How is your goal setting going? I really enjoy looking back on the year and analyzing how I did and what I will be doing to improve. I also enjoy the exercise of setting goals for the new year. It is so motivating! Pine Financial hit our team goals for the second year in a row! We made it by one loan that Travis was able to get done right at the deadline. Thanks Travis!! We did over $65 million in loans.
It is exciting to see growth and I am proud that we are able to help our borrowers make money on their projects. It also feels great that we are helping our private investors make passive income. We paid out over $8,678,000 in interest to our investors in 2019!! Wow! Sean and Kim are both flying into our headquarters in two weeks. We will be sitting down to do some business planning and, because of the awesome team we have, we will be discussing our next reward trip. Cabo was great, what does the next adventure look like?
We are mixing up our Success Summits this year. We moved the Minnesota event to early in the year. We received feedback that people are just too busy in the fall, so we are going to try something new. If you are in Minnesota, mark your calendars for February 15th, for an all-day event focused on residential real estate investing. Tons of great speakers with no sales pitches, period. We are extremely proud of this event.
Come see why www.MNISS.com.Finally, it is sad to report that Charlotte has decide to leave Pine Financial to stay home with her daughter. She will be searching for new opportunities later in the year. I wish her the absolute best. She was a huge piece to our team and will be dearly missed. Check out a few photos from her going away party on our page.
With an ending comes a fantastic new opportunity. Justina started late in the year and was able to get some training in before Charlotte’s last day. She is making huge progress and fitting right in. I am so happy she applied and accepted the position. She has the passion and energy to help us grow in 2020!!
“Your net worth is equal to your network.” Or “It’s not what you know, it’s who you know.” I have no idea who originally said either of those famous quotes, but it was Zig Ziglar that said, “You can have anything in life that you want, if you will just help enough other people get what they want.”
I have written other articles about how important your network is, but I have not spoken much about my experience building that network through networking. It is a new year and time to get really good at a new skill. What if you focused on a skill that will make you a fortune? Here are five factors to focus on when you attend your next networking event.
Location, Location, Location: I am sure you have never heard that phrase. As real estate investors, we are taught early on that the three most important things in real estate are the location, the location, and the location. In networking, being in the right room is far more important than how you dress, your charisma, or your elevator pitch. Networking is marketing and hitting the right target is vital.
For me, raising money to fund real estate deals is essential, so I need to be in rooms with people with money. I network at real estate events, sure, but I also attend other investing meetings. Find the meetings where people will be that have what you are looking for. You can find many of these meetings on www.meetup.com, be sure to join our groups while you are there, but you should also ask around. There are several powerful networking groups that never get advertised on MeetUp.
Show Up Early: I know that you want to make your entrance. Growing up I was always told not to be the first to the party. Something about that was not cool, and I really wanted to be cool. The problem with showing up fashionably late is that you miss out on the best networking opportunities. Most people attend networking events to catch up with their friends, you are there to meet someone new.
You should want to be there before other people’s friends arrive and distract them. When people are not already glued to a click, it is easier to approach them. Not to mention, it gives you a chance to meet someone that you can later come back to as you move throughout the room. And it gives you more time to make the right connection. I see no downside to being early or on time.
Have Fun: This sounds simple, but it if you are not having fun as you talk to someone, you are likely not making a connection. I would suggest breaking away from the conversation and trying to meet someone you will enjoy talking to. If you are enjoying the conversation, it is likely that you have something in common. If you are not dominating the conversation, and you are generally getting to know someone, they are having fun too, therefore the chances of building a quality connection is high.
I also believe that if you are having fun you will be more comfortable, and you will likely be yourself. It will be easier to talk to strangers and you will have much more positive energy.
Although I believe it is important to have a goal in mind with what you would like to accomplish at an event, like meet someone who can wholesale a property or find a roofer, it can hurt your results to put pressure on yourself. It is hard to have fun when you are feeling pressure.
Focus on Value:As Zig says, you need to help other people get what they want. Many times, that is as simple and just listening to their story. Or, it could be making an introduction or sending them a referral. Or teaching them something they did not know. I am full on add value when I meet someone new. I want to get to know them and their business and see what I can do to help them.
I always ask for their card and never tell them what I do, or never hand them a card unless they ask.They almost always do. It is far more important to get a business card than to give one, and it is a turn off to be too into yourself and not interested in them. With this said, you will get asked for business cards, so be prepared. It is super awkward when you are networking and you don’t have cards, or you can’t find where they are. I would suggest making sure you have cards and always keep them in a separate pocket. Do not mix them with the cards you are collecting. I keep my business cards in my left pocket, I put the cards I am collecting in my right, and I separate anyone who showed interest in investing with me and put those in my back pocket.
Follow Up: Obvious, but often missed. The value is in the follow up. When I collect a card from someone, they go into my database and start receiving emails from me with quality content and invites to free events. Remember adding value? At Pine Financial, we never spam our listand our list performs well.
It is all about adding value and not applying pressure. If I get a card from someone that showed interest in what I am looking for, they get a personal follow up from me. Often it will be a call the next day or two days later. Sometimes it will be an email with more information on what they are looking for. From there, they go into my follow up system where they will get seven to ten personal touches from me. If we have not done business after that many touches, I assume they don’t want to work together, and I stop following up personally, but they remain in our database to receive our standard correspondence. You would be surprised with how many clients we have that were followed up with seven or more times before deciding to work together. Of course, they are happy they did.
I look forward to seeing you at the next networking event! “Real Estate Fever” . . . has hit the country like a plague. There are countless shows about flipping, renovating and buying houses. You can’t listen to the radio without hearing an ad for some guru in your market looking for people to join their “team”.Many “newbies” are getting into the game, trying to make big money in a short time. I meet them all the time, and unfortunately many are making big mistakes!
