What does a mentor typically charge for the education and “hand holding” process? I’ve spoken with a person locally that would like to mentor me in exchange for half of the profit from my deals for the first year. Is this typical or is there a typical charge for a mentoring?
I’m not sure why you would need someone to hold your hand? The REI business is very simple. Buy at a BIG discount and then sell or rent for an amount that will ensure a profit. It’s basically just a math exercise (with a lot of elbow grease thrown in).
Plus, if someone’s holding your hand, it is hard to enter the numbers into the calculator. Keep both hands free and keep the money you earn.
If you need to ask questions, you’ve got an excellent resource here. Even better would be to join your local REIA and make friends with the SUCCESSFUL investors. Your new friends will be happy to help for free.
Good Luck,
Mike
you’d basically be giving away half of what you make - that’s alot.
and ask yourself this - if they’ll take 1/2 of what the deal produces…will they share 1/2 of the problems???
from the responses I’ve gotten so far, this doesn’t sound like a very good deal. If one wanted to use a mentor, what would the normal fee be?
It depends greatly if it’s a ‘good deal’ or not. Does this ‘mentor’ have any known experience in real estate? If so, how much and/or how long has he/she been doing it? Are they doing what you want to do or not?
Now, assuming that you’ve answered the above in a positive fashion, is the cost of the ‘education’ too much. Again, it depends. Why are you looking for a ‘mentor’ in the first place? To have someone to teach you the basics of the business or to have someone to help you through ‘hands on’ experience?
If he is a knowledgeable, trustworthy investor and you are a green wanna-be, then what you are basically forming is a partnership arrangement. You are willing to put in your credit/cash and he is willing to put in his time/experience to make a successful deal. If I were approached by someone like you, I would make you the same offer, 50% of the net profit.
You do have to understand that YOU will be on the line for the property. It’s really YOUR deal. You are willing to ‘pay’ him for his time/knowledge to help you make the right deal. It’s in the ‘mentor’s’ best interest to make you the best deal possible, but it’s still up to you to be willing to risk doing the deal.
Raj
I know one mentor who takes four “students” per year and charges them $25,000 for a 12-month period. At first I thought, “Who the heck would pay $25,000 for that?” Apparently a number of people…he’s booked solid.
Is this a good deal? It depends. If the only other option for you is to do nothing because you’re paralyzed by fear, then this is still a great deal, even at $25,000. You’re gaining experience and getting access to someone who has done a lot of deals (in my friend’s case, he’s flipped 600 houses in the last 12 years). To put the marketing hat on and start pouring the Kool-Aid, “Is it worth $25,000 to learn how to make $100,000-plus per year for the rest of your life?”
People pay more for a college education so that they can make less.
Frankly, I think your mentor’s offer to split the profits with you and not ask for any cash payment for his time is not a bad deal. After all, you’re going to be taking up his time, too, and you might not ever do a deal. Again, if your other option is to do nothing, then getting half of something is clearly a better deal than getting 100% of nothing.
You will need to be very clear about what the mentor’s role is, of course. You don’t want to give someone 50% of the profits only to realize at the finish line that you ended up doing it all on your own. Then again, maybe just the idea of having a mentor gave you the push you needed to get started. (This is without doubt why most people fail in this business…they never get started!)
If you do this, outline your expectations clearly and have your mentor sign them. Then keep a tally of how the mentor assisted you to ensure that he lived up to his end of the bargain.
Half of something is better than all of nothing.
50% in a deal so that they can make it work and show you how its done is dirt cheap for the knowledge you will gain to be able to duplicate the process over and over again.
Hanging around forums and asking questions is like 5-10% of what a mentor can show you.
I love that one.
Half is not bad if you ask me, but it depends on how much will he teach you and how do you know he will.
Ask your self this:
- How many houses will you be able to do on your own without his help.
- How many houses will you be able to do with his help
based on that, you decide. If you will earn nothing doing it on your own, then 1/2 of something is better than nothing.
What he is offering is joint venture, you put the time and money, he puts the knowledge and training.
I don’t have personal experience but I came across this today on CNNMoney. What to do with $5,000 now.
[i]Goal: Building wealth
Best career moves:
Hire a mentor
That’s right: Pay someone who has occupied the job you ultimately want - preferably a retired legend who has no axes to grind - to meet with you every couple of weeks.
You can find potential mentors at industry conferences or through your professional association.
Your mentor shouldn’t be a friend, lest things get awkward, but she can be a powerful ally, using her industry contacts to help you out.
If you see a mentor twice a month at $100 an hour, $5,000 will pay for more than two years of help. By then, you shouldn’t need one anymore. [/i]
If you give a man a fish he eats for a day, but if you teach a man to fish he eats for a lifetime. Will this mentor teach you how to do it? I was watching the movie Interview with a Vampire. They talked about when Lestat (the head vampire) turned a little girl of 9 or 10 years of age into a vampire. That is against the “vampire law” because you never grow older than when you are turned. That means as a perpetual child you never can lease an apartment, buy clothes or book passage for yourself. You are always dependant on someone else for your normal existence. This is how I view real estate mentors. They keep you from actually doing the steps required to invest in real estate so that you can get good at these steps. If this mentor allows you to do the business you never grow up. You are a perpetual child in real estate investing at the mercy of one mentor or another.
I have found programs that will look at house evaluate them fix them up and all you have to do is buy them. That is fine until that guy makes enough money and decides to get on his yacht and sail around the world for 2 years. Then you are stuck in a business that you have no idea how to run.
I say do like propertymanager said and go to your local real estate investors club and find someone that will allow you to ask them questions about how to do what you are doing at each step of the way.
a great mentor, for anything in life, is one that involves you in the process with little risk to yourself. they do this so that you learn. if they preach and spoon feed you - this, while it may seem real nice, will only work to hurt your efforts of becoming independent.
Mentors and Coaches… hummm my thoughts…
I always ask why do professional boxers, football players, actors, baseball players, golfers, Realtors, CEO’s of company etc have mentors and coaches that cost them Thousands of dollars?
Most people look at the cost of something rather than the value of something which I feel is not always the best way to do so.
Yes you can do Real Estate Investing on your own, just as you maybe could be a great boxer with out a coach.
But, who do you think will get farther and have an easier time of it?
As for cost I have seen Guys like Dustin XXXXX say he will mentor you for Free all the way up to guys like Russ Whitney who’s top level program cost $96,000. I know of a few like Dan Kennedy who charge even more…
The important thing is that you take action and do the work yourself.
It is like the bible when Jesus talked about “Give a man a fish and he will eat for a day, but teach him how to fish and he will eat for a lifetime”
Just make sure your Mentor, Coach, Educator etc, is teaching you how to fish and get your lines in the water and I am sure you will do well.
Just my humble opinion…
great post. true. that’s a line they use at the expos…“investment”…not cost.
it’s partly true and partly complete BS
i agree with you on your points though. what VALUE are you investing your money in and what are the potential returns. if it stinks, then leave it alone. if it smells like all roses, be skeptical, if it’s sounds reasonable and a good fit for you - then consider it.