Is a real estate mentor right for you? You're about to discover when it makes sense to have a real estate investing mentor and when it doesn't. In this training, you'll learn that there are 3 types of investors, as there are typically 3 types of fisherman. Set on a boat in the tropics, fishing with a guide I paid $700 for, will make for a terrific analogy to explain real estate investing in general as well as which of the 3 investor types should get a real estate mentor. Enjoy the lesson, the fishing and the scenery!
3 Types of Real Estate Investors
- Investor by Default:
There are thousands of these people out there. They purchased a primary residence many years ago but then decided to move into a new home, but since they struggled to sell their old home, they gave up trying to sell and just began renting it. Now they are years down the road, and are landlords by default. They didn't plan on becoming a real estate investor, it just happened by default.
- Inspired by House Flipping TV Show:
These folks are interested in doing one house flip. It may turn into more deals depending on how the first one works out but they aren't focused on flipping houses as a long term commitment and they aren't looking at it as a way to create lasting financial change. For many, it just "looks like fun" since a reality TV program is usually 22 minutes of air time long and they tend to glorify the business. In case you are curious, here's an interesting opinion on Are House Flipping TV Shows Helpful for Investors to Watch?
- Seeker of Financial Freedom:
These types of people are looking to use real estate investing as their vehicle to become financially free. They see real estate as their ticket to lasting personal financial change.
Fishing is a Great Analogy for Real Estate Investing
- Step 1: Locate the Fish
Most bodies of water contain little to no fish. 5% of the water contains 95% of the fish. So to effectively catch fish, you must locate the fish. Finding great real estate deals is no different. 95% of the sellers in any marketplace are not motivated enough for you to be able to structure a great deal. You must locate the 5% of sellers who are truly motivated.
- Step 2: Attract the Fish
Once you have located the fish, you then must present a bait or lure that will trigger the fish to bite. In the same fashion, just because you locate a motivated seller, that doesn't automatically equate to you getting the deal. You must present yourself correctly as to attract the seller to work with you (as opposed to running away from you).
- Step 3: Hook the Fish
To catch the fish, even if you have gotten them to bite your bait, you still have to set the hook. Beginner fisherman know all too well how easily fish can steal your bait without getting hooked. In the same vein, you can present yourself correctly to a motivated seller but then you still must get them to sign the contract.
- Step 4: Land the Fish
Once the fish is hooked, you're not done yet. You now have the challenge of landing the fish. You have to reel the fish in and get them in the boat. You better have the right equipment and the right technique or you are likely not to land the fish. In the same way, with a great real estate deal, just because you have it under contract, that doesn't mean you are done. You have to get that deal to the closing table. Losing a great real estate deal is very common among beginners. It has been determined that some 60% of real estate contracts never end in a closing.
Which Type of Fisherman Needs a Fishing Guide?
- Bait Chunkers:
These people go buy live bait, set up camp on a bridge or other such easily accessible place from shore, randomly fling a big chuck of bait out into the water, sit and then wait for a stray fish to pick up the scent of the live bait and hopefully bite. No experience required. No intelligence. And certainly no need for a fishing guide.
- Do It Yourselfers:
These fisherman may have a boat, their own equipment and some knowledge of fishing. Before the trip, they may read everything they can find online from forums and other interactive posts on what to do to put themselves in the best possible position to catch fish. They may even stop into the local bait shop to pick up some tips on where to fish, what lures/bait to use, and other such local knowledge. Unfortunately, the stuff they read on the internet could pertain to a different time of year, tidal flow, atmospheric pressure or moon phase. It also could be just plain wrong as can often happen in forum threads, whereby the blind is leading the blind. Also, the bait shop makes their money when the fisherman buys, not when they catch fish. So although the bait shop may want to genuinely help, they may also want to sell off some of the lures that haven't been selling too well. So although the do-it-yourselfer may prepare as best as possible, ultimately, they will be on their own when they are actually on the water, trying their very best to apply all that they learned from the bait shop and the internet. They probably won't catch much but then again, they may find enjoyment in the challenge as well as the scenery and whether or not they actually catch fish doesn't really matter. Much like a house flipping show inspired investor who has extra time on their hands and thinks that fixing up a dilapidated house is fun.
