My spouse and I are interested in getting into real estate investing. We've been learning as much as we can and have gotten as far as deciding what strategy we want to use (buy and hold) as well as a basic budget outline. We feel a bit intimidated getting started and are wanting to find someone to mentor us, at least for this first property. So we reached out to a real estate agent and investor that we personally know. When we sent them an email asking for mentorship this was their reply:

"I offer 2 different options for mentoring:
1. I provide advice on comps, area, type of home and general contracting ideas advice. I will also walk you through renovation budgeting, type of insurance, staging, marketing and pricing.
For this type of service, I charge a one-time consultation fee of $500 and have you sign a listing agreement with me, at the standard 6%. I’m available but not as reachable as with option 2, simply due to the number of projects and clients I currently have at any given time.

2. Upon a visit to the home of your choosing, I walk the property and help determine what what needs to be renovated and budget accordingly. I will negotiate the price with the owner, write the contracts and addenda. I will also help you purchase the home. I will provide the connections to the hard money lender, with my recommendation you will receive a fair and lower interest rate. I will be a financial partner in this project. My fee schedule for doing a Joint Venture is this: 1st Project 60% (me)/40% (you)

2nd Project 50/50

3rd Project 40/60

Any additional projects 25/75

I use my LLC and credit for all projects in which I'm a partner. This basically means that you split the purchase cost and closing fees, as well as the interest per month. Then once we close on the home, we split the proceeds according the fee schedule above. I do have my attorney draw up a JV agreement so that everything is legal, binding and protects us all.
When I offer a Joint Venture, you have access to my contractors and crew, my insurance and lenders, my expertise and experience, my title relationships, my investor network relationships and more. You will have input on projects and will have access to the home in order to check on progress, collaborate with contractors, etc. I’ll also help you learn how to find off-market deals."

Does this sound like something that you would do getting started? Is it standard to pay for mentorship? And if so do these numbers sound about right? Any pros/cons? Thanks in advance.

Houston, Texas

2 Votes