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Updated almost 4 years ago, 01/14/2021
Mentoring Cost $20,000
I went to the 2 day Life Styles Unlimited class this past weekend with the goal of learning and finding a multi-family mentor to begin investing with. Like a typical sales funnel I quickly learned it was a brief overview to get the juices flowing, tell you about all the stock market failures and pain points that have let you down in the past, then build you back up with the millionaire mindset and that for only a mere $20,000 that LSU can mentor you to become a millionaire and live the millionaire lifestyle that you and your family so deserve. And to ad a sense of urgency to close the deal, they say you must sign up today or next month the price will be $25,000.
My question to everyone...is there anyone out there who genuinely is willing to mentor someone in the Dallas/Ft.Worth area? I have the passion and the funds to invest in multi-family, I just have no interest in being run thru a sales funnel and someone collecting $20,000 - $25,000 first. They are in the business of making huge money off selling information and dreams via sales funnels first, while teaching the secrets of investing second.
I am looking for the kind of mentor that is not part of trying to run people thru a sales funnel and collect there money before you learn the “secrets”. Is there anyone out there that exists who is willing to let someone shadow them, while in return working for free just to watch and learn the process that truly make there living investing in multi-family and not running a sales funnel?
@Michael Burks my recommendation is to get your first deal under your belt. Don't worry about getting the best deal in the world. Just get a solid property near by and start the learning process. There is no faster way to learn, than to jump in and start doing.
Even if things don't go great on the first deal and you lose a few thousand dollars, it is still cheaper than the $20K mentoring.
Anybody who is excellent in real estate has no time to mentor. Think about it logically. If you were making huge money in real estate, your time is worth more than using it on some newbie. That doesn't mean someone more experienced won't help you, but you need to bring them value.
I would pursue other learning opportunities available to you before dropping 20 large. Reach out to known sponsors in your area and ask how you might add value to what they are doing. You'll be surprised at how open they might be.
I'll add, today one of the members agreed to bring a drill and walk through a boarded up place with me next week (with the permission of the owner). If you find a good REI group, the members really enjoy sharing what they know. They know there are enough deals for everyone.
Michael Burks Excellent post! I totally understand what you’re saying about the sales funnel. Right now I’m checking out Charles Dobens with The Multifamily Investing Academy. Check it out and let me know what you think.
I’m currently looking for off- market deals that are no further than 2.5 hours from Houston.
My perspective from a new REI as well and what I did to find my "mentors". Keep in mind, I travel about every week for work, single source of income for a family of 3. So folks saying they cannot find time to do this I don't (personally) feel have the motivation or have fear of moving forward.
I listened to the "90 day challenge" and decided I was going to (and am currently about to achieve) my first investment property in 90 days. I had no clue how I was going to get there, but come hell or high water, I was going to. I'll be closing on my first good deal right at that ~85 day mark. I went through about 30 hours of podcasts (WARNING: Beware of the shiny object syndrome with podcasts) and 3 books that first week.
The SHORT summary is that I don't believe in a dedicated/formal mentorship. I value an extended network of mentors (just like I offer at work), so I can learn different facets from deep experience in different areas, instead of broad knowledge across the board. I would use 1 or 2 "mentors" as an anchor and accountability partner.
Find one that has extended experience ("years") and another that's a little further than are you're at in your REI (1-2 years). Both sides give extremely valuable insight.
Meetup Groups:
- Located a local meetup via meetup(.)org and BP. Went out to lunch with the group organized and a couple of out of state investors. Actually just attended my first formal group meetup last night.
Whole Sellers:
- Jotted down any bandit sign numbers and linked with wholesalers. Contacted every single one, conveying my interests and asking to meetup or talk with them for a bit. Did some "ride alongs" to learn some of the areas and varying property conditions, estimating, etc. These guys are invaluable.
Property Managers:
- Contacted a couple of property managers. Again, conveying some of my interests, and talking with them about good market areas, where to stay away from, what vacancy rates might look like, areas they're seeing trend, rent rates, etc. These folks are more than happy to talk with you, because a solid relationship can give them good returns for PM.
Lenders:
- Connected with a few local lenders to help me navigate and learn both the traditional/conventional strategies as well as "creative" funding.
Flippers:
- Got to do a couple ride alongs, similar to the whole salers above. Got to see everything from cosmetic to replacing everything down to studs.
