In the last couple weeks, I’ve had numerous people tell me they went to real estate seminars and paid for courses that came off useful at first, but ended up coming off like a watering hose of information that they ultimately can’t do anything with…And of course, the seminar speakers are professionally trained to make it all sound like a “walk in the park”, but they forget to mention these 5 key facts that I had to learn the hard way.
1. You better learn how to budget well
If you leave your job on just the proceeds of 1 flip, you better plan how you spend the proceeds to create residuals well, or how you’re going to use those proceeds to multiply that money. Because you are no longer working in an hourly-based bi-weekly pay arena, you are working on an effort & multiplication-based pay cycle.
2. Doing 1 flip a year is not enough to cover living expenses, and guess what-even if you do 3-5 flips a year…Now you have a new thing to think about-what should I do when I have 3-6 months of those flips not being sold? Which leads me to the next 2 points…
3. For your payouts, you should be putting away 20-50% for rainy months between you & your business. 20% for your personal pocket, and as high as 50% for your business, because real estate is inherently cyclical in nature. Certain seasons of the year are better for selling, and the remaining seasons are better for buying…Which is a perfect transition to:
4. Buy right. If you buy right, that means that even if you haven’t sold a property yet…You have enough equity to refinance the property, or rent it until it does sell. Basically, having multiple exit strategies.
5. Network like a maniac-All of the issues above are more easily handled if you have the right team behind you.
For example, I now have numerous private capital people in my network that I’ve developed a relationship with, that I can call and say “Hey, I have a deal that I need to close tomorrow for $100k, and here is the exit plan”. And they’ll just basically say, “okay, just text me the address, and let’s close it tomorrow.”
Alright, so I know I promised 5 things, but I just have to add 2 more.
6. $20,000-$40,000 can buy you 3-8 deals.
Yep, for the cost of that real estate seminar & course, you could have the best class in the world-actual experience.
7. Pace yourself…Real estate is a marathon where you have to focus on 1, or maximum 2 things at a time to start off. You will find courses on wholesaling, multi-family, mobile homes, single family rentals, single family flips, notes, etc. But don’t get distracted by all of those shiny objects. Do one thing first, and do it well.
To conclude…
Take note of the type of person that can help you with the issues above:
#1 – Budgeting-CPA or other financial advising professional that actually has investments
#2 – Doing 1 flip/scaling-a Real Estate Coach can guide you on how to scale up with your existing assets, be it private capital, strong relationships to contractors, other connections to the top wholesalers who actually sell good deals, etc.
#3 – For your payouts-a Real Estate Coach can guide you on how he avoids budgeting issues so that the operation does not falter. You have family, employees, contractors, and a heap of other people depending on you to keep moving the ship forward.
#4 – Buy right-a Real Estate Coach can usually tell you if a deal is garbage in 30 seconds-and this is more important than the rest, because investing in JUST ONE wrong deal can kill your business.
#5 – Networking-a Real Estate Coach-because he or she can introduce you directly to all the right players, so you barely have to do any networking, if any at all.
Note how most of those issues can be addressed by an experienced real estate coach? And yes, I don’t think all seminars with coaches are bad…I just don’t think most serve their customers what they need at the pace they need it. And to be honest, the seminar speakers they have probably don’t even have all that much real estate experience-they’re probably just reading a script.
Which makes me think of something I have held off for far too long.
Everyone keeps asking when I’ll have a private real estate coaching program.
So, it’s finally here.
Later,
Ivan