Why you NEED a mentor!

Question

I am an aspiring house flipper that has been a part of several flips on the contractor side of things, but I do not have much experience with the investment side. I am very humbled today because I have been doing this for about 6 months and have around 18 deals under my belt up to this point. Most are wholesale deals, and some are retail deals, and I have been lucky enough to have been a part of 1 flip as an investor. I really feel like I am starting to get an IDEA on how to be an investor as a wholesaler, but I really know very little. I guess after a couple of deals my confidence has started to grow, and this has almost been a hindrance. This "confidence" has really almost held me back from being wise.

I am so fortunate to have worked with a business partner who has been willing to work with me to guide me in the ups and downs of real estate investing. Being a part of BiggerPockets to me is like a Pastor going to Bible School. Seriously, I would be doing all sorts of crazy things. For instance, we had a lead where the seller lived out of state and paid way too much for a property. We could only pay (so we thought) around $5,000. Then, I went to take a look at it and wow! It was just nasty! Maybe I will share a couple of photos-ha ha.

There was no way (I thought to my clever investor self) that we could possibly pay anything for a property in this condition: Dog poop everywhere from squatters, flooded basement, broken windows, and with the flooding you know we would have to replace the furnace and water heater-right! My wife and I thought since the seller would be willing to accept $5,000 that we could at least try to fix it up and maybe rent it out? Sounds ok, right? Well, the comps for this particular street are maybe $10,000 to $15,000 tops. That is what a house all fixed up would sell for.

I talked to my good friend and mentor what he thought about this one-given the fact that I just learned today that the basement is flooded and the house seems to dip towards the middle (foundation issue?). He believed that if we could still get the price down to $2,500 that he would take a chance on it. What!? That is crazy right!?

One day, not too long ago, we were talking about another deal. I had this potential deal and with what the comps were telling us and what the seller was willing to sell it for we might only be able to make around a $1,000 each. I said to him, "We are only going to make a $1,000, so it really is not worth it." He quickly reminded me that prior to me getting into this business, $1,000 is more than I used to make in an entire month.(I only made around $900 a month with my previous income) "Now, you want to say you are only going to make a thousand dollars!"

He was spot on! His wisdom has saved me from more than a few bad deals up to this point, and the list keeps adding up. Lol! So, with the $5,000 now a $2,500 property, he said that even if we only make a thousand dollars it is o.k. because this was more money than we had going into the deal-right? So, again the newbie takes another lesson from the more experienced-wiser investor.

Working on your own can be a great way to build wealth, but for me doing this on my own-I would have went bust a long time ago (financially). Lesson learned: Getting a mentor has allowed me to grow in more ways than real estate. Having someone to bounce ideas off of (especially renting out a terrible property in a high crime area) is so important for us new investors. I am just so eager to start holding rental properties, but sometimes good things come to not only those who wait...Good things come to those who areready!

If you are new-get a business partner!

P.S. Here are some pictures of this one-view at your own risk as it is really gross!

Pictures of the $2,500 rental property

Stephen Barton · Answer

I had the same thoughts @Essie Dodson about wasting someone's time, but to my surprise-this is not the case! Actually, I approached my friend and mentor with "something to put on the table" as in I had a deal. I provided something that my mentor would have never known about, he found a buyer and we both made money. We split our deals 50/50 and this has been one of the best decisions I have made since starting in this business. Just make sure you have something to offer, like you time, creativity, or just a potential deal. I know a lot of investors out there that would be delighted to get 50% of a deal instead of never even hearing about a deal. It is a win-win for both of us. Hopefully, you will find the right person who is willing to walk you through your first few deals like I have. You can do it, if I can-I promise!

Essie Dodson · Answer

I love this post. This is the gold I know that I would be getting from a mentor. I'm currently looking for a mentor in my area. Being a newbie i don't know how to begin building a relationship in order to gain a mentor. I feel like I would be a burden on someone that is more experienced in REI because time is money and with me being low on cash its hard for me to say, can I partner up with you, because I have to cash to contribute to any deals.