Renters:
- Again, same as flippers, wholesalers, etc - noticing a trend? :)
Final Note:
- Not once did I have someone ask me to help out. I offered it, but in most cases, they were all interested in forming a relationship that could blossom into a mutually beneficial partnership.
- Don't worry about formalities. Some folks like that you specifically request a mentor, some don't. Just gauge the situation. Some are extremely candid, others need a little time an rapport.
@Michael Burks, glad you started this thread. I am several months into my education and trying to determine the path that is right for me. I received a 2 page handout of what was involved in one mentorship program. When you break down what is proposed line by line, there is less of a "I need a mentor" feeling and more of a "If I learn these in the order listed, I'll be just fine without the mentor". If you'd like, shoot me a PM and I'll email you a PDF.
I can easily see a mentor saving you from making one $20,000 mistake and paying for themselves. I can also see start slow and learn yourself. Good thought provoking thread.
Take that 20k and place it down on a rental that cash flows. Those classes bunch of scams
@Terry Miller - most don't offer guarantees because we can't guarantee people will take action on what they are taught.
BP and every FB group for REI is full of people with dreams and ideas of achieving those goals who are just looking for a handout and an easy button, but won't do the work to back it up.
@Michael Burks - not referring to you
Yes, a lot of mentors have sales funnels. Some of us work off of referrals and word of mouth. If I have 25+ years experience and have spent well over $100k in education over the years and worked my tail off to have closed hundreds of deals then that experience and knowledge are valuable to some. To others it's not, they prefer to go it alone and do it the longer way. That's cool.
I'm the first one to tell people that you can LEARN everything you need to know for FREE at the local library. Learning isn't the battle for most, it's the DOING (which usually means overcoming the fear). If having someone who has been there and done that by your side and helping you teaches you a way to make money that changes your life for the rest of your life, then that is worth something.
I had to pay it in money, blood, sweat, tears, overcoming fears, frustration, hard work, and tenacity.
The funny thing is that I felt the same way about the sales funnels at first and started mentoring people for free. I spent a TON of time meeting people, making them videos, talking to sellers with them, etc. and they would stop part way through the deal and not follow through because a kid was sick, they had to work overtime, their mom was in hospital, their car broke down,etc. Or get cold feet. Or find other excuses to not get the contract signed or do their part.
After a couple of years of this I decided that people who didn't have any skin in the game didn't take it seriously and had no reason to NOT waste my valuable time. That's when I started charging. I don't charge $25,000 and no, I don't guarantee you success because I can't control your actions. Only you can do that. I can guarantee how I will show up, what I will provide and the opportunities you'll have.
I love helping people get started in this business, but I love spending time with my family more. I DO get personally vested into helping others succeed and all too often take their failures and mistakes on as my own. For every person asking for a free mentor, there's 200 others sending an email or calling my office. 90% of who will never do anything.
If you spending money on a mentor gets you to take action once and for all, then that mentor would be doing you a disservice if they didn't charge you and get your to take action.
I took the class in Houston a few years ago. I gained some knowledge over the weekend, but like you, wasn’t ready to invest $20K into the mentor ship. From talking to people who were more involved both time and capital-wise than me, I found that they will give their members deals (acting as a wholesaler) and many of their bus tours and what-not (where you get the big 100 unit deals) is basically a collaboration of members buying other members properties. The initial group of members purchased low, rehabbed and are selling at a good enough price to make money, but one where the new members can also expect a modest return.
FYI I’m closing on a SFH deal in Milwaukee in the next week that cost me the same amount as those guys were charging.
Some people need that little push and guidance to get moving. - Some people can read a few books and decided to jump head first.
Whats the difference with the two? One is risk averse and the other is the risk taker. They both have the same dreams the only difference is they need different ways to get the ball rolling.
I would say if your willing to spend the money to learn from someone else and have a partner. I would make sure that you do your homework to make sure that this person isnt there to just use your money to make a quick buck. Get referrals from other people (not just one !) Find out what you both bring to the table. and make sure its a win win set up and your not just getting milked for everything you have.
My advice is to not go looking for a mentor per say. Start networking with people who are where you want to be in 5 years. I recommend going to REIA groups and start from there. Ask questions, ask for referrals to other people to talk to. think about what you can do for others. If there isn’t a REIA group that works for you, think about organizing a meet up targeting the people who you want to get to know. These steps will take you much further than any guru course.