- Serious Fisherman:
Then there are those very serious fisherman who want to have an extraordinary day on the water by catching lots of fish without having to learn everything the hard way through the school of hard knocks. They shortcut the enormous learning curve for any fishing spot by hiring a first class fishing guide who already has mastered the art of locating, attracting, hooking and landing fish in the exact conditions you are faced with the day you go fishing. They know all the little details that make the difference between huge fish and none at all. Yes, it may cost a significant amount of money to hire a guide for a day (in the video, I paid $700), but the difference is in the results.
Which Type of Investor Needs a Real Estate Mentor?
- Default Investor:
A real estate mentor is not necessary for this group. They probably won't be an investor long anyways once they sell off their one little rental home.
- House Flipping Show Inspired One Time Investor:
Since they are only going to be doing one deal (or maybe one a year or less), mastering real estate investing is not necessary. A trustworthy and competent real estate agent, contractor, hard money lender, mortgage broker, closing company and real estate attorney will get them through the few traditional deals they may do in a career and hopefully they won't completely lose their shirt on any of the deals. They may not make much money but it may be a fun little experience that they can check off their bucket list.
- Financial Freedom Seekers:
These people need a mentor. It's the fastest, easiest, most efficient way to achieve financial freedom through real estate. Although many do-it-yourselfers in all walks of life have tried to cut out the fishing guide, most discover that they have been penny wise and pound foolish. Here's why...
Real Estate Mentor Motivation
I've been on guided fishing trips whereby we're 3 hours into it and still no fish and the guide is sweating bullets. Why? Because he is paid hundreds of dollars to have his clients catch fish and if his clients aren't catching anything, he is very motivated to remedy the situation. Meanwhile, if I had just read some fishing posts online or got some tips from a bait shop, and there I was, 3 hours into my fishing excursion with no bites, I would be left with me to figure out what I was doing wrong.
Similarly, if you hire a real estate agent to help you find an investment property, they make their commission when you buy, not when your investment turns a profit. The contractor makes his money when he fixes up the house, not when you profit. The attorney, the mortgage broker, [insert any professional you pay in a typical real estate deal] all get paid when you buy or sell, not when you produce a positive profit result.
However, the right real estate mentor is different. They are paid to help you produce results and their motivation is based on your productivity, not your activity, like every other real estate professional you hire in a deal. If you want to do a lot of deals, make a ton of money and eventually achieve financial freedom from real estate, you need a mentor who is motivated to help you profit, not just do deals.
A Real Estate Mentor Gives You the Unfair Advantage
Part of the enormous challenge with catching fish is the huge number of variables that any fisherman faces when they get out on the water. What worked fabulously yesterday may not work at all today. The same holds true for real estate investing. There are so many different facets, variables and changes going on at all times that even if someone gets lucky and does extremely well on their first deal, that doesn't mean the conditions will be the same the next time around. Fishing guides spend nearly everyday out on the water with the goal of having their clients catch fish. Years of time spent on the water have honed their skills razor sharp so that no matter what the conditions, they can search their mind for a day in the past that was similar to the present day and dial up a formula or technique that will work. A do-it-yourselfer fisherman can not compete with that. Fishing guides get paid everyday by clients to fish so they simply have more experience over a longer period of time than everyone else and therefore have the unfair advantage.
A real estate mentor gives you that same unfair advantage. Years and years of investing themselves and mentoring others on a daily basis sharpens their skills to the point where they can out maneuver the competition and produce greater results for their clients than anyone else. Unfortunately for some who are reading this, you are in marketplace where one of my apprentices operates. Good luck out-investing them. With me and my organization behind them, assuming they follow what we teach them (yes, some people pay for a fishing guide and then proceed to not follow their advice and they wonder why they didn't catch anything), my apprentices are formidable opponents that are extremely difficult to compete with. To learn more about how you may be able to be mentored by me and the Freedom Mentor team, apply to my Apprentice Program.
Is a Real Estate Mentor Right for You?
If you don't have high aspirations for doing much of anything with real estate, then don't invest your time or money on a real estate mentor. But if you want to be very productive and produce substantial results from real estate investing and even become financially free one day, get a real estate mentor.