What Real Estate Mentors Won't Tell You

[Aaron Lietz]

As someone who has paid to go through multiple real estate training programs and mentorships, I'm curious to know your thoughts on what I have experienced, observed, learned, and discovered in the past few years. 

Here are some bullet points:

1.  Real Estate Mentorships can be great for speeding up your education in RE investing
2.  Real Estate programs can help build new profitable relationships that one otherwise would not have had (such as with successful people)
3.  Real Estate Mentors often will not tell you how difficult/saturated/competitive the industry is
4.  Real Estate Mentors often won't tell you how unlikely you are to succeed (similar to the music/entertainment industry)
5.  Real Estate Mentors will often talk down on corporate jobs, even though many corporate jobs have less stress and better pay than running your own real estate wholesaling/investing business (especially when those jobs are commissions sales jobs)
6.  Real Estate Mentors are highly incentivized not to tell the whole truth b/c it does not benefit their income to do so (i.e. - telling the whole truth would mean less mentees signing up for their $10k programs and therefore less money for them)
7. Real Estate wholesaling is similar to the music/entertainment industry in that there is a very low barrier to entry and only a few who will succeed (regardless of how hard he/she works)
   
   

Please note that I am not trying to be negative here. I am trying to be REAL (as I am someone who wants the TRUTH). If I am off the rails on any of these points please correct me and explain how. In my experience thus far (having gone through many mentor programs while also observing how most participants have very little success) I have noticed that RE mentors have a tendency to downplay any talk that would expose the fact that most of their 'students' not only will not have big success in wholesaling (for example), but cannot have that success. This is, again, due to the saturation of the market given the very low barrier to entry.

I recently did the math on a mentee that (on paper) had 'big success' with wholesale marketing/flipping in the state of New Jersey. This person showed that he and his partner had made over $650k in NET income for the 2020 tax year. Pretty good, right? Well, not according to my calculations. Here is the math I did: 

Net Income: $668,631 (13 flips/wholesale deals)
Split w/ partner: $334,315.50
Capital Gains tax: 35% x $334,315 = $217,305
Necessary 2022 marketing capital - 20% x $217,305 =
NET, NET take home - $173,844 per partner

In my corporate sales job I can make between $250-$350k (clock in, close some deals, clock out, and have full benefits). Is the above model worth it? From my view the answer is a clear "NO!" This is especially the case when I compare the work life balance I have now with that of a full time wholesaler/flipper (where they are essentially required to eat, sleep, and breath their business for multiple years with no reliable pathway to true financial independence - 7 days/week and 365 days/year). The way I see it, a corporate sales job can be WAY better than most RE mentors are willing to admit. 

What are your thoughts? Where am I off track here?