This is an article from Anton Ivanov, long-time reader and fellow blogger with an interest in real estate and online entrepreneurship Here’s Anton…
You can invest in the stock market without meeting or knowing a single person. You can research, buy, manage and sell your equity investments online in the comfort of your own home. Unfortunately, you cannot do so with real estate. If you want to be a successful real estate investor, you need to embrace and master the art of networking.
Building, managing and using your real estate network is so important, that I believe it should be the first thing you learn how to do when you are just getting into real estate. I hope this article puts you on the right track.
Why You Really Need to Network
Buying property is a much more complex process than buying stocks. First, you need to find deals. Sure, you can scan public listings online, but chances are that’s not where you will find the best deals. Having a good relationship with several realtors, wholesalers, attorneys, court officials and other investors can give you access to great deals you would otherwise miss.
Once you find a great property, you need help from several people to actually close on the deal. You will likely need a lender, realtor, inspector, title company representative and an insurance agent.
If your property needs a lot of rehab work, you will need a team of contractors. Furthermore, you will probably want to hire a property manager to manage your rentals, especially if you plan to own multiple units in various locations.
And finally, when you are ready to sell the property, you will need many of the same people to help you find the right buyer and sell at the best possible price.
If you try to invest in real estate by yourself, I can almost guarantee that you will not be successful. The sooner you realize how important networking is, the faster you will put together your support team and the more successful you will become.
Building Your Essential Support Network
I first learned about the importance of real estate networks from The Millionaire Real Estate Investor by Gary Keller, Dave Jenks and Jay Papasan, which I think is a must read. The advice in this book was invaluable and helped me do four successful real estate deals in the last four years.
The first network you should focus on building is your support network. These are the people that will be your mentors, your sources of information and advice, and the ones who will actually help you make deals happen.
The obvious members of your support network are a good realtor, attorney, lender (depending on how you want to finance your deals, this can be a bank representative, mortgage broker, private money lender or hard money lender), inspector, title company representative, insurance agent, contractor(s) and a property manager. These are the people that will be directly involved in helping you find, close, manage and sell your properties.
It is perhaps somewhat less obvious, but definitely not less important to include other real estate investors in your support network as well. They can be a great source of information and practical advice. With time, some of them may become close friends, mentors and partners, helping you with every step of your real estate journey.
Creating a Network that Generates Leads
One of the hardest parts of investing in real estate is finding great deals. This is especially an issue in tough markets (like my local San Diego market) or when you begin to ramp up the number of deals you do per year.
But in many situations, the MLS will not be very effective at helping you find great deals. This is where your leads network comes in. These people have access to real estate deals or motivated sellers that are not otherwise found in public listings.
Your leads network should include wholesalers who specialize in finding deals for investors, divorce or bankruptcy attorneys who may know motivated sellers in need of selling their property, court or bank officials who can give you access to foreclosures or REOs, and local investors who may give you deals they are not willing to take advantage of themselves.
4 Ways to Start Building Your Real Estate Network Today
Everybody approaches networking differently, so what works for me may not necessarily work for you. Here is a list of ideas you can use to expand your support and leads networks:
Bigger Pockets: Bigger Pockets is the largest and the most helpful online community of real estate investors. Besides having a great blog and many helpful guides and resources, they have a huge real estate forum. You can fill out your Bigger Pockets profile and connect with other investors and professionals in your area or across the United States.
Local Real Estate Clubs: unless you live in a very remote neighborhood, there is probably at least one real estate club in your area. They typically meet once a month and are a great opportunity to get to know other investors and professionals and learn something new from their presentations and lectures. Bigger Pockets has a huge directory of US RE clubs listed by state.
Chain Networking: I don’t know if anybody else uses this term, but I find chain networking extremely helpful. All you have to do is ask each person you meet for 2-3 new references to other professionals or investors. When I was first starting out, this helped me the most because I would get references to the next people I needed on my real estate team from the ones I have already met.
Web Search: I would say this is the least effective networking method, because it is less personal and effective than direct referrals or actually meeting people in-person. But if you are having trouble expanding your network or finding a specific type of processional, try searching to see what comes up. Just make sure to interview each person and look up his or her reviews before doing any business together.
Successful real estate investors understand that they cannot approach real estate investing alone. If you are just starting out, networking is a great way to not only learn more, but also to put together your team that will help you become a successful real estate investor yourself.
Are you thinking of getting into real estate investing? Do you already know of some people to add to your network? Experienced investors, how did you setup your network?
Anton Ivanov is a self-made millionaire, money coach and founder of Financessful.com. His mission is to help people grow their wealth, reach financial freedom and live a better life. You can follow him on Facebook, Twitter or Google
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