Questions to ask :
Questions to ask :
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Beware of ‘ free ’ advice Many gurus promote free information seminars presenting information , which is mostly available for free on the Internet , and then use motivational tactics to lure you into buying their products at free events . The model is normally something like this , “ come attend our free seminar and learn the secrets to making millions in real estate ”. If they were investing it would be wise for them to declare their personal investment strategies to test their authenticity .
Research proves that 80 % of newbie investors who attend these get rich in property seminars end up spending more money on buying products like instructional CD ’ s , workshop notes , educational material in a binder or on property coaching from unskilled investors than on actual investing . The problem is that a large part of their cash flow gets invested in the guru ’ s products and not on property deals , which is what you signed up for in the first place .
Questions to ask :
1 Why do you want to share your secrets for free ? 2 How do you make your money from real estate ? 3 Why expose your competitors to your methods ? 4 If real estate investment can make you so much money then why are you selling coaching , education products and not investing yourself ?
5 Do you make money or commissions from selling properties ?
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Selecting the right advisor , mentor or coach It is critical to have a mentor or coach guiding you through a deal correctly . This is far better than talking about hypothetical marketing and sharing ideas in a hotel conference room speculating about potential investments . Mentors are supposed to help you from learning to doing . It can also be a far better idea to work with them for a percentage of the profit .
Be wary of mentors or coaches who operate from other countries and who claim they invest in your country . They need to prove first hand local knowledge from the start . While the property investment process is universal , you need local knowledge if you want to start investing locally . It is important to fill the knowledge gap learnt in the classroom as well as in the real world and the mentor focus must be on doing deals first . They are supposed to help you get over your fears of doing your first deal .
Questions to ask :
1 Who are your current clients that I can call that you mentor ?
2 Do you partner , co-invest and share profits with investments with your students ? If so , how does it work ? 3 Where do you currently invest ?
Action to move forward
1Do your homework first When you start out it can be far more effective ( and cheaper ) to do as much of your own research on investing . Sourcing your own information on the subject before going to seminars and investment clubs can prepare you before you go . There is so much free information available on the Internet , attend seminars and talk to real estate professionals and other investors .
2Find and invest with like-minded partners It can be far less riskier to co-invest from the get go with other experienced investors . This at least gets you into the game . It also can be beneficial to invest with your conveyancing attorney , real estate agent , and property manager or mentor first time out . At least you can spot the pitfalls of investing while doing it .
3Get an estate agent qualification Very few estate agents become true investors . This flummoxes me as I think this is an ideal opportunity to learn more about the business and property . This is an opportunity to learn the detail and legalities of investing in real estate in your area . It is also an opportunity to meet and network with investors , property managers , developers and lenders .
Doing it the hard way - School of hard knocks Another way to learn very fast is to just do it . Yes you will make mistakes and they could be costly but at least you are taking action towards your goals . Property is very forgiving and there always professionals to help you along the way and guide you forward . The bottom-line is that there are no secrets to investing , just open secrets that you have not learned yet . Enjoy the journey .
www . reimag . co . za JUNE 2016 SA Real Estate Investor 19