Learning local information: It’s great to learn real estate investing fundamentals and know exactly how to invest in a good cash flowing property but you also want to have some specific knowledge about what is happening in an area. Did you know that most of the houses built by Builder XYZ have had this problem with a leaking pipe? Did you know that Ikea has submitted an application to build a store on the West end of town? Have you heard that the basements are flooding on John Street because of poor drainage on that street? These are all things you might hear about at a local meeting that you might not find out about reading the paper, doing searches online, speaking with your real estate agent or your property manager. These are things that people on the ground buying, holding and selling properties in the area might find out and share at a local meeting.
Surrounding yourself with like minded people: Most of my long time friends hold corporate jobs and really do not understand what I am doing, why I am doing it or why I prioritize certain things above others. Some are supportive while others are actually outright critical especially when what I feel I have to do conflicts with what they want me to do. It’s quite an isolating feeling. And until I started to attend local club meetings, expand my network through social media communications and build friends that were doing what I am doing I didn’t really feel like anybody but my husband really understood me.
Connecting with experts: Local club meetings are usually more intimate than big conferences yet many local organizations are able to attract impressive guest speakers. Because of the intimate setting (aka smaller size) you often can get in front of an expert and get a few questions answered. And most of the time if an expert has taken the time to speak at a local club meeting they are there to give back so they will be happy to help you out. They may even offer you opportunities you weren’t even asking for which happened to us at a recent club meeting. We’re now going to see that speaker, who co-runs a very large real estate club in Vancouver, in a few weeks. You never know where that connection may lead.
Finding joint venture partners: We have spent a lot of time offering our deals to friends and family who would politely listen, say they’d think about it, and then never ever say yes to doing a deal with us. It was frustrating and it was actually emotionally draining. You see, we would first have to convince Uncle Glen that real estate was the best place for his retirement savings (not the 27 different mutual funds his financial adviser put him into because he would make a ton of fees off my Uncle). Then we would have to present our opportunity to my Uncle in such a way that he knew we weren’t asking for a favor. Even if he wasn’t remotely interested, he wouldn’t tell us to “pound sand” he would politely ask for time to think about it. So we would be left following up and following up only to realize he never had any intention of doing anything. It sucked.
Then we stopped one day and looked at the previous six or so deals we’d done with joint venture partners and realized the easiest, most fun, and quickest deals to put together weren’t the ones we’d done with family or friends. The deals that came together the easiest and that we felt the best about were the ones we had done with people we had met at local real estate investing club meetings! They already knew they wanted to put their money into real estate and they knew they didn’t have the time or expertise to do it well themselves, so they found help in the form of US! These people came to us not the other way around. Once the partner had completed some due diligence on us and the deal we were offering them, the rest was smooth and easy.
Helping others: If you have already purchased a property or two then you can be an invaluable resource to someone else at the club that is just getting started. Even just the smallest gesture of assistance, like giving them the name of a great inspector, can help someone just starting out. It’s a nice thing to do. And for me, I love how doing something for someone else gives me so much satisfaction and good feeling.
Building your team: We’ve been investing in the same city since 2001 and there are still times where we find ourselves in need of a professional that we’ve never had to hire before. For example, we recently had to hire someone to draw up the plans for a legal secondary suite we’re adding to a property. We’ve never had to have plans drawn up. We found ourselves calling everyone we know in the area to get recommendations. Ultimately we went with a guy that the City inadvertently recommended. They are not allowed to recommend anyone so we said “Who do you see a lot of plans drawn up by?”. We ended up with a great guy that the City loves – and ultimately the plans were for the City to approve so it worked out really well. But, sometimes your fellow investors will be the best source for a referral. For us, if we didn’t already have two really fabulous mortgage brokers on our team, we’d be chatting to the ones that come to the investment club meetings because they are more likely to understand what we need as investors.
It’s an Action Step: This is especially important when you are a new investor, but I think it’s always important. You need to consistently take little action steps to move yourself closer to where you want to go.