Editor’s Note: Dennis Fassett is a former corporate finance executive turned real estate investing “Cash Flow Mercenary.” Dennis specializes in single-family and multi-family cash flow properties and thoroughly enjoys assisting his fellow investors with their own strategies, including how to buy your first apartment building.
As an ongoing contributor to Mogul’s “Market News Updates,” Mr. Fassett provides us with his own unique