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SHOW NOTES FOR EPISODE 208: ASK BILL! FINDING SMALL RENTALS AND FINDING REAL ESTATE INVESTORS
This is our monthly Fun Fact Friday “Ask Bill!” episode, where Bill answers specific real estate investing questions received during the month from e-mails, in-person conversations, phone calls or through online portals such as BiggerPockets.com and Quora.
It seems that real estate investors are always looking for something. If it isn’t properties, funding and tenants, it’s investors, partners and deals. In today’s monthly Ask Bill episode, Bill answers questions from two different people looking for something. One is seeking small rental units. Another is looking for real estate investors.
Question #1 – I am about to retire within a month or so. Where or how can I find small rental units? How did you find your first rental unit?
Bill’s Answer to Question #1
Great question! Getting started in real estate investing can be a an outstanding way to supplement your retirement or just generate a good return on your existing retirement funds.
I think most investors think, “OK, I’m going to be a real estate investor, I need to find some properties to invest in.” I did the same thing and I’m sure there are plenty of people listening who did that as well.
But, really, BEFORE you buy anything and before you do anything else, you must thoroughly understand your “Why!”
What do I mean by your “Why?”
Simon Sinek, a British-American author, motivational speaker and marketing consultant, wrote a book in 2009 called Start With Why: How Great Leaders Inspire Everyone to Take Action.
In the book, he asks the question, “Why do you do what you do?”
Why are some people and organizations more innovative, more influential, and more profitable than others? Why do some command greater loyalty from customers and employees alike? Even among the successful, why are so few able to repeat their success over and over?
People like Martin Luther King Jr., Steve Jobs, and the Wright Brothers might have little in common, but they all started with why. It was their natural ability to start with why that enabled them to inspire those around them and to achieve remarkable things.
In studying the leaders who’ve had the greatest influence in the world, Simon Sinek discovered that they all think, act, and communicate in the exact same way — and it’s the complete opposite of what everyone else does. Sinek calls this powerful idea “The Golden Circle,” and it provides a framework upon which organizations can be built, movements can be lead, and people can be inspired. And it all starts with WHY.
Any organization can explain what it does; some can explain how they do it; but very few can clearly articulate why. WHY is not about money or profit– those are just results. WHY does your business or organization exist? WHY does it do the things it does? WHY do customers really buy from one company or another? WHY are people loyal to some leaders, but not others?
Now, although Sinek’s book is more directed at people running large companies and organizations, I think the principals Sinek presents can apply to any new endeavor we take on.
In Old Dawg podcast episode #122, entitled “The Importance of Knowing Your Why,” I talk about your “why” as it pertains to real estate investing and share how I discovered my “why” and how that is at the core of my efforts today to grow my real estate portfolio.
I know that it seems like an “extra” step to getting started but it is perhaps the most important one. I know your question was originally on where can you find small rental units and how I first found mine, but I think it’s important that you understand your why first. And sure, I can answer your specific that but let’s start with why.
You see, you may say your why is something like, “I just want to get a good return on my retirement nest egg” or “I just need more income to maintain my current life style” or “I don’t want to be idle in my retirement and want to learn something that is fun and that makes money.” These are all valid reasons but those things are more results than reasons for your why.
If you want to just get a good return on your existing funds – your why may be more about security. You want security, which translates more into “Peace of Mind” in your retirement so you can enjoy your retirement without worrying about whether or not your retirement funds will last the long haul throughout your entire retirement. If this is more of your why, then you might not even need to purchase a rental property. It might make more sense for you, for example, to be a passive investor and invest in a REIT or real estate syndication. Then, you won’t have the additional work of dealing with tenants and property managers.
If your concerned your retirement income may fall short and you’re thinking I just want to have enough money to maintain my lifestyle, your why is not about money as much as it is, I want the freedom and resources to travel with my wife, spend time with my kids and grandkids. Your why is more about TIME.
After your Why is in place, you can then go into the next steps to getting started. I outline those steps in podcast #006, “How to Get Started in Real Estate Investing,” Which talks about the various steps:
- Education
- Getting a Mentor
- Writing a Plan
- Taking Action
- Re-Education
- Revising Your Plan
I have a free graphic outlining those steps in our show notes that you can download here.
