In our previous blog, we talked about the basics of what qualifies you as a real estate investor. Let’s take it up a notch. Suppose you want to be equipped with the maximum knowledge possible, and you want to acquire this knowledge fast. In other words, you want to effectively compete with grizzled real estate investors without spending too much time and making too many mistakes. Not to worry – in your real estate journey, you are likely to encounter many experts ready to unveil their secrets and let you learn by their, and not your, mistakes. However, it’s those experts who are charging a wazoo of money that I am skeptical about. Yes, I am talking about those real estate seminars that cost upward of thousands of dollars to attend and even those e-books from “gurus” with price tags over $100.
Let me explain why I have the right to be skeptical. I’ve been making my living in real estate and real estate-related financing services my whole professional life. Unlike many of those experts, I have a robust local real estate portfolio to prove it. I am growing my self-directed retirement account every day by investing it in fix-and-flip deals in Maryland, DC, and Virginia. Unlike those gurus, my story might lack panache: no extreme ups and downs, no “made millions then lost it all and then made millions again” scenarios. Steady success is a by-product of years of rational decision-making and steadily accumulated experience, but it might not be as exciting as “rags to riches” inspirational stories peddled by those real estate gurus.
So this is how I view the majority of what these real estate seminars market: an inspirational story on how to become rich quick. They can show how “you too” can get started with only $500 in your pocket. With their “proven systems,” “even a newbie” can make a $50K flip. They will teach you what software you need to dominate social media, design websites that awe and manage your vast real estate empire once you build it. Don’t you already feel successful and pumped up – even if you are yet to complete your first flip?
Those companies claim that their real estate seminars are crammed with useful information and practical tips on how to succeed. I don’t doubt that many of them are. However, here are my reservations:
Real estate is a local business.
We are experts in the Maryland, DC, and Virginia real estate markets. The fundamentals are the same anywhere, but I personally would be hesitant to invest in other markets that I don’t know so well. After all, what works well in Frederick might not work as well in Boca Raton or Las Vegas. No nation-wide seminar course can come close to being immersed in the local market.
Markets shift and so do the strategies.
How to source properties to flip is one of the main challenges facing rehabbers. Suppose you found a real estate guru to reveal to you (and the hundreds of other attendees) his or her marketing secrets. Would these secrets even apply to your local real estate market? If so, you are faced with the next question. If everyone willing to pay for this information is now using the same marketing strategy, would this strategy even be effective? I expect that the secrets revealed are of more general nature, having to do more with discipline, consistency, and perseverance than with specific tactics that work for a particular market at a specific moment in time. So, if you are expecting a big reveal that would make your vast profits, you are likely to be disappointed.
The course or the seminar you are buying is “packed” with useful information. If someone is a relative newbie, how much of this information he or she is actually capable of retaining? Let me give you an example. Suppose you want to learn how to build a barn. A simple structure to house your tools and your junk. You can get a detailed manual, watch some YouTube videos, and have buddies over to help. Alternatively, you can pay thousands of dollars for the course that will teach you how to be a builder. It will offer you information on building single-family homes, churches and condo developments. It would give you hands-on advice on how to comply with the regulation, avoid taxes, use green energy, choose appliances, and market to realtors. You are likely to emerge as a better conversationalist but – faced with nails and a hammer – still an inexperienced barn-builder.
If you love to learn and don’t mind paying for it, I am not here to tell you a real estate investment course isn’t worth your while. However, as a business owner with an eye for cost control, I do believe that much of the information you will get there can be obtained for free. Trust me, real estate investing is not rocket science. There are no earth-shattering secrets to success. Common sense, tangential experience with real estate and perseverance can be decent substitutes for experience. Save yourself money and put it where you always wanted to put it – investing in your first flip.
New Funding Resources is a hard money lender that funds real estate investment transactions in Maryland, Washington, DC, and Virginia. We work with flippers and those investors who prefer to buy and hold their properties as rentals. We work hand-in-hand with our borrowers to help increase their profits and manage their risk. And, unlike with those real estate seminars, our advice and expertise are free to our borrowers!
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