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Updated over 4 years ago on . Most recent reply
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Is coaching necessary?
Hello!
I recently signed up for a real estate investing coaching program through my local REIA here in Connecticut. I am considering requesting a refund for my down payment on the program for a number of reasons:
* There is an abundance of information online regarding real estate investing
* There are numerous networking opportunities available to learn from others
* I am extremely self motivated and have been taking small actions on my own already
My main fear of not moving forward with the coaching is missing out on information that I do not know about my local market and making mistakes I could have avoided. In addition, this real estate journey will be a joint venture between my wife and I. I would hate to act like I know what I am doing and provide her incorrect information.
I kind of know the answer to this but I am curious to know your opinion. Maybe some of you have been in the same situation?
Thanks in advance for any feedback!
-Brandon
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- Rental Property Investor
- Gilbert, AZ
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@Brandon Rush
Most of the time posts like these end up irritating me. But this one has been different. I am going to repost my opinion of these types of programs here. I hope you find it helpful.
“Posts like these end up irritating me. Mostly because it creates the illusion that everyone's comments are of equal value. At the risk of sounding arrogant or cocky, I wish there were buttons on some of the forums that read "filter out all posts from posters who have done zero deals," or other buttons that read "filter out all posts from those who have done less than 20 deals, or 50 deals, or 100 deals, etc." If we could have those buttons on this thread I would happily click it to find out what those with a lot of experience and results think about a program like these.
To qualify my comments, and I have posted this information several times on the BP forums before, I have spent 75k on guru programs over the past 4 years. My net worth before joining the guru program at the beginning of 2015 was just under 300k. Four years later it is at around 1.25 million (spread across several several entities with asset protection). Before I signed up for the guru program, I had purchased 1 rental 5 years earlier, 1 commercial building with 12 office spaces a few months before, and I had flipped 3 properties. The profit on the flips was about 17k total and the cash flow was about 2k from the commercial building. During the year of the program, I flipped 6 more properties for a profit of 95k, purchased 7 units out of state, and did 1 seller finance deal where I did a wrap around mortgage. In 2017 we went to another real estate weekend training for $200 were we learned about the lease option model. Then we combined everything we had learned up to that point into a new model that we use and we have scaled up to owning 80 units (56 with a partner) including a 20-unit mobile home park. Combined cash flow is between 12k and 14k a month which stays in the businesses to acquire more properties. I don't share this to brag. These are just numbers to illustrate a comparison from before the training to after the training.
It sounds like you are not opposed to paying for mentorship, but you just don't want to be scammed. You don't want to spend a lot of money for something that doesn't have the value. I understand that. I think that there is plenty of education in all sorts of fields that has a low return on investment. The big question is where to find the information/education/mentorship/coaching that will be worth the cost.
I sat down with a friend for lunch this past week. He is a low scale guru in that he charges 15k for coaching people how to make money on pre-foreclosures. That is his niche and he does it really well. Then he splits the profits with them on their first few deals. As I was talking with him he said that even though he is able to help them succeed, most people don't do the work required to succeed, and that if he didn't charge them for the education then he would just be wasting his time because they wouldn't do any thing. He stated that every time he doesn't charge someone and he starts coaching them, they never end up doing a deal.
I have a monthly investor meetup group that I run in Mesa, Arizona. We have probably had over 200 different investors come to the meetup over the past year or two. During the meetup, we share with other investors the types of deals that we do and how we do them (mainly a combination of the BRRR model with the lease option model and private money lending into 2nd position notes). At the end of the meet up we let people know that if they would like to learn more about our model then they can become a private money lender on one of our deals and we will show them how to do the deal. We include them in on our WhatsApp group where we show pictures and videos, answer questions, walk people through the deals that we are doing. We also hold monthly lunches in addition to the monthly meetup groups and I make myself available for probably 10 hours a week to answer questions and do some coaching. But here is the psychology; because the people that have lent us money are getting a return on their money of 8-12% APR, they are getting their reward already and most of the time they do not take advantage of the learning opportunities offered them. During the guru program that I did, I spent 25k for weekly one-on-one coaching for 30 minutes a week. I changed my work schedule to be on that call every week because I didn't want to waste my money.
So you have to ask yourself, what type of person are you? Are you someone who learns well from online forums and then you can go out there and do it and you don't need coaching. Or are you someone that benefits from working with others in person. If you can read and go and do what you read like my wife can, then do that. If you are someone like me who benefits from having someone show you one-on-one, then find someone credible to show you. However, if you do not have a personal relationship with that person, then don't be surprised if they are not willing to spend a lot of time and effort into teaching you and training you without being compensated. I know that people say to offer them something in return such as to help with the rehab, but honestly, successful investors have systems where they have teams of people who do a fantastic job on their properties and they don't need someone new to interrupt their system.
This post is not a solicitation to be your coach. I encourage you to figure out what type of person you are, what your learning style is, and then seek out resources that go well with your learning style. If that means reading, then read. If that means, watching youtube, then do that. If it means working with someone one-on-one then do that through finding a coach, program, or otherwise.
One disclaimer I will give though, if you do go with a guru program, don't go into debt to pay for the program. Only pay for an expensive program if you are able to have money over and above the cost of the program to start using the strategies that they teach you. If you are at a place where do you not have money and you are an adult, then you are not ready to invest in real estate. You need to learn how to manage your finances first and then start to invest. More money only magnifies your money habits. It doesn't fix them.”