate?
We love this question from Sam, a new investor and social work student in Brooklyn, New York.
Sam is passionate enough about investing that he’s read literally dozens of books on the subject. He knows that relationships are key to making good deals … and he also knows that he’s starting out without any connections.
We’d tell Sam that when you change anything in your life, you’re being recognized for your past, but what you can do in the future is uncertain.
So you have to create your future by acting like the person you want to become.
Russ had to go through this process when he started out in real estate investing. Like Sam, his background was in a different field. He took a few steps:
- He realized that his current connections weren’t the best prospects for getting better in his new field.
- He started to act like the person he wanted to be, projecting himself as a successful real estate investor.
- He changed who he was associating with by putting himself in new environments where he could make new relationships.
The key is to “Be who you’re becoming.”
When you’re establishing yourself as the person you want to be, lean on the credibility of those who’ve already found success.
Passion and enthusiasm are key. A great deal (and we mean great) will also help tremendously.
Our last words of wisdom? Don’t be the smartest, poorest investor. Take action.
Now, go out and make some equity happen!
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