At the beginning of their careers, all real estate investors do similar things.
They learn the market, understand how to use various financial metrics to find rental property with good potential, and develop a system to keep the deal pipeline full. However, after a short period of time, only a handful of investors rise above the rest while leaving the others behind.
There can be a variety of reasons why some rental property investors are more successful than others. But one thing they all have in common is a real estate mentor.
In this article we’ll explain why having a real estate mentor is so important, what you should and shouldn’t expect from a mentor, and how to find and keep a real estate mentor that’s right for you.
What is a Real Estate Mentor?
Think of a real estate mentor as an advisor or trainer. Usually, but not always, a mentor is older than the protege – also known as the mentee, or the person being mentored.
A good mentor will offer advice, feedback, and guidance. But, don’t expect a mentor to teach you everything they know about real estate and business. Mentoring is a process that develops naturally and takes place over the long term.
Reasonable expectations for your real estate mentor relationship
- Core values of your mentor should closely match your own.
- Mentor and protege should have similar passions in life and business, because in real estate investing the two are often intertwined.
- Investment strategy and style should be the same, otherwise the guidance and advice you receive won’t be nearly as useful.
- Give your potential mentor a good reason to invest their time and knowledge in you, because the best mentors are very busy people with a thriving real estate investment business.
- Expect the mentor relationship to add value for both parties in one form or another, creating a win-win situation for both mentor and protege.
Myths about real estate mentoring
- Just be patient and sit tight, and you’ll soon be “discovered” by a mentor. Instead, you’ll need to proactively seek out the right mentor for you.
- Mentoring is a one-way street that’s all about you. In fact, mentoring works both ways, with both the mentor and protege giving as much as they receive.
- Asking straight-out to be mentored and being told yes. In the real world, mentoring develops over the long term with both parties ‘testing the waters’ to make sure the mentor relationship is right.
- Expecting to be taught outright by a mentor. Sometimes, but not often, a mentor will tell you “yes” or “no.” But that’s the exception and not the rule. A good mentor will help you learn from your mistakes, because experience combined with the right guidance is the best teacher.
Why Do You Want to Be Mentored?
Now that we know what to expect and what not to expect with a real estate mentor, let’s take a step back and ask why you want to be mentored. Begin by asking yourself a few questions:
1. Why are you investing in real estate in the first place?
Maybe it’s to flip homes or wholesale, or to build a cash flowing portfolio with passive income or to invest in rental property long distance.
There’s not a right or wrong answer to this question. However, be sure you understand why you’re investing the way you do, so you can search for a mentor that can offer what you need.
2. What level of success do you expect your real estate mentor to have?
Success is a relative term that means different things to different people.
That being said, it’s important that you’re comfortable with the success level of your mentor because they are someone you will emulate and who will set the bar for your own future development over the coming years.
If you’re not 100% convinced that your mentor can help you get where you want to be, you’ll be better off looking elsewhere instead of wasting your time and theirs.
3. Will you respect your mentor - and vice versa?
If you have doubts about the capabilities of the person mentoring you, you’ll begin second guessing everything they do and say. Before you know it, you’ll be back to square one - right along with your real estate investment business.
Of course, respect is a two-way street.
When a mentor begins to think he’s wasting his time, you won’t receive his full attention or best guidance. So, make sure that there’s mutual respect between you and your mentor before you begin working together.
4. What kind of a risk taker are you?
Nearly every investment comes with a certain amount of risk - and investing in rental property is no exception. The key is to successful investing is to find ways to minimize risk while maximizing reward.
For example, many buy-and-hold investors focus on income-producing property that provides consistently strong and relatively predictable cash flow over the long term. Of course, there’s the risk that a tenant may vacate unexpectedly or rent growth may be flat over the short-term, but the longer holding period helps to minimize these shorter-term risks.
Your mentor should have the same risk profile personality as you do.
If your mentor craves the Las Vegas-like rush of fixing and flipping homes while you’re more focused on building a portfolio of rental property producing passive income, you’ll very likely end up not respecting each other since you don’t have the same investment philosophy.
Tips for Finding a Great Real Estate Mentor
Successful investors can come from all walks of life. But one thing that all of the great athletes, politicians, business-people, and of course real estate investors have in common is that they’ve all had a mentor.
There are people who make careers out of being “mentors for hire." They offer professional training, coaching, and mentoring sessions for thousands of dollars in exchange for an hour or two of their time.
Fortunately, there are plenty of ways to find a great real estate mentor without breaking the bank:
- Local investor networking events are great places to rub shoulders with people that have already been there and done the exact same things you’re hoping to do.
- Tap into your existing network of real estate brokers, lenders, contractors, and title companies who already work with other successful real estate investors and ask for recommendations, then arrange to meet each potential mentor in person to see if there’s a mentoring match.
- Invest in a JV (joint venture) as a minority partner, then do awesome work that attracts the attention of the more experienced investors to give them a reason to want to mentor you.
- Financial planners often invest in real estate or know other high-net worth individuals that do invest and are usually more than happy to create good business by referring you to another one of their clients.
- Learning programs such as the Roofstock Academy give you everything you need to take your investing business to the next level by leveraging the experience and knowledge of investors who have created a repeatable process for analyzing, acquiring, and managing rental properties.
What to Look for in a Real Estate Mentor
Selecting a real estate mentor isn’t a one-size-fits-all approach. The right mentor for one investor might be completely wrong for another.
Here are some of the things to look for in a real estate mentor to help choose the one that’s best for your needs and goals:
- Understand your investment objectives and financial goals to advise you on the best options for financing, protecting cash flow, or adding value.
- Familiar with analyzing rental property using key investment metrics such as cash-on-cash, yield, cap rate, IRR, and net cash flow.
- Knows real estate tax law and understands how to reduce taxable income with rental property expenses and depreciation deductions, and how to defer paying capital gains tax by conducting a 1031 exchange.
- Specific knowledge and insights into the asset class, markets, and tenant profiles to help guide you in choosing the most profitable investments.
- Holds you accountable for meeting your goals and achieving your desired results and is willing to be held accountable in return.
- Has good people skills and strong personality traits like patience, honesty, positivity, encouragement, good listening skills, and high ethical standards.
- Ability to teach what they know by using great communication skills, a structured system for mentoring, and a passion to educate in exchange for your passion to learn.
As the saying goes, “knowledge is power," and the more you know the more you’ll earn. In the real estate investing business, success is based on both what you know and who you know.
Having the right real estate mentor can help you achieve both. Mentoring is a give and take relationship, one that’s built on a variety of factors including respect, trust, and accountability.
When you’re looking for a real estate mentor keep these things in mind:
- Understand why you’re investing in real estate.
- Core goals and investment strategy of you and your mentor should be the same.
- Real estate mentoring is a give-and-take relationship that develops naturally and takes place over the long term.
- Mentor should have the ability to teach you what they know and provide the guidance to help you learn by doing.
Online interactive training programs like the Roofstock Academy provide a quick and easy way to leverage the knowledge and experience of successful real estate investors.