Networking with Seasoned Investors - Great for New Investors

by Bill Guerra

This article is for the new real estate investor who is trying to network and get to know seasoned investors. It's for anyone who's looking for an investor with some experience and success to "mentor" them.

What is a Seasoned Investor?

Quite simply, a seasoned investor would be someone who has bought and sold, repaired or rehabbed or wholesaled several houses - one who pretty well knows the ins and outs of real estate investing. This is just the type of person many new investors are looking to learn from.

Just the type of person you want to learn from, right?

So, you want to find someone you can wholesale deals to? Someone who will show you the gold mine areas for houses, allow you Multiple Listing Access (MLS) and give you the security of knowing they can close and pay you on your house or flip it in 5 business days? Maybe you want to take the seasoned investor out to lunch - heck, you'll go so far as to buy lunch!

What's Standing in the Way?

Well, most seasoned investors are great to know and together you can make a lot of money. However, these investors often elude the new investor. Is it that you are intimidated by their vast knowledge and experience, or maybe they are initially just too busy to catch up with? Whatever the reason, a seasoned investor is great to get to know, but one important thing to understand is that this kind of relationship can't just "happen" overnight.

First, it's a given that seasoned investors tend to be pretty busy people. They run usually a small business, where they are busy managing, advertising, and bookkeeping - or managing those that do. Outside the office, they are driving around all day looking at properties, running crews, dashing to Sam's Club buying new printers and problem solving with staff, realtors, and their title company. This of course, is in between trips to Home Depot or Lowe's where they scour the isles looking for that one elusive item.

During all this, there are rehab crews waiting and the seasoned investor is constantly feeling pressure, pressure and more pressure as the cost of labor is expensive, especially when the crew waits around!

What I have found in the Las Vegas area is that most seasoned investors are 30 or more years old with families. They are busy with family life such as taking kids to practice and trying to maintain a social or spiritual life with family and friends. Maybe at the end of the week, they can carve out some oh-so-precious time all to themselves.

So yes, they are busy. Very busy.

How I Tried to Find A Seasoned Mentor (and Failed)

When I began I simply assumed that a seasoned investor would spend time with me as they realized I would bring them great deals, and because I was serious about this business.

It seemed like a fair trade to me - their time and expertise for my house deals and soon-to-be house deals and endless (but sincere) questions. And if I'd offer to meet them for lunch and actually PAY for it, well then the sky's the limit, baby!

I mean, who could turn that down?

Well, my dream was to have many house deals but it was only a dream at that time. And one thing I didn't really understand was that these busy investors often have lots of wide-eyes tenderfoots, just like me, calling and emailing them for their time on a regular basis. And even the most generous of people must begin to say "no" to the "good" for the sake of what's "best".

"Why Are They Avoiding Me?"

As time went on and I tried again and again to pursue these kinds of relationships, slowly I began to get it. The reality of the seasoned investors' world and the natural time constraints included, became more and more apparent.

And as I began to do more and more deals, an interesting thing started happening. I actually started having new investors who started calling me, wanting to take me to lunch! Can you believe it?

So what did I do? I gave graciously of my time, for I was surely not going to selfishly limit myself same way that some of the old-timers did to me when I was new. I was going to give of my time and expertise freely. Humph!

I would tell each new investor, "I will help you along, and then you can offer me your house deals first over other investors." And they of course, readily agreed.

So as the new investors would call, we would "talk shop" and I'd answer their many questions, answer their emails and even run comparables (comps) for them on their prospective deals. If needed, I would even stop what I was doing and perform skip traces to find their missing sellers (Deb is great, she can find a needle in a haystack nationwide.)

Sometimes I would take them to my best areas and subdivisions where I found deals - my gold mine areas. Other times, we would get lunch and I would listen and encourage them in their hopes, challenges and dreams.

Yes, we were off to the races! Until...

The Other Side of the Coin

I started noticing a disturbing trend. I started getting calls from my "apprentices" notifying me that they were fed up with this real estate investing thing, couldn't make it work and were ready to throw in the towel.

At first it was only a few of them. Then a few more. And eventually it seemed that about 95% of them were suddenly on their way out the door. Some said they were going back to college, while others were getting a nine-to-five job and so on.

