Looking for helpful advice for coaching

Looking for helpful advice for coaching

Shiloh LundahlPro Member
Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes

Let me give a brief background for the context of my question.

I’ve been investing in real estate for the last 14 years but more actively for the last eight years. During that time, I built up a portfolio of 250 doors with a business partner. This portfolio consisted of around 80 single-family homes, some mobile home parks, a commercial building, some multifamily, and some luxury short-term rentals.

I started getting a lot of people reaching out to me and asking me questions about real estate and if I would help them learn how to invest. In 2018 and 2019 I started coaching people on how to invest in real estate. The way that I set up my coaching program helped around 80 to 90% of my coaching students buy real estate and increase their net worth by between $30,000 and $500,000 during the year that I coached them.

I tried to make the coaching program really affordable and based on psychological principles of motivation. The way I set up the program was that I would have the coaching student pay me $5200 upfront for a year-long coaching program of 26 phone calls every other week. I would give them homework to complete in between the phone calls and if they completed the homework they could earn back half of their coaching fee, making the coaching program only $2500. Then after doing that for a while, I raised the fee to $10,000 with the ability to earn back $5000 of the coaching program if they completed all of the homework assignments.

Coaching real estate has just been a side gig that I’ve done for the last couple of years and I’ve had anywhere between one and five coaching students at a time, but I’ve helped over a dozen people increase the net worth substantially during the year that I coached them

So here’s the question: One of my mentors recently shared with me that I am selling myself short as a coach and that in addition to charging the upfront fee, I should also write into the coaching agreement that I get an equity steak in the deals that I help my coaching students get during the year that I coach them. It would be a partnership agreement on their deals where I would get paid out 25% of the profits at the time of sale or refinance.

I have never set up a deal when I would get some of the equity of my student’s deals before and I’ve helped several of my  students increase their wealth over $100,000 during the time that I coached them. Do you think that creating an agreement where I would gain 25% of the profit of the deals would make people not want to get coaching from me or do you think that they would still want to get coaching because of the value they get from learning how to build wealth in real estate? 

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  • Real Estate Agent · Stroudsburg, PA · Member since 2024 · 17 posts · 7 votes
    1y

    Hi Shiloh!

    This is such an awesome story to hear, and I really admire the way that you are looking at your coaching program from the perspective of how you can help others and do what you love, while keeping the program accessible and affordable. 

    To some entities, who put their top value at their coaching practice as profitability (which is of course okay, 90% of businesses are profit first-it's the norm!), it is also okay for you to explore what you value most form your coaching. 

    Do you get the most value out of the money you make? Maybe the freedom or ability to reinvest that it provides you?

    Do you get more value out of building up others? Does that invigorate and inspire you?

    Do you get value out of business and client connections and referrals? And is it more valuable than the upfront/ cash or equity you could gain?

    Not a straight answer but I hope these questions can help you find the answer for yourself! You are only short selling yourself if you are giving more to this coaching program than the value you get back from it. That is a question only you can answer, and remember value is not only monetary. 

    Hope this helps! 

  • Travis TimmonsPro Member
    Rental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votes
    1y

    The whole point of making it is to get to a place where it does not matter if you are getting your full market value or not. I don't love the 25% stake. Are you going to cut them a check for 25% if they lose money on a deal? It just gets messy. 

    If you love it and are looking at it as a way to give back, keep your fees low and select students that you really want to work with over the long term. If you want this to be a real business, test out pricing levels to see what the market will bear. If it were me, I'd rather make less money and carefully choose who I want to coach. 

  • Shiloh LundahlPro Member
    OP
    Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
    1y

    @Autumn Cain thanks for your reply. And I think there’s a lot of wisdom in that. 

    For me, I have a finite number of hours that I can devote to creating an income for my family. I’m a very busy person with a lot of businesses and tasks that need to be done. Anytime I take on one task it takes away from my time at a different task.  so even though I enjoy coaching, I can only justify doing it if the income from the coaching justifies hiring someone else to do another one of my responsibilities. I’m not at a place where I can altruistically give my time without trading it for income.

  • Real Estate Agent · Stroudsburg, PA · Member since 2024 · 17 posts · 7 votes
    1y

    @Shiloh Lundahl

    I see! That totally makes sense, thank you for sharing your feelings on coaching! Based off of that:

    Why Equity stakes may make sense for you- your track record speaks for itself and should incentivize your students by the results that you have proven they can achieve alone. This creates a potential passive stream of income and a way to extend the lifespan of your coaching investment which seems awesome for your business model.

    Example: Ryan Serhant, advocates profit sharing (equity stakes) in deals that his coaches help close which takes you from coach to partner, and a model proven successful.

    Client View: Positioning yourself as a partner to their operation is a way for the client to understand your investment in their outcomes outside of the dollar signs involved, and shows them that you are coaching them in a way that provides long term success. As much as equity sharing is profitable for you, it is also a way to show your clients “Hey I am here for your success as much as you are, and I have a personal investment in you” which is an incredibly inspiring model.

    I would however say maybe scale your equity based on the current state profit margin of your client, or even work in a sliding scale so it doesn’t turn off potential clients who may be at a slim profit margin as is and are concerned about it getting any slimmer. Maybe make equity sharing an option that offers a lower upfront fee.


    Reference:
    (You may have read it already but if you haven’t I would recommend checking out Dan Sullivan’s videos/media). Also if you wonder where you fall compared to other coaches “A 2019 survey by the International Coach Federation showed that real estate coaches often charge high fees because of the tangible ROI their clients can achieve. Profit-sharing in the 20-30% range is also common in situations where coaches play a key role in creating wealth through property investment.” (ICF Global Coaching Study (2019): Rates and trends for coaching in high-net-worth areas.)

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    1y

    I think you could have some really messy accounting issue trying to figure out 25% of net profit.   Only way I would do that is to pick a number and record a deed of trust with a note so that U get paid..

    great job on your coaching..  as you know I have done equity share in my lending bizz for many years it works well if the deals are working well.. :)  but my equity share is controlled via debt or direct ownership. 

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