Yes, especially if someone brings other things to the table that I can benefit from at the same time. Being in PM this isn’t an uncommon scenario since our job is to maximize assets for owners and that often involves educating.
I am not a fan of the high cost programs...usually over promise and underdeliver at a high price point.
@Michael Burks- What size deals are you interested in learning about? Buying a 3- family or something bigger like 75+ units?
#2 Mobile Home Park Investing Contributor
- San Antonio, TX
@Michael Burks Yes, these types of mentors exist. But they are few and far between. Most experienced real estate investors are pretty busy. In order to make a business relationship work, you'll need to bring something to the table. In many cases, it's time. But you also have to find someone who works well with your personality. And vice versa. The other option is to find a partner. You may want to check out your local real estate investment club for referrals and contacts. It will take some time to find someone to work with that fit the above criteria. But when you do, it's worth it. Good luck!
The guru program vs. self-education post again. I think I’ve seen a post like this a time or two here in the forums.
In my opinion, the answer to whether someone should do a guru program or not is much more circumstantial than principle. I think it has more to do with where you’re at now and where you want to be and how fast you want to get there mingled with your particular personality.
I started in REI in 2010 with one SFR. Then I found a mentor in the pages and audio books of Dave Ramsey and I stopped buying real estate and I started getting out of debt. I took everything he said as gospel and I started to hate debt and I didn't do anything else in real estate for the next 4 years (which were some of the best years in a long time to buy real estate).
Then my wife and I started watching one of those flipping shows and we thought that we could do it too. I asked a buddy who had flipped before if I could do a deal with him. He told me that I could be a hard money lender on his next deal coming up since I had some access to capital. The deal went well and I gained about 13k while he made around 45k with little of his own money into the deal.
After that win I thought that I knew what I was doing so I bought a house at the auction and flipped it for a loss of 5k. I partnered with another investor on another deal that made about 9k but it took forever (around 8 months and it was a simple rehab - new floors, paint, and some upgrades). So my first year I flipped 3 properties for a gain of 17k.
After losing the 5k on the second house, my wife signed us up for an education program that ultimately cost 75k for the program, weekly coaching, and mentorship. Obviously more than the 20k program that you mentioned.
During that year of education we increased our goals of what we thought was possible, started putting together a team, rather than trying to do it on our own and we ended up flipping 6 houses for a 95k profit.
Our third year we switched to a buy and hold model picking up 16 properties and increasing our net worth for my business partner and I 300k each.
The question is, was my education (guru) program too expensive? It depends on how you look at it. Because of the program I was able to magnify my goals. I went from wanting to do 4 deals a year to learning how to do more than 20 in a single year.
Could I have learned everything I have learned in the past 3 years by reading on BiggerPockets or checking out books at the library? Maybe. Could I have gotten there as fast? No. Would I have made more mistakes, probably. Would I have magnified my goals as I did, probably not.
The position my wife and I were in at the time allowed us to pay for the program and still have money or access to money to invest. Knowing my personality, having an education program to not only teach me but also to hold me accountable was important in my journey. Getting the most out of my money was also very important to me. So, knowing my personality, this was a good fit for me.
I don’t think a guru program is a good fit for people that do not have money over and above the cost of the program or for people who do better doing self study. Because I didn’t have any mentor offering to “show me the ropes” for free because they liked me and just wanted me to be successful like them, I paid for my education and it has paid me back several times over.
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#4 All Forums Contributor
- Lender
- Lake Oswego OR Summerlin, NV
Not sure if anyone mentioned it but there is a very simple answer to this.
HIRE a very good commercial Broker who specializes in selling MFR that's all you need they will teach you everything you need to know in exchange for you using them to broker the property your going to buy.
Now keep in mind the better ones are big money players and you will need to prove your a big money buyer.. to get the best brokers to work with you.
But thats all you need is a quality broker who has been doing it 5 years plus.. they will know everything there is to know about their product.. otherwise they would no longer be in business
- Jay Hinrichs
- Podcast Guest on Show #222
Originally posted by @Jay Hinrichs:
Not sure if anyone mentioned it but there is a very simple answer to this.
HIRE a very good commercial Broker who specializes in selling MFR that's all you need they will teach you everything you need to know in exchange for you using them to broker the property your going to buy.
Now keep in mind the better ones are big money players and you will need to prove your a big money buyer.. to get the best brokers to work with you.