But it is in the “Writing Your Plan” stage that you go into the hows and where’s to find rental properties.
You see, when I started out, I just bought the properties – I flew to Atlanta and Memphis and bought three turn-key properties in one week. I did that without much education, without a mentor and without a plan. And the problems that followed, were a direct result of not implementing the steps outlined above.
Finding the properties is not the difficult part. It’s easy to find rental properties. The question is are they the “right” properties and are they the best properties to help you achieve your why. Here are a few articles and podcasts that should help you:
We have lots of episodes and articles on where and how to find good rental properties on our website. I would just go to olddawgsreinetwork.com, type in the search bar the words “How” or “Where” and you will get a ton of resources on how to find good properties and where to find them. On our resource page, you’ll find our “Top 20 Real Estate Investing Books” that will also help you get started.
Question #2 – How do you find real estate investors?
Bill’s Answer to Question #2
Good question. Of course, I’m not really sure why you might want to meet real estate investors. If you want to meet real estate investors because you are currently or want to be an investor yourself, then there are different places to look than, let’s say, you are looking for real estate investors because you want to sell to them products or services. Nonetheless, there are a number of ways to find real estate investors.
Here are 10 of the best ways I know to meet real estate investors:
- Real Estate Investor Clubs – This is the most obvious. There are various national real estate investor organizations that have local chapters where you can meet other real estate investors. Some of the main organizations are NREIA and NREIC.
- Meet-Ups– There are meetups in almost every city in the U.S. Meetups are for any group of people interested in meeting people with people who have the same interests. Whether you collect bugs, love small dogs, make quilts, seek fellowship with others of the same belief or other people who invest in real estate, there are meetups all over the country, in almost every town
- Investor Clubs – These are not the same as strictly “real estate” investor clubs. Here you will meet people who are just interested in various types of investment opportunities. BetterInvesting, formerly known as the National Association of Investors Corporation, is the preeminent advocate of collaborative investing. It maintains extensive archives of information for starting and maintaining investment clubs.
- Chamber of Commerce Meetings – Almost every city has a Chamber of Commerce that brings together local business people in regular meetings and events. Within that group, there are often a number of real estate investors.
- BiggerPockets.com– This online real estate investing portal is one of the best resources for real estate investors. BP has over one million regular real estate investor visitors from all over the world. You can do a search for investors in your area, send an email and arrange meetings with local investors over coffee.
- Real Estate Guru Events – There are a number of real estate investing educational organizations that teach people how to invest in real estate. They often have frequent webinars, seminars, boot camps and other events where you can make contact other real estate investors. Some of the most popular guru event sponsors are RE Mentor, Lifestyles Unlimited, Freedom Mentor, Brad Sumrock, Fortune Builders, and Freedom by Flipping.
- Family Office Club Meetings – What do real estate investors need besides properties to buy? Money to buy those properties! Family Office Clubs are organizations where people who manage the wealthiest individuals fortunes regularly gather to seek information on good investment opportunities, including real estate investments. Many real estate investors attend these events to find investors for their properties.
- Brokers and Agents – Real estate investors are always talking to real estate agents and brokers for leads to prospective properties to purchase. Find brokers and agents that talk with lots of investors and ask them for referrals to some of their top client investors.
- Local Professionals – Real estate attorneys and real estate-focused CPAs are also good referral contacts to find local real estate investors. In addition, banks, title companies and property management firms are good referral sources as well.
- Start Your Own – I think this strategy is very effective! Instead of going after real estate investors, have them come after you. You can start your own real estate investing club that regularly meets and features leading local real estate investing experts. You would not only meet the many investors that would attend your meetings but, since it is your club, you would have access to top name industry leaders and speakers who might not otherwise even take you calls. Another successful idea is to start a Cash Flow 101 Club, where investors come together to play Rich Dad Robert Kiyosaki’s popular Cash Flow game.
Well, I hope that list helps you meet some real estate investors.
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