Brett Snodgrass · Answer

@Stephen Barton

Thanks for the great post. I agree that having a Mentor is very important to minimize mistakes.  I wish that I would have had a good Mentor when I first got started as I think it would helped me grow faster and become more savvy through the years, as I had a few plateau years.

@Essie

@Essie Dodson , I would look at who is active on BiggerPockets and is in your local area that you want to invest in. Also go to you local Real Estate investor meetings.  Also make sure that you interview your mentors, because you want to work with someone that has your best interest in mind and that you can work well with. Also, you want to work with someone who is actually doing deals and has some success.  And finally, beware of the mentor who wants to charge $1000's up front, and if they had your best interest in mind, they would know that $ would be better spent on your marketing or spending it on trying to find deals. Some people might think they don't want a Mentor, so they can keep all of the profit. But they are only thinking about their first year... My advise is to use a Mentor on all of your deals that first year, but think about how much more profit that you will make in the years 2 through you retire by using a mentor to show you the ropes that 1st year.

Thanks for the post,

Brett

Stephen Barton · Answer

@Victoria Wintersthank you for the mention and the vote! Isn't it amazing to know you have someone who has your back in a "dog eat dog" world? I think it was @Jerry Puckettthat said the quote you are referring to @Matt Cramer. That is exactly the case for me as well. I had been reading and learning on this site-then I found a deal that I took to my mentor. I did not ask him to "hold my hand" but I asked for very specific questions to be answered and he was a guide. A good mentor will not give you the answer all of the time, but will ask you, "what would you do?" or "what do you think?" sort of thing. Then, we will review my answers and talk about it. I feel like a good mentor knows that they do not know everything. In fact, my mentor and I talk almost everyday and today he just asked me what I am doing with my marketing and what type of letter do I use. I surprised him because it is not your typical letter, and he agreed that we have to change things up and keep it interesting. In a true business partnership-both parties learn, grow, and work off of each other's victories and failures. A true partnership should be equal-not one sided!

Victoria Winters · Answer

@Stephen BartonThis is a fantastic post!  Thanks so much for sharing your stories.  A mentor is a person who helps to guide another to greater success. Bravo for pointing out the necessity and importance of getting help for a new business.

I have two mentors that I invest in to help me with my business. I have noticed that being accountable to someone else helps me to complete projects and maintain the course of action that is necessary to operate a successful company.  It is always a good idea to have someone with whom you can bounce ideas around with and who will listen and offer a second opinion.  The more mind power you have in your business the better for everyone.

Matt Cramer · Answer

Have to agree. Having a mentor has been incredible for me. I have actually been able to invest in some of his deals in order to get started. Then when I found a deal with a large spread he was able to jump on it and was happy to take me along. I heard somewhere, "when the student is ready the teacher will appear" it was totally true in my case. What about yours?

Stephen Barton · Answer

I simply mean that being apart of biggerpockets has given me knowledge that I would never have had without this site. This site has been like a learning tool for me, as well as a networking tool. A pastor goes to bible school- I went to BiggerPockets. Just being silly I guess:) @Troy Fisher

You have the right attitude Account Closed! You have more to offer than you know, we just have to be more brave and get out there to make things happen.

Account Closed · Answer

Excellent post @Stephen Barton and great comment @Essie Dodson !!

As a newbie myself it's posts like this that are priceless I can definitely relate to your comment Essie and I think we can both take Stephen's advice on finding a deal as something to "offer" for a little education and help from a veteran investor in our areas. Posts like these from fellow newbies keep me coming to BP and keep me motivated! We are all gonna make it we just have to hang in there yawl!!

JOANN TAYLOR · Answer

@StephenBarton

Thanks for the words of wisdom.  Hoping to get into wholesaling and realized early on the value of a mentor.  Still no luck finding one, but I'll keep plugging!

Stephen Barton · Answer

@Lauren Lockett thank you for your kind words. Even as a beginner we have so much to offer those who are veterans. I think just our enthusiasm is contagious, and it gives others a sense of renewal. Sometimes when things are slow for me I just go into the forums and read about others who are getting started and I see their enthusiasm and it makes me proud to have worked so hard to get where I am. I still have a long way to go, but we have a great network with BiggerPockets to use to help one another.

Why you NEED a mentor!

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