But thats all you need is a quality broker who has been doing it 5 years plus.. they will know everything there is to know about their product.. otherwise they would no longer be in business
But what will they charge? It might even be more than the $20K mentoring program, right? You say yourself one needs to be a big money buyer to do this, in which case the $20K mentoring program would be peanuts. The overall theme of this thread is whether one should spend any money at all on a mentor.
I’m always happy to work deals in TX. Shoot me a message with more details.
Originally posted by @Jay Hinrichs:
Not sure if anyone mentioned it but there is a very simple answer to this.
HIRE a very good commercial Broker who specializes in selling MFR that's all you need they will teach you everything you need to know in exchange for you using them to broker the property your going to buy.
Now keep in mind the better ones are big money players and you will need to prove your a big money buyer.. to get the best brokers to work with you.
But thats all you need is a quality broker who has been doing it 5 years plus.. they will know everything there is to know about their product.. otherwise they would no longer be in business
This is the best post here so far. That's exactly what I did. Why spend money on a program when you can use it toward buying the property? Plenty of good brokers on this site. And if you don't want to get a property right away put down 50K to 100K into a syndicate with an experienced operator who is willing to show you what they are doing.
Mentorship programs offer mostly accountability, but I'm of the mind that if you are the type of person to need that type of hand holding you aren't going to be very successful anyway.
Originally posted by @Paul B.:
Originally posted by @Jay Hinrichs:
Not sure if anyone mentioned it but there is a very simple answer to this.
HIRE a very good commercial Broker who specializes in selling MFR that's all you need they will teach you everything you need to know in exchange for you using them to broker the property your going to buy.
Now keep in mind the better ones are big money players and you will need to prove your a big money buyer.. to get the best brokers to work with you.
But thats all you need is a quality broker who has been doing it 5 years plus.. they will know everything there is to know about their product.. otherwise they would no longer be in business
But what will they charge? It might even be more than the $20K mentoring program, right? You say yourself one needs to be a big money buyer to do this, in which case the $20K mentoring program would be peanuts. The overall theme of this thread is whether one should spend any money at all on a mentor.
Brokers make money when a deal closes, you are going to need one if you do MFR investing anyway so why not get the advice as a bonus?
Originally posted by @Jerry Shen:
Brokers make money when a deal closes, you are going to need one if you do MFR investing anyway so why not get the advice as a bonus?
Calling brokers and having them send you deals is free. But they are not actually mentoring you, are they?
My understanding (because I haven't done it myself, but I invest with those who do) is that big commercial brokers hardly even call you back if you're not already a player, especially when it's a seller's market.
@Paul B. has a point. This is a relationship business and credibility is key. If the cost of a mentor opens doors and builds your credibility, then ask this question to yourself. "Is the value of that credibility, knowledge, networking, and opportunity more than the mentor-ship cost? What is the opportunity cost of not having a paid mentor?"
Originally posted by @Jerry Shen:
Mentorship programs offer mostly accountability, but I'm of the mind that if you are the type of person to need that type of hand holding you aren't going to be very successful anyway.
That's an odd thing to say considering you did it by hiring Joel to hold your hands. And I'm sure Joel cost more than $20k as a buyers broker.
I have been a 100% commission sales consultant for the last 19 years. So, I value other people's time and understand why it would be hard to spend a vast amount of time teaching RE with nothing in return.
We joined and found out It was well worth the money we spent; a small price compared to what we gained, to learn and have mentors walk you through the process. It also helps as a new multi-family solo buyer to have the LU education backing you. Can you do this without LU or guru's? you bet! However, that wasn't the road WE wanted to take.
Programs like UL aren't for everyone, and yeah, I felt the same way as you when I went to the two day. But fast forward to today. After 2 years we have achieved a nice portfolio, and the money we paid when we joined two year ago was a drop in the bucket compared to what we have gained.
Wow. Tough crowd. Maybe because I am just getting started in Real Estate investing, looking for a mentor sounds like a great idea to me. Especially considering most of the successful people I have met have had mentors and 100% recommend them. They can save you so much time, energy and frustration.
Its a not a partnership. The mentee has limited knowledge and funds but wants to succeed and learn. The Mentor would be a guide. Not a free for all bucket of wealth. I myself would love to have a local mentor so I could learn from their mistakes and have a professional sounding board in a completely foreign field. Of course, it's a payable service. $20,000? Not upfront. Possibly later through partnerships and deals?