It was then that reality hit me. I began to realize that most of the newbies had stars in their eyes and wanted to get rich quick, or were looking for an easy out from college. The older ones often had too many battle scars and couldn't seem to get up again, due to some past experience. It's tough to say, but true to form.

So where did that leave me...the now-seasoned investor?

Honestly? Frustrated, let down and occasionally angry. And yes, burnt out with newbies. After all, I'd graciously invested hours and hours of my time, not to mention a good deal of mental energy and focus into helping these folks take steps toward the real estate investing dream they'd seemed so passionate about before. And now it was all for naught.

Then I would read in the real estate forums, "How do I find seasoned investors to work with?" - And often spoken with almost an air of entitlement.

Now I Get It.

Now it all makes sense. Now I really and truly understand why I had such a hard time getting on the "inside" with these guys and why so many others do as well. And that my friend, is why I wrote this article for new investors like you.

There's no doubt at all that the seasoned investor has a LOT to offer the budding newbie. They have great real estate software, MLS access, cash and experience. They offer great resources, knowledge, have title companies and realtors in their back pockets, and know the other seasoned investors. They possess all the tools of the trade that anyone new desires. It's all about how to talk to seasoned investors.

Furthermore I can say without hesitation the seasoned investors DO want new investors to bring them good wholesale or birddog deals. Believe it or not, they are looking to make new investor friends.

So what do you do to ally with these guys? How do you get "on the inside" with them?

How To Get A Seasoned Real Estate Mentor...

1. Do your homework and don't be lazy about it. Study and learn the areas, types of houses, cost of houses you will make offers on and basic costs of repairing the rehabs.

2. Then drive for dollars to find a house. Driving for dollars means driving around a subdivision looking for abandoned or boarded-up houses and locating the owner. Do your work or research on the house.

3. Invest some of your own time, effort, blood and sweat on the front end to prove that you're not just looking for a free ride or a cow to milk. And by this point, you should be able to talk to a seasoned investor and compare apples to apples with the experienced investor.

4. Know enough in advance to be able to determine fairly well if there is even money in the house before you call him.

5. See who owns the property and find out if it's possibly a motivated seller. Or is it owned by a realtor, county owned or does another investor own it? If it's the latter, you may decide not to waste your seasoned investor's or your time going after it.

6. Next, continue to do your homework and attempt to contact of find the owner/seller.

7. Now, when you call the salty investor, try saying something like this;

"Iggy Investor, I have a 3 bed 2 bath boarded-up 1500sf single family. Cross streets are Jones and Bethany. Owed is $30k, comps at $170k. I have done research and can't find the sellers. Want to grab a cup of coffee and see if we can get it?"

Now, doesn't that sound better than the old "let's grab some lunch, so I can pick your brain" approach? Honestly I cringe when I get that line from a new investor I just met.

Why doesn't that work? It's simply because it's a one-sided relationship, all give on the investor's part and nothing from the new investor except his or her dreams of what they may or may not do.

You should start by GIVING well before you even try to receive anything. You need to ask yourself, "What can I do to EARN this relationship, and all the powerful benefits that could come along with it?"

Don't Think About the Money

Notice in the hypothetical conversation above, I did not mention wholesale or birddog. One thing a seasoned investor taught me a long time ago was to forget about me making money. That's right! Get my mind off my pockets initially and see if I could birddog. Not even do wholesale, but just birddog. When I would "dog some properties" to show my willingness to help make him money, they would take more time with me.

Trust me. The first 15 houses I bugged my seasoned investors with were definitely not deals. And by "bugged" I mean they took precious time out of their day to look at my no-deal houses. Of course, the next hundred or so were definitely worth their time, but initially it was more like wild goose-chasing on their part for months.

I hope this makes sense and that I've been able to help you look at the "mentor" relationship from the flip side of the coin. If so, then you will have a much better chance of making a new strong profitable relationship with seasoned investors.

Don't be afraid of these relationships. They're well worth pursuing, and can really take you to the next level when they happen. But don't start off feeling like you somehow deserve them. You don't. The only thing you’re really entitled to is the same school of hard knocks we all have to learn from.

But if you can earn the respect of a seasoned investor or two - by truly adding value to their business FIRST - then you'll likely find some delightful short cuts to your learning curve as an investor.