"Networking" ISN'T a Four-Letter Word

During a recent lunch with a handful of alumni from my alma mater, I mentioned how important networking had been in finding my current position with a large corporation that receives hundreds of applications for each job posting. One gentleman in the group gave me a puzzled look and said, "From our discussion, it seems like you've worked hard for what you have. Why do you attribute it to networking?"

This question confused me, but as I dug further, I realize that this man thought I was saying that I'd "schmoozed" to get where I wanted to be. He heard "networking" as a four-letter word that suggested cozying up or brown-nosing so that people in charge might give me positions and power that I didn't actually earn. Once I realized this perception, his question (and the hint of disdain that came with it) made much more sense, and we had an interesting conversation about the right way to network, and the benefits that come with it.

It occurred to me that a lot of people misunderstand networking... they either underestimate it's importance, or they go about it the wrong way. And in a people business like real estate, being bad at networking can be fatal. So let's examine what networking is, and how to do it well.

The Definition of "Networking"

The Merriam-Webster definition of networking is:
"the exchange of information or services among individuals, groups, or institutions; specifically: the cultivation of productive relationships for employment or business"

Compare this to the Merriam-Webster definition of schmoozing:
"to chat in a friendly and persuasive manner especially so as to gain favor, business, or connections"

To me, these two definitions are worlds apart! The definition of networking describes two-way exchanges of value, over a long period of time, that result in solid relationships. The definition of schmoozing basically sounds like a slimy character in House of Cards trying to climb the political ladder. And if you're familiar with House of Cards, this character will probably fail at schmoozing and resort to blackmailing someone! Schmoozing and blackmail makes interesting TV drama, but I don't suggest any of it in your personal or professional life.

So, while these words may seem synonymous to many, the distinction between "networking" and "schmoozing" is clear and important. Especially in the world of real estate, which we all know is a people business! So how can you apply a clear understanding of networking to find success in your real estate endeavors?

How to be a Good Networker

There is a ton of great content on BiggerPockets on this very topic from investors with far more experience than I have. However, as a newer investor, I'm in a great position to help others understand how to get started. In the past 6 months, I've made some valuable connections with real estate agents, wholesalers, attorneys, lenders, and fellow investors. Here are three things that I've found important in real estate networking:

1. Do your homework first!
I can't stress enough how important it is to do some research before you go out and start asking questions. If you're reading blogs on BiggerPockets, you're probably already working on this! However, even on BiggerPockets we all see forum questions from people who obviously haven't taken the time to look up a few basics. Yes, networking can help you find answers from professionals and experienced investors. But if you try to start asking questions before you've done enough research to know the basics, you probably won't be asking very good questions. And worse, you'll come off as someone who isn't willing to put effort into their own education. What busy real estate investor wants to waste their time answering questions that could be answered through a simple search on Google or BiggerPockets?

So how much research should you do, and how do you know when you've gotten to the point where you have good questions to ask? Obviously, there's no easy answer to this. However, I think if you do some general real estate "homework" each day (listening to podcasts, reading blogs, etc.), and make it a priority to look up your questions online before you ask a new contact, you're a lot less likely to ask the questions that make some newbies look silly or lazy. I believe anyone can have a really good grasp of the basics by doing just one hour of "homework" per day, and that basic understanding will set you up to have more productive interactions when you network.

2. Take your time.
What's another theme we all see with new real estate investors? Jumping right to an ask instead of building a relationship. This is NOT the way to long-term success. Slow down, and start at the beginning... with a simple introduction and genuine interest in getting to know someone and what they do. It takes time to build the type of trust that you need to have productive working relationships in real estate.

My favorite way to approach a potential new relationship is to introduce myself with a quick elevator pitch about my strategy and goals in real estate, and then I ask my contact about theirs. I expect that we'll chat back and forth for a while, whether in person or via emails, about our experiences and where we're heading next before we ever start talking about how we could work together. It gives us time to build trust, and the conversation helps us understand whether we'd work well together. A great resource for learning about how to build solid relationships is Dale Carnegie's book, How to Win Friends and Influence People. You can also find plenty of helpful blog posts here on BiggerPockets about networking and developing your own elevator pitch, like this one from Brandon Turner.

3. Give first, then receive.
Closely related to point 2 is the idea of giving before you expect something back from a contact. I am constantly seeing forum posts on BiggerPockets from people asking for mentors or money or leads, and those posts rarely get much feedback. Why? Because who out there wants to enter a lop-sided relationship with someone who wants to receive without having anything to give in return? What busy real estate investor in their right mind would sign on to hand out free wisdom to a newbie who hasn't done their homework or tried to build any sort of relationship first? This doesn't mean you can't ask for help or advice, it just means you have to work up to it.

So how do you give first, especially if you're new and still learning? There are plenty of ways! Did you just read an awesome blog post from an experienced investor? Reach out to them to tell them how awesome it was and strike up a conversation about what you learned from it. You'll be giving that investor validation for the hard work they put into their post, and hopefully some interesting discussion as well, and you may receive some valuable advice in return. Is there someone in your local community who you'd like to learn from? Offer to take them to coffee or lunch. They'll get a free meal and a conversation with someone who shares their interests, and in return you might build a relationship that can provide some long-term benefits as you build your business. Want to trade notes with other investors in your area? Organize a BiggerPockets meetup for local investors in your city. Everyone who attends will have the opportunity to expand their network and learn from peers in their area, and you'll get to enjoy those benefits as well.

My Networking Wins

There are so many ways to become a better networker, but I focused on these three because I've found personal success with them in just the past six months. It was because I'd done my homework and could speak intelligently about the fundamentals of real estate investing that a real estate attorney I met referred me to a private money lender. That private money lender decided he'd be willing to lend to me as soon as I find a property because I was referred by someone he trusted, and our conversation proved to him that I understand the basics.

I also took my time getting to know a local agent and property manager, and building a relationship so we both felt confident working together. It took five months before I acquired my first multi-family rental property through him, but I went into that deal feeling confident about the area, the numbers, and the property management options he could provide. He gets paid to represent me in purchases and to manage my property, and I get monthly cash flow!

Finally, I set up a BiggerPockets Happy Hour in my city of St. Louis, and we've had two really great meetups already. We have decided to make it a standing monthly meetup because of the valuable conversation... and who knows what kind of partnerships could form within that group in the long run?

I'm excited to keep building these relationships and find out where they'll take me! I encourage all new investors to consider the importance of networking the right way in real estate. Networking isn't a four-letter word... it's vital to your business.