Real estate investors are always looking for opportunities to expand their network because the success of their business depends on it. Even if you enlist the help of a company to find leads, you need to have good people skills to close them. But that’s not the only place good people skills pay off – networking can take your real estate business to a different level.
You are probably trying to build a relationship with professionals who are important for your real estate investing business – people like lenders, attorneys, contractors, realtors etc. If you’re not, then you should, because this will help you cut costs, find fast cash, get new leads, or finish a remodeling project within a fixed time frame.
We talked to two real estate investors who attribute the success of their businesses to the power of relationships, Andrew Dunn and Jesse Trujillo. Jesse (AJX) made it in the competitive real estate market of San Diego without marketing and Andrew lifted his real estate investing business off the ground through networking. That’s right, we are about to share their story of making it without marketing, even though online marketing for real estate investors is what we do for a living – because we want you to have a multichannel lead generation system in place.
Highlights of their interviews follow below. But before we go into that, let’s quickly explain why the usual take on networking for real estate investors is not sufficient to make a sociable entrepreneur out of you.
Since anyone in the business would agree that networking is important, you can easily find articles on the subject, and usually they focus on three types of advice:
You are not the only real estate investor who is looking to expand their network – private lenders, brokers, attorneys – they all want to profit by working with people like you. So, these people tend to flock to local real estate groups. The group may be open to the public or a club membership might be required to attend meetups. Also, there are many other professional events, conferences, and seminars where you can start building your own network.
You can even organize an event on your own. Whether you hire someone to teach you, or you give lessons to others – this is another great way to meet real estate professionals (and also motivated sellers).
Everyone in this industry needs:
However, depending on your real estate market and the type of deals you pursue, it’s also good to know a whole host of other professionals that can step in. House flippers need a contractor who is able to complete rehab projects within a budget and under a time constraint. Landlords need reliable contractors too, but they need a property manager as well. You get the point.
Of course, this doesn’t mean that once you build a core network you should ignore everyone else. Real estate investors don’t have a 9-to-5 job, so you can think of a way to introduce your business to anyone you meet, regardless of what they do at the moment (more on this below).
These days, it’s easy to enter people’s field of view if you are active online, since most of us spend countless hours browsing. The idea is that when you push good content, other professionals will notice it and they’ll reach out to you. There are many formats to do this:
And on the other side, when you reach out to someone new, you can quickly refer them to sources that are available about you online (like having a digital business card).
This is all solid advice and it’s a great starting point if you are redefining your approach to networking. However, it only answers the “where” and the “who,” but not the “how.” In other words, once you are at a professional event, and you meet a property inspector there, how do you establish a relationship? Or let’s say you reach out to a private lender on LinkedIn, but how do you take that contact to a point where you can collaborate with this person? No one tells you how to do networking – it’s sort of a trade secret.
So, we interviewed real estate investors, those who’ve actually mastered networking, to find out what their secrets are.
We are all different. Someone has the looks, but how can you make a real estate deal look “hot”? Maybe in retail (B2C) that would work, however, here, the consequences are far-reaching, and people, be they buyers or sellers of real estate, have big decisions to make.
Others have a great sense of humor, but is this of any use when you need to close deals? You might have a great personality and, let’s say, people love to spend time with you socially, however, that doesn’t oblige them to sign on the dotted line.
Charisma and good chemistry are important, however, networking is more complex than that. There are three recurring themes about the networking experience of both Andrew and Jesse:
Every real estate investor has their own strengths and weaknesses when it comes to networking. That’s why we can’t tell you how to do your networking – what we can do is share the principles that brought success to people like Andrew and Jesse. The principles are:
Let’s take a closer look at each of them.
If you make an effort to show others that you aren’t perfect, you’ll immediately bring down whatever interpersonal barrier there is between you two. Why? Because these people you’re talking to – they aren’t perfect, either. That’s why self-deprecating jokes work.
Granted, your ability to be vulnerable in front of others will work best when you try to connect with motivated sellers. Have you taken the time to consider what “motivated house seller” actually means? It’s a nice way of saying “people in a crisis.”
Andrew started a college presentation suited up, and in the course of the talk, he stripped down to his underwear in front of 50 people to make a point that he is just another regular guy (don’t worry, you don’t need to replicate this). This is his insight on working with motivated sellers:
I put myself out being vulnerable in front of a bunch of people and I got a lot of positive feedback from my professor. So… I’m showing my vulnerability…because, I mean, a lot of these situations, they’re motivating for a reason. They got cancer. They lost their job. Their mom died, somebody in their life, or they can’t pay their bills or it’s just too much and they just want to move on, headaches, divorce, whatever.
Through my negative experience, not negative experience, just my life experiences, parents getting divorced, I know the process. I know what it’s like. I’ve been in the court system. Dad died of a heart attack suddenly. I know how the probate process works from firsthand and I know how to deal with it.
Allow yourself to build rapport with the people going through this crisis and don’t look at them as owners of just another house to buy. It doesn’t take much, simply show them that you understand their predicament. Sometimes, they break down and cry right there in front of you. These may sound like extreme examples, but vulnerability forges connections – it’s true in your personal life, and it can help you build a professional network, too.
