Good morning folks!
This morning I got an email from a lady asking if she should spend $40k on a real estate investing mentoring program. Without knowing which program or what she was getting for $40k, my initial reaction is, “If you have $40k just laying around, it should be going into a deal and setting up your business.” And, then I asked her if the mentoring program was going to supply her with her first deal and could she earn money back on it. She of course told me no it did not include them sourcing her first deal, but, they were giving her access to their lenders and others to help her with projects. I tried to explain to her that she will have access to their lenders and it is another way for them to earn money off of you over an above the $40k she’s already spent.
Most people who have come to Boston AREIA know that we do not have selling speakers pitching their programs at our meetings. That’s not to say I don’t believe in education or coaching or mentoring. I definitely believe in education and investing in yourself where your business is concerned. I just don’t agree with the high pressure, high pitch sales tactics that are used. And, after being in real estate and running Boston AREIA for over 10 years, I have seen people spend a ton of money on education, but never end up doing a deal or doing anything to make that money back. I’ve watched people do everything from eat away all the equity in their homes, lose their homes and get divorced because of their pursuit of real estate education. Now, don’t get me wrong. A good portion of the reason I watched some people go into the education overload abyss, so to speak, is because they didn’t take action AFTER they bought the course. That is something they need to own. However, the guru’s selling pitch is usually regarding taking action. And, they make it seem like the biggest part of the process is taking action to buy the course. I’ve watched people get caught up in that portion of taking action. But, that’s not the part that matters at all.
It’s the main reason we stopped having selling speakers at Boston AREIA. And, let me tell you, it’s harder to get local active real estate investors to come and speak at a meeting than it would be for me to call up some of the gurus and have them come and sell their courses. It’s far less profitable for the group because we aren’t earning anything from course sales when the speaker isn’t selling anything. It is, however, far more valuable to the attendees to meet local real estate investors in their market. I have seen people be successful with guru courses, but, I’ve seen far more not be successful to continue inviting the gurus to speak.
I have found a solution over the years with some local real estate investors I work with. They do over 100 rehabs a year and have developed solutions for everyone who wants to be involved in real estate investings. I told this budding investor, before you spend $40k on a guru course answer a few questions:
- Why real estate investing? Do you just think it would be cool to learn or are you passionate and want this to be your career?
- Is this money expendable or will it hurt you financially if you never make it back?
- If it is expendable, does the guru source your first deal for you?
I then recommended that she start with a monthly coaching option similar to what Brownstone RG offers. I say similar to, but, I haven’t really seen a monthly coaching program that offers what they offer for $97 a month. I mean for $97 a month, or the cost of a latte a day, she will learn a ton about real estate investing and will learn a ton about herself in the process. She will learn whether she has the desire and the focus to be a real estate investor. She will learn her own motivation. Will she take action on the lessons she is presented with? Did she complete the setting up your business section?
- No, then it’s probably not her thing and she will have learned that for $97 instead of $40k.
- Yes, great, move onto the next step of learning in the coaching program, you still only paid $97 instead of $40k.
Brownstone does have the big guru mentorship program as well. It’s called the Fast Track Joint Venture Program and is focused on people wanting to learn to rehab. The biggest difference that I’ve seen with their program is they train you to find deals, however they also source your first rehab deal for you. They have a Senior Project Manager oversee and train you on how to complete the project and you get a portion of the profit from the deal when it is sold. If you are passionate about real estate and have expendable funds, this is a great program for you. However, if you do not have expendable funds and you are looking to try real estate investing to see if it’s a good fit, then the monthly coaching option is the best.
I’m not sure what she’s going to do. Only time will tell. But, I figured is she was pondering this type of question, others are doing the same. Hope to see you at our upcoming events. October 19th we will be in Quincy with Boston Property Ventures, LLC. They have some great development projects in and around Boston they will be going over and on October 21st we will be in Bridgewater at a rehab tour with Jerry Lima and Renee Jean from Brownstone, RG.
Boston AREIA Chief Connector