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I’m working on an article about the biggest mistakes that real estate entrepreneurs make. I wanted to get your feedback of things to add to the article. Here are some of the things that I have so far, I do go in to much more details in the articles:
1. getting bank financing or private lender financing to buy a house
2 doing rehabs too soon… or maybe ever
3. spending money on marketing campaigns for out of town owners or probate
4. not telling the world you are in the business of solving real estate problems
5. partnerships, daisy chains
6. Being so focuses on “1” technique that they don’t see, or know how to do, other opportunitiesWhat would you add to the list?
Hi Jackie,
I usually target probate leads and have gotten some success. Slow I might add, but other than searching vacant houses what would you suggest for finding motivated sellers. I market online on social media, sent out letters (stamps are getting expensive now) so slowed down a bit and with a rehab Im doing..really now slowed me down. I also get list of code violations but its not sorted as which are condemned by the city. Just that they are on code violation. What would be your best reccomendation? I did a totol of 7 flips last year and want do to 20 this year. Your totally right about not doing rehabs- they are lot of work and time consuming and because so much money is in the project you can’t just not finish the project. But now i want switxh gears and get more deals but finding it harder to do marketing…any suggestions? -Manny
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Here are two issues to add to Jackie’s list:1. Trying to multi-task (in the beginning) with a whole sack full of solution types, without having first mastered one, then another, then another.
2. Choosing the wrong instructor (and team, if there is one). In the beginning, a newbie typically has no idea of the hordes of wannabee gurus who are
a. Grossly overpriced.
b. Incompetent.
c. Dishonest.
d. Poor instructors with inadequate or incapable support help.
e. Unwilling to allow their students to communicate with each other.
f. Teaching methods that have long since been obsoleted in the marketplace, or have been crippled or even outlawed at various levels of law.
g. Designers of a “curriculum” that is so stretched out over months or even years that by the time the student can finally discover that it is not going to work for perhaps a variety of the above reasons, it is way too late for a refund.
h. Take your money scammers, but refuse to deliver.Having butted heads with ALL of the above diseases of this industry over too many years, here are some concrete examples to flesh out the abstract list above:
Online videos that won’t run with a fiber-optic connection, which then you learn is not available where you live.
Recommended institutional lenders where you learn the state from which they operate has never heard of them, has zero registration records, and their CEO only has credentials in a different field.
Wholesaling methods that have zero use where you live because of a local uber-fast growing economy.
An offer to put YOUR name on a book the guru wrote to give you “greater credibility” online. That’s called lying and fraud.
Gross ignorance of current IRS case law and congressional statutes that would cost you more than you could ever pay — in a how-to course sold to you.
A guru who sells you posters (some downloadable, some already printed) to show to clients — with typos so gross that your local copy clerk at Kinko’s (now FedEx Office) winces — but who flatout ignores your help request for corrected downloadable files.
A guru who gushingly praises a student who after spending some $12,000 with said guru is now beginning to break even after six years.
And to quote an ancient phrase from an ancient Sonny & Cher song, “the beat goes on.”
I’ll halt this ever-growing list of horror stories before I put everyone to sleep.My point is that newbies can’t possibly appreciate yet the low-risk, low-cost pure gold they have stumbled into here at CashFlowDepot because most of them have no hard knocks experience or anyone to tell them of the guru-crafted minefields designed to ensnare newbies and leave them with no recourse.
–Dee
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Great points Dee! Too many people get suckered in to buying those expensive seminars and coaching programs. BIG MISTAKE!
