I hate flying. Not only do my arms get tired, the whole process has become encumbered with ridiculous charges and even more ridiculous assertions – like the fact that 3.5 ounces of shampoo has the potential to bring a Boeing 777-300ER widebody out of the sky and smash 396 passengers into the dirt. Really.
Sorry for that “arms tired” pun – too much CaddyShack, I guess. I used to fly so much that I had one of those super frequent flyer special god-like cards that often whisked me into first class. Trust me, it’s not all that glamorous, flying is just annoying and stressful; even more so now.
So, we drove to North Dakota last week, and the nice thing about a couple of real estate investors driving in the car is that we will often detour through interesting neighborhoods – because we CAN – with a fair amount of ooo’ing and ahhh’ing and the frequent exclamation of “send ‘em a letter”.
It made me think – how much different is real estate investing in Bemidji, Minnesota than in Madison, Wisconsin? Well not much, but the devil’s in the details. True, there are distressed properties and, more importantly, distressed owners, and the real estate law is similar, so what’s different?
For one, real estate investing is a contact sport, and what you need to play are lotsa contacts. From contractors to REALTORs to title company to attorneys to suppliers – all relationships that need to be built and nurtured. You can come into an area and start from scratch, but it takes time.
It’s one of the reasons in our coaching program that we introduce students to the people they will need to work with. So, no matter where you are, find someone that can introduce you to the people that you will need. A reference is 100 times better than cold-calling – on both sides of the equation.
The other thing about real estate being “local” are all the small nuances that you learn when you live and work in an area – the state of the real estate market, local customs, character of neighborhoods, building inspection processes and, of course, where to get the best coffee and tacos.
Where people looking at real estate investing have a disconnect is in knowing what this profession is all about. True, there’s lots of moving parts and technical aspects related to, say, rehabbing a house. But we can (and do) teach that over a period of 8 weeks, 3 hours a week. It’s all the other stuff that matters.
One of my favorite analogies is to liken real estate investors to surgeons. Not that this stuff is brain surgery by any stretch, but both the surgeon and the real estate investor are practitioners. The best way to see what I mean is to get on Netflix and watch Grey’s Anatomy from the beginning.
Grey’s interns come out of 4+ years of intensive book-learning in pre-med and full med programs at a university, and they still don’t cut anyone open until they’ve had a LOT of time in the O.R. with an attending surgeon that shows them the nuances to put their book knowledge into practice.
So, don’t focus entirely on the book knowledge – for sure, get some good schoolin’ – but focus more on finding your “attending investor” and let his or her knowledge and experience guide you and help navigate you around the mistakes and pitfalls; some of which can be costly (or cratering).
These things all contribute to the notion that real estate investing is local. It’s not the houses, it’s not the state of those houses, it’s not the distressed state of owners. It’s about resources, understanding, developed skills, and the support around you. If you don’t have that support yet, go find