If I could go back and coach myself on what to do starting off, this is what I would do first…
Get a Mentor
Finding a real estate mentor is the best thing you can do because it decreases the number of mistakes you’ll make as a newbie.
Having a seasoned investor to bounce comps with, ask advice, and grow with is something that I believe is the most crucial step in becoming a real estate investor and I’ve met very few successful, long-term real estate investors who have made it without one.
Now restate investors are extremely busy people, and if you want to grab their attention, there is a right way and wrong way to go about it. So here are a few tips…
How to Find A Seasoned Real Estate Investor
Sometimes people experience difficulty finding a seasoned investor in their area. My suggestion would be to start with the BiggerPockets keyword alerts and reach out to local investors that way.
I would also recommend attending your local Real Estate Investors Association (REIA) meetings because lot of investors hang out there.
If that doesn’t work, if you access to the Multiple Listing Service (MLS), you can do a search for cash-buyers who have bought in your area over the last six months and then reach out to them that way.
Beyond that, Meetup.com is also another way to get connected to other investors in your market by joining real estate investing real estate groups.
Once your potential mentor is found, invite them out for coffee or for lunch.
Don’t Ask to Be Mentored
Though I have a had a few people who started off this way with me turn out OK, the vast majority of people who ask me to mentor them within the first time of meeting typically were a waste of my time.
My first suggestion would be to take it slow. You need to make sure the both of you fit well together and will mutually benefit from the relationship.
In your first meeting, I would ask these questions:
- What are your core values?
- What are some things you’re passionate about in life?
- What kind of investing do you do, and how do you do it?
- What would be your suggestions for me, as a complete beginner?
- Do you partner on deals on a case-by-case basis?
Once you’re sitting down with the potential mentor, don’t play games. Tell them the absolute truth. Say, “I am a brand new aspiring real estate investor who doesn’t know much, but I am hungry and willing to learn. I just need a little guidance.”
Then let them know you’ve already taken action and found a few properties that you think might be good deals, and show them the numbers you ran. Then say that since you’re new, you want them to review the leads and help determine if they are, in fact, good deals or not.
Ask them if they’d be open to helping you analyze leads you bring them, and then if ever one is a good deal, if they’d help you close it for a 60/40 split (where they get 60% and you get 40% of the net profit).
Discover Their Needs
Next, I’d seek out to discover what their business is lacking. Your communication needs to come across as simply wanting to help and learn.
If they’re struggling with social media, suggest running social media for them. If they’re a one man show, help out with motivated seller calls. Offer to run errands, clean their office, write purchase agreements and perform any additional legwork needed close the deal.
Whatever it is for their specific situation, once you’ve found it through asking strategic questions, offer ways that you may be able to step in and help.
If you do this, the more value you bring and the more your mentor will help you out.
Bring Them Deals
As you help them in their business, be aggressive at finding deals because you’re now in a position where you can call on the advice of a seasoned investor.
Run you own comps and number and simply ask your potential mentor to check them for you and if the numbers look good, ask them if they would like to partner with you on that particular deal.
You can say, “What would you suggest I do? Would you like to go in on this one with me? You can take 50 percent if you finance it and walk me through all the steps involved.”
If the investor agrees, boom — you just found yourself a real estate mentor.
Without money and expertise, serving and adding value is really the only leverage you have starting out, so use it wisely!
Take Action!
The goal is to GET THE PHONE RINGING! And the only way to do that is by taking action!
A lot of people don’t take action. They read book after book. They read blog posts after blog posts. They listen to podcast after podcast, and they eventually end up overwhelmed with all of the information that is out there about real estate investing.
I promise, you will learn far more by taking action and making mistakes than you ever will by reading a book.
Don’t be afraid! Go after it! Make the mistakes, and sooner than later, you will actually do things right.
How to Get the Phone Ringing!
Now that you’ve found a mentor, put your foot to the pavement and start generating deals! Here are my top deal generators that will help you close your first deal!
Driving For Dollars
Honestly, the cheapest way to find motivated sellers is by driving for dollars. You can simply jump in your car, drive around the city and look for distressed properties.
As you’re driving, look for properties with tall grass, boarded up windows, peeling paint, etc. and then write down the addresses of those properties.
Once you have the address, head over to the tax assessor’s website, enter in the address and find the owner of the property.
Once you have the owner’s name, you can search for their contact information using a skip-trace software called TLO.
This strategy is free and literally costs you the gas in your car and your time!
Networking with “Mentors,” Investors or Agents
Real estate is all about relationship!
You know, a lot of times it’s not what you know, it’s who you know.
Attending networking events allows you to connect with people in your market who are really taking action and doing “the stuff”.
Just think about it, if you know the top fix and flippers, the top buy-and-hold investors, and the top wholesalers in your market, you are ultimately setting yourself up for success because many times, they’ll have inventory but not the time so they’ll sell it for super cheap just to get off their hands.
So, networking is essential, and is a great way to generate deals!
Bandit Signs
Place bandit signs in high traffic areas and busy intersections. Keep your signs simple and straight to the point. Our bandit signs simply say:
“We buy houses cash!”
Insert Phone Number
We spend $.50 to $1.00 per sign and we have our property manager place the signs out. Our property manager makes a percentage if a deal comes from a bandit sign.
Direct Mail
There’s this concept called the 80/20 Rule where 80% of your results come from 20% of your effort.
Direct mail marketing is targeting a list of potential motivated sellers by using specific information from age, zip code, income level, etc., then you hire a company to send out letters or postcards to individuals on that list.
This is a very effective way to find motivated sellers but it comes with a high cost.
Right now we’re spending an upwards of $10,000 a month on direct mail campaigns as a company, but we’re averaging between 10 to 12 properties a month, so it justifies it.
Say you average $6,500 property, you can see why spending $10,000 a month makes sense for us but it doesn’t happen overnight.
We drop $10,000 a month in direct mail campaigns and have two full-time acquisition managers dedicated to screening calls servicing the leads that come in. So instead of us going after and chasing the motivated sellers, through our direct mail campaign, the motivated sellers come directly to us.
Guys, I know these numbers might seem a bit daunting but don’t let these numbers discourage you. It will take some time to get to that level but don’t be afraid to pick up a side hustle because direct mail is your best bet for streamlining deal flow.
Conclusion
If you want to be successful in this business, first find a mentor, bring value to your mentor, take action and generate deals. In that order!
The key is taking action and to learn by doing!
If you follow these simple steps, you’ll close your first deal in no time.
Read in next week to learn how to close your first deal and get paid!