I just figured out real estate investing on my own for 2 years before I went to my first real estate seminar. I made the mistake of thinking that if I went to the most expensive seminar it must be the best. Boy, was a sadly disappointed when I attended a $5,000 seminar in 1995. I knew more then the instructor and had done more deals than the instructor who’s primary objective was to upsell you in to their coaching program or their next seminar or the next. I did two seminars then totally stopped going to seminar until I met Jack Miller. I knew Jack was the REAL DEAL, 1000 times smarter than any other guru I had ever met, and for only $495 for a 3-day event with no upsells. ( Luckily, now everyone has access to his training here at CashFlowDepot)
Here’s a sad story I received recently:
Hi Jackie
My name is Yolonda and I was looking at an email that I received regarding the retreat coming up on January in Panama. I hesitate to write this letter because in 2014 I went to a 3 day seminar from a reputable “Rich” company and sat through their seminar and thought it was a great idea to do real estate and convinced my husband that we should do it. He reluctantly agreed because it cost so much 28K for mentors, workbooks, training etc. and of course I used our credit cards. After the seminar I went home excited and we did all the training from the mentors online and then the company called and asked if I want a coach (7K) because you are not as successful doing the Real Estate without a coach, so I purchased a coach. That program went on for another several months with 3 different coaches and a Huge mixup on how far I had gotten in the coaching series. There is a lot more to the story but I won’t go into it. But needless to say it is 2 years later and I still have not done a Real Estate transaction. Part of it is because I fear loosing more money again and the other part is, I just don’t know what the heck I’m doing even after all that training. It’s like I don’t have a road map.It seems like when I ask a question about certain things they don’t give me an answer, it’s more of “well what do you think?’ or “I can’t tell you what to do”; well I understand that at least give me some kind of guidance. I was contemplating whether to attend the retreat but If I did would there be people there to actually assist me in getting some kind of deal? I know I have to put in time and I’m willing to do that…I’ve already put in alot of time and money but to no avail, yet. But I am anxiously anticipating that feeling I will get when I actually make my first deal. I know you don’t know me from any other person but I do want to help others and have fun while doing it. Would it be beneficial to attend the retreat or should I become a member online and go through the videos and other programs you have and understand better that way. I look forward to hearing from you soon.
Sincerely,
Yolonda
PS Sorry if this letter seems like I’m rambling but it’s late here, hopefully you can understand what I’m saying
NOTE: I told her do not come to Panama. She should not go in to any more debt for travel and the seminar there. Instead, she could get really good training as a member of CashFlowDepot and get help for free in the Community Forum.. I encouraged her to do some wholesale flips and highest bidder sales to generate a lot of cash fast so she could get her debt paid off then be FREE to focus on her real estate business.
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Sadly, Yolonda’s story is practically a carbon copy (OK, I know that phrase dates me a bit) of so many I’ve seen over the years. When I used the term “minefield” earlier, I wasn’t kidding. I live in a North Texas community where the gurus have a well-traveled route through town. They often run late night half-hour infomercials on 3-4 TV channels simultaneously. So it would be hard not to hear many such sad stories later. And I intend no disrespect in any way when I use the term “newbie.” Everyone starts out as a newbie anytime they undertake something new.The goal on CFD is always to treat them with respect, kindness, honesty, accuracy, and encouragement. It doesn’t get any better than that.
–Dee
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HI Manny
Congratulations on doing 7 deals last year. You will hit your target of 20 deals this year!
You’ve got the drive to make it happen!!The problem with mailing letters or postcards to every probate or out of town owner is that most of those people are not motivated to sell quickly at a below market price or with creative terms. So, you’re wasting a lot of money for a dead end. You might get one once in awhile but you’ll waste a lot of money to find that “one”
If you’re going to do marketing by mail, it is better to have a more targeted list to market to. An example would be all vacant houses in your town. A vacant house owner has a serious problem and needs a fast solution. You can drive around to look for vacant looking houses or you can recruit people to do this for you. You can also do “word of mouth” marketing by telling everyone you know what you are looking for. If 100 people know you are looking for vacant houses or people who are desperate to sell their house fast, you’ll get a lot of leads without spending any money on marketing.
That’s one of the reasons I love marketing to code violations (red tags) – i know all of these are vacant houses which cannot be rented out until they are fixed up. Some cities even impose monthly fines if the seller does not resolve the problems with the houses. So these are vacant house leads and extremely motivated sellers. I can usually get these for 90% below market! They are ideal wholesale flips!
