Most real estate gurus peddling real estate courses will tell you that networking is important but it’s typically very superficial and undervalued. Many new investors just set out to build a big contact list comprised of people who have no idea who they are or why they’d be calling on any given day. Then they only make contact when they need something.
A network needs a lot of attention, and neglecting it is a major mistake. I’m not good at networking. I pretty much despise going to real estate investor meetings and listening to people pontificate about how amazing they are and overinflating the tales of their great exploits. Most of them are completely full of it. “Fake it until you make it” is a major motto in the real estate investing world, and many investors fully commit themselves to the mantra.
Networking is work. It’s not easy, and that’s why most investors are lacking in valuable connections. I still am. I know that I have to meet 10 to 20 people to find one good addition to my network. I know that I’ll probably have to have several meetings with a person before I’m confident I have a new legitimate resource, and even then, I’ve been wrong.
I cringe at taking a new call or reaching out to a new contact. I know that the overwhelming odds say it’s going to be a waste of time. But when you find that new good person, you’ve just made a significant addition to your earning potential and hopefully an improvement to your life. Good resources usually are more than just financial value-adds. They’re typically pretty impressive people that add more than dollars to your bank account.
Here’s the real key to your network that most people won’t tell you in the seminar or boot camp: You need genuine meaningful relationships with the members of your network. You can’t just add a person to a list and then call them only when you need something. A good network is relationship-based, and every relationship takes consistent attention.
Your core network members should hear from you on a regular basis. They should be friends. You should be someone they want to hear from. They should be someone you click with, if possible. You should know about their families and their plans. You need to send them Christmas and birthday cards and send them emails just to see how they’re doing. You should have lunch or dinner with them at least a couple times a year.
The rules for being a good real estate investor are really the same as they are for being a good person. Good people are what you’re looking for. Many readers of this will probably never believe this, but cheaters and crooks usually don’t find real long-term success in this business. They can get one over here and there, but once they’ve revealed themselves, the word gets around and their opportunities dry up.
If you want success in real estate, then you need people. Key members of most real estate ground teams have the following titles:
· Real estate investors
· Real estate and business attorneys
· Real estate agent
· Contractors, including plumbers, electricians, HVAC installers, carpenters, handypeople, etc.
· Home inspectors
· Financing experts, including bankers, mortgage brokers and private lenders
· Home stagers
· Energetic hardworking people
Don’t think of other investors as just your competition. They’re also a valuable resource. They can be a source of deals, and they can be an outlet for your deals. Often investors get deals they can’t handle or don’t want, and it’s better to pass them along and maybe make a little money on a finder’s fee than to discard them and make a whole lot of nothing. They’re also a great source of other connections and information. Most investors are happy to help.
You need to know contractors before you need a contractor. Get numbers off of work trucks at the home improvement stores. Call them and ask to visit their ongoing projects and check their references before you have a job for them to bid. Find out their rates. When that fixer-upper deal falls into your lap, it’s no time to be searching for contractors on the Internet.
Real estate agents are easy to meet, but the right one is often more elusive. Cast a wide net when you’re reaching out to agents in your target market. A good agent can help you quickly fill in the blanks on your network list, as well as provide property leads and help with documentation.
I could list the many common ways in which people attempt to grow their network and then this piece would be a thousand-page piece of garbage. The best way to network is to open your eyes for people — not to exploit — but with whom you could realize mutual benefit. Keep in mind that people who do not check one of those boxes on my list above can still be valuable resources.
I notice that most of my friends are not good at networking. I notice that even some of my really good old Marine Corps friends will rarely come out for a gathering. But I notice that almost all of my more successful friends are really easy to get out to a party or gathering. I’m not saying that only outgoing people are successful. I’m saying just showing up is the basic ingredient for success.
So get on those social sites, go to those meetings, say yes to that party invite and keep your eyes open for the people you need to succeed. When you’re out there, talk about what you’re doing or want to do. Approach networking like friend-building. You’re not looking for a resource to exploit, you’re seeking mutual benefit. You’re looking for a real relationship. The ideal business relationship would also be a friendship, so always take that approach, but don’t dismiss a good contact just because you don’t like them personally. Sorry, there’s no absolute rule in anything.
The more substantive relationships you have, the better your chances will be that you’ll be able to capitalize on an opportunity or recover from a mistake. Success in the real estate business is built on the foundation of a network of people.
Justin Pierce is a real estate investor and real estate agent who regularly writes about his experiences buying, renovating and selling houses in the Washington area.