To tell you the truth – it sounds like an empty platitude, but it has great implications on your success in expanding your network. The principle of transparency applies especially to solving issues, misunderstandings, and potentially tricky situations. Jesse Trujillo says that being transparent paid off for him when he did his real estate investing ‘firsts’:
Be open and I would tell them, hey look, this is one of my first flips I’ve done, you know, in a while and, but I’m going to close it for you and here’s my lender and you know, I can give you the information, you can talk to them. And really, it’s just building that rapport with them, you know, like anything else and just I think they respected the fact that I would tell them and be honest with them and not say, oh yeah, I’m going to close in 10 days and not go through with it, you know.
If something is wrong you want to let your partners know about it. Disclosing the truth, when done right, will actually create a bond. It’s something like what you expect your friends and family to do in your personal life – if you singing voice is bad, you want them to tell you the truth (“Oh, man, you sound like a hungry dog!”) and stop you from making a fool of yourself by singing in front of an audience.
On the flip side, when you withhold the truth and they find out about it, they’ll start questioning everything else you’ve shared with them. It’s human nature, and no one can help themselves from wondering whether you are gas-lighting them on any other issue, too.
The manner in which you tell the truth matters as well. Be honest, like Jesse, but don’t do it in a way that makes the other side question your professional capacity. So, instead of saying something like “Oh, God, I don’t know how I could think I can pull off a house flip,” focus on the solution “This is my first house flip, and I’m looking forward to learning how all this actually works.”
Your business reputation depends on reliable delivery on your commitments – you know this without us telling you. So, if you say to a motivated seller that you can close in a week, you do it. Or, if you name a price to a cash buyer (or a profit margin to an investor), you follow through on it.
Usually, but not exclusively, the idea of violating commitments pops up when you are tempted by money. The dilemma is whether to go for the option that makes more profit, or to keep your word. Here’s how Jesse Trujillo and his team handle the issue:
… we bought a property from an agent we know that’s sent us several deals and he had other investors and he just wanted to go with us because he knew that, you know, we were going to close it. To be honest with you, we were off on our numbers. We offered way too much and I remember our team, we had our meeting. We looked at it and I just looked at them and I said, we’re going to close it. We probably won’t make any money on this. We might even lose some money on this, but our relationship with this agent is so important and our word, you know, is everything that we’re just going to close it and cross our fingers.
So there you go, sometimes it’s best to bite the bullet on deals that will hurt you financially in order to protect the relationship you have with a particular professional in your network.
This relates to the general theme of putting relationships first and profits second when you are building your real estate investing network. The reasoning is quite simple:
But guess what: those $5,000 in profits you’ve kept in your pocket won’t send referrals and new deals your way, nor will they be willing to cut you some slack when you mess up. And the relationship you’ve built and nurtured is a gift that keeps on giving – and you can keep it for a lifetime unless you do something to jeopardize the relationship.
You are running a company, not a charity, and profits are important. But be mindful about the value of your network as well, because when your decision-making is based solely on numbers, you’ll end up ruining a relationship or two, and this eventually works against your long term goals.
Now, I know you are all wonderful people, your families love you, your friends respect you, and they all want to spend time with you. However, the interpersonal dynamic in business networking rests on interest.
Let’s say you want to include a specific professional in your real estate investing network. Something like, “I want to talk to them because they are successful, and I want to have them send a deal my way.”
If you are to make it as a real estate investor past your first year in the business, you have to reverse the relationship. What do you bring to the table? Forget about your own self interest and consider, for a moment: “Why should the other side be listening to what I have to say?”
Andrew did exactly that to build his network:
Why does he want to work with you? Are you going to bring him deals? Are you going to bring him a contractor? Are you going to bring him another financing source? What are you going to bring to the table? That’s how I really looked at it.
Have you heard the old proverb “one hand washes the other”? It means something like “I’ll help you if you help me.” When your goal is to work with other professionals, you have to start with how they’ll benefit from engaging you. So, no “I” sentences – Andrew says: “For the love of God, do not talk about yourself.” Simply listen to what the other person has to say and maybe you’ll even learn something new about the industry. It’s hard, but suspend the “I” thoughts for a moment.
In real estate investing, we talk a lot about nurturing leads, but we hardly ever talk about nurturing the contacts within a professional network. And building a relationship takes a lot of work, particularly if you rely on your social capital (your network is your net-worth) to close deals.
In his interview for our REI Marketing Nerds podcast, Andrew Dunn said that his goal is to start three meaningful relationships each week. His preferred methods are taking out a professional to a business dinner or dropping by at their office. And, since he has to nurture a lot of relationships, this means he is always in contact with someone in his network:
I think I do about 15 to 25 check-ins a week, just whether it’s via a text message, a phone call, an email, like: Hey, what’s going on? How have you been? How are the kids? Oh, how was Billy’s football game? How is your wife and how is your mom doing, man? I heard she was in the hospital. Oh, sorry, you lost your dad.