Another great way to get deals… Drive neighborhoods, get out of the car and talk to people who live there – ask them if they know anyone who needs to sell. You’ll almost always get several referrals which turn in to deals. Walking neighborhoods, knocking on doors and talking to people will result in many opportunities.
Thank you Jackie! I appreciate your help. Im putting a seminar together to show people how to search for vacant houses. Free of charge. Looking to take a page out of your book. Instead of moms helping me I will target Recently graduated college grads. Since im one of them. Will let you know how that goes!
Emmanuel,
Jackie is so right. Last year all of my leads that I closed on were from direct mail. A little unusual for me because in the past most were referrals or from banks. It is a good thing I focused on targeting vacant houses. 77% came from post cards to vacant houses. 33% were from a mailing I did at least two years ago to absentee owners. It gets some results but as you can see it takes time. Focus on the vacant houses more bang for the buck.
Don WedeEmmanuel,
What part of the country, or more specifically what city is your market place? The main reason I went to Panama was to develop a new website and the optimize it. You are correct to grow to another level you need a web presence for marketing. My website was so bad that Adrian Nez the speaker, used it as an example on what not to do with a website. I came back from Panama with two up and running websites and a third in process. With Jackie’s guidance I have someone who is doing SEO on the sites to make them more visible to Google. I will give you his name when he gets my sites done. Unless Jackie wants to spill the bean now. LOL. Actually it is no great secreat, Jackie has mentioned his name repetatly on confrence calls.
Don WedeHey Don,
So I went to the Panama retreat last year and could not make it unfortunately this year as I had too many vacancies. That was the main reason i wanted to go was to learn how to correctly have a website up and running. My market is Rhode Island. I live in Providence and have bought houses in the city and surrounding towns and cities. Rhode Island is the smallest state so really I can buy in any city thats a deal. I had used oncarrot website but only had 1 lead in like 6-8 months and just needed a new website to get going on online on my online presence. I have a bunch of youtube videos that I do marketing. What I need is a website guy and SEO/ PPC guy advice and I’m ready to go. After that, is all action on my end. I wont stop until I reach my goals.
Manny,
The investor Carrot web site is top of the line. It may need some tweaking if it is relatively old. If you type in google “I need to sell my house fast in Providence Rhode Island” who is on that first page in google? That is where you want to get. If you are not there that is your goal. Maybe Jackie can steer you to a good SEO/PPC person. Investor Carrot does has some real good on going training.
Don WedeThat’s a good one Kathleen! I see it all the time. This is usually because people have a fear of losing money or not analyzing the deal correctly.. which could cause them to lose money. Our book Facing the Fear Factor goes in to more details about how to get over fears.
These problems can all be resolved if you just use an OPTION to control the real estate versus buying it.
You can still make great profits when you use an option to control a wholesale property or any property then do a highest bidder sale. It is not necessary to buy real estate first.
For rental properties, before you jump in to buying them, just master lease first. This will let you test drive a house and a neighborhood before you make any buying decisions. Once you know you like the area, you can start doing marketing to buy subject-to the mortgage.
It usually takes less than $100 to secure an Option. That’s a lot better than putting 10% down or more to buy a house then applying for a loan.
The other thing that holds people back, is that they are just not sure what to say to motivated sellers. They don’t know how to present creative offers. Anyone can learn how to do this with the training at CashFlowDepot
Manny,
I have an investor carrot website also, and I also have an SEO person not affiliated with them? Why? Their people are way out of my budget. I think some of the training offered is great if you got a few hours a day to dedicate. I run my primary business six days a week, with a limited amount of time. Jackie points out the need to get eyeballs to your site. Honestly, I’ll not be renewing my subscription to Investor carrot ( This is not me bashing them) The last AMA call gave me a new direction to go in. Thanks JackieWally,
Thank you for your insight. I just recently stopped usuing oncarrot. I loved the program and outlay they had but just like you mentioned. SEO/ and PPC cost to use them was high on the budget. What are some of strategies you will be using for your new website? I listened to the call too but felt like I needed just a bit more information.
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