Mistake #1: Stock Market Mentality You’d think after losing $7 trillion in the stock market people would have learned! Nope, they are making the same mistake, which is assuming what happened yesterday will happen tomorrow. Nine of ten new investors I meet say they are interested in real estate because they saw someone else make money from the rapid appreciation of the market over the last few years. But, buying real estate solely for short-term appreciation is often a big gamble!
If you buy real estate to hold for 15 years or more, the chances are you will come out on top. If you buy a property and flip it in within a year, you probably are fine, too. And, despite the risk, many people can intelligently time the “boom” of a local market (or subdivision within a market) and make a profit. But, if you buy a rental property for full market price, to only hold it for a couple of years of appreciation, you’d better have a backup plan if the market doesn’t keep going up. Investing is a lot like surfing… if you don’t know how to ride the wave, you will drown!
So, should you refrain from investing if you think the market has peaked? Absolutely not! You can find bargain-priced properties in every real estate market, even the hottest. You can find low-interest rate financing that will increase your cash flow so if values drop, you still are covered. You can plan short-term (six to 12 months), because real estate markets typically rise and fall slowly. And, if you keep a cash reserve for your business, you won’t sweat when the market tanks, because you know that in the long run, real estate markets virtually always come back.
Mistake #2: Investing Blind I see this at least twice every single month. New investors blindly buying real estate based on bogus advice or complete lack of education. Real estate is one of the few investments in which risk is directly proportional to knowledge. True, it has a higher learning curve than investing in the stock market, but there’s no proof that having knowledge of the stock market reduces risk (just ask your mutual fund manager).
I read a comment on a real estate discussion group on the Internet. In response to an inquiry as to whether a particular seminar or training program was worth the money, someone answered, “Why waste your money on that stuff? Just use your money as a down payment and learn as you go.” While I partially agree with not paying a fortune for some seminar, I also think this is not good advice for a beginner. You need to educate yourself before making the leap into this. Money for real estate deals is easy to find if you can find good deals. But you won’t know what a good deal is without having first invested in your education! There are plenty of books, videos and local Real Estate Groups that you can invest in to get more education without spending all of your savings on one particular seminar. We host a great event each year in CO and MN for people to learn, network and get deals done in their local markets. Our MN Success Summit is coming upon Saturday February 15th! Find out more information and register here: www.mniss.comThe more knowledge of real estate investing techniques, financing, acquisition, negotiating and, of course, your local marketplace, the less risky your investments will be. A bargain real estate purchase will generally always be a safe investment.
Mistake #3: No Cash Reserves Ask anyone in real estate long term (or any other business, for that matter) and they will tell you the two most important words for survival are: “cash flow.” Even the big companies like K-Mart failed to learn that valuable lesson!
In order to stay in real estate long term, you need cash reserves. Buying real estate with nothing down is easy; handling negative cash flow, repairs and other expenses in the meantime is the trick. In fact, if you can handle the bad times, real estate will always make you come out on top. Lack of cash reserves puts unnecessary pressure on you to do substandard repairs, accept less than qualified tenants and give into tenants’ demands for fear of vacancy.
When you have a sufficient cash reserve, you act rationally. You hold out for a higher sales price. You hold out for a qualified tenant. You leave properties vacant rather than rent to substandard tenants. You call a tenant’s bluff when they threaten to leave. You take care of necessary repairs and improvements on your properties. It’s a whole different ballgame than operating from a lack of cash.
Like I said, buying properties with no money down isn’t hard; it’s handling the cash flow. In other words, you can buy real estate without money, you just can’t survive in business without cash reserves. Thus, consider accumulating cash reserves as one of the most important things before investing in real estate.
Mistake #4: Being Greedy Many investors get started wholesaling properties to other investors, which is a good idea to generate cash reserves. However, you must be realistic about how much profit is in a deal. If there is a potential for a $20,000 profit in a rehab project, you can’t expect to make $10,000 wholesaling that property to a rehabber. A rehabber has a huge risk in embarking in such a project and wants a large enough profit to justify the risk.
For example, if you find a deal with $20,000 in profit potential, how could you expect to get $10,000 for flipping the property if the rehab investor you flip it to is only going to make $10,000? You should be happy making a couple thousand and moving on to the next deal. If you want to make more than $2,500 on such a deal, then you must find and negotiate a better bargain that has more profit potential.
Another example of this is people lacking reserves to get deals done. Wouldn’t it be better to partner with someone on a deal to get it done vs having to pass because you wanted all the profit for yourself? 50% of something is better than 100% of nothing.
Mistake #5: Treating Real Estate as Anything Other Than a Business People are lured to real estate because of the quick buck that it promises. Don’t hold your breath, you won’t get rich quick. An “overnight sensation” usually takes a couple of years. How many people that take a seminar, actually get some deals done or become a success? I’ve spoken with people that host these seminars and teach people the basics of getting into real estate investing and they estimate that more than ninety percent of the people who take a real estate seminar quit after three months.
Why the high fallout rate? Lack of action and unrealistic expectations. Real estate investing should be treated with the seriousness of a career. It takes months, even years for a business to cultivate customers and have a life of its own. You need to treat real estate like any other business. Give yourself at least six months to see if real estate works for you. It may even take a year before you buy your first property. Maybe in the second year you will buy three or four properties. If you work hard at it and keep your eyes and ears open, you may even find your first deal in 30 days. Certainly, you will not make money by talking or thinking about it; you must go out and take action.
UNTIL NEXT TIMEWe want to thank you for helping make our 2019 a smashing success. I hope we were able to help you with your success last year. We are really looking forward to another successful and profitable year.