Of course, you don’t have to follow his example to the letter, however, do note that to keep your network alive, you need to invest in it. You may be thinking – if you take three different professionals to dinner each week, this will cost you some money. The bottom line, however, is that you end up with high ROI if everything works out. And if you’re trimming fat, you can use a one-liner text to check up with someone, but nothing comes close to the old-fashioned face-to-face meeting when you want to build a relationship.
I mean, yes, you can send a connection request on LinkedIn – there’s nothing wrong with that, however, it’s always more memorable if you drop into someone’s office with a bottle of wine. From that point on, you’ll be the guy who took the time to crash into their office with a nice gift, and that first impression is hard to beat.
When you label something as work, often that immediately takes all the fun out of it. Do your best to keep the conversation genuine so that the relationship remains meaningful (Andrew says “I hype people up.”). Otherwise, networking becomes just another task in your process and you know what we do with monotonous tasks these days (hint: we automate them, more on this below).
In its essence, real estate investing is sales, so you can learn a lot by checking out authors who excelled through their people skills – people like John Martinez, Grant Cardone, Jordan Belfort, Tony Robbins, Chris Voss, etc. It all boils down to the energy you put into creating the pool of social capital (there is much more than financial capital in your company) that your real estate investing business will rest on.
Let’s look at some tips for putting these principles into practice.
Real estate investors have three prime targets in networking: motivated sellers, private lenders, and realtors.
This is the group every real estate investor is after because motivated sellers are practically leads that are few steps away from closing a deal. The end goal is to obtain referrals and testimonials from satisfied house sellers, so everything you do in the process will affect the availability of word-of-mouth marketing for you.
In a nutshell, you need to listen and learn about the problem that motivates these homeowners to sell fast. If you find a way to help them solve the issue (bond over having a similar crisis in your own life that would help them solve theirs, we talked about this before) you’ll be remembered and you’ll increase your chances of getting a referral.
Speaking of referrals, never screw someone over for finders fees or commissions.
You can work with banks and mortgage brokers, however, it’s way easier to have private lenders in your network, investors who are willing to lend you cash, fast. The process of raising capital can take many different forms: you can collaborate with mom and pop investors, you can find long-term venture partners, or simply go to a private lender who is active in your real estate market.
These people are found in local real estate groups and clubs – they mingle there because they need real estate investors like you to increase their capital. The most straightforward way to network with them is to become a member of these clubs, and you can always take them to dinner, like Andrew suggested earlier.
If you bring profits to private lenders, they’ll come back for more, and once you build a good track record, they’ll ask fewer and fewer questions before they lend to you.
The relationship between realtors and real estate investors is mutually beneficial. While it is true that some real estate agents don’t really care about (nor understand) REIs, it’s easy to find common ground.
For example, realtors know the burdens of dealing with owner-occupied properties (people are attached to the house), so working with a real estate investor who is flipping or wholesaling a house comes as a relief for them. On the other hand, a real estate agent might have a hard time selling a beat-down property to would-be occupants, but a house flipper will have no issue because they intend to remodel it anyway.
Once a realtor finds out that you can close fast, they’ll send deals your way (including off-market properties) because they don’t want to handle the risks associated with completing the transaction in a few days. Real estate agents can help you fill a vacant rental property, too, since this means that they have found a place for their renters.
You just need to start the conversation. Chances are, there is already a real estate agent in your area that would like to collaborate with someone like you.
Does the thought of attending meetups with complete strangers, on a regular basis, fill you with dread? We live in antisocial times after all, and the virus isn’t helping either. Or maybe taking someone on a business dinner, face-to-face, sounds awkward? After all, you can easily reach everyone online if you wanted to.
The truth is – there was never a better time to do networking.
In-person social contact has never been easier. Most of the relationships out there (personal, business, or other) are reduced to posts and messages on social media networks. If you take the time to talk to a professional as if they are a real person – so not using an emoji or a like or a quick comment on their social post, but real meaningful contact – you’ve already taken it up a notch.
Remember, these are the people you want to work with in the next decades, so treat them as such to become a part of their network.
It’s only a matter of time when artificial intelligence will be introduced in real estate investing. Usually, AI brings disruptive innovation – it makes the established business processes irrelevant. And, yes, new algorithms will direct and improve business processes, and the possibilities for crunching data will grow. Big names in real estate are likely to be the first to implement these systems.
Networking is your leverage against these changes in the industry. An AI system can’t build rapport, an AI system can’t nurture a meaningful relationship, and an AI system won’t call you to help out when you are in a crisis – at least not yet.
The amount of leads you have on your plate is a reflection of the strength of your real estate investing network. Not all leads are obtained through the power of relationships, but having professional contacts with lenders, realtors, contractors, etc. in your local real estate group can boost the performance of your business.
Networking is easy if you follow the four principles: show vulnerability, be transparent, be reliable, and accommodate others. We all have a networking method that comes as second nature, however, there is a wealth of information if you want to learn and improve and it never hurts to learn.
And don’t forget, no matter how well-versed in real estate networking Andrew Dunn and Jesse Trujillo are, both of them are using our services to market their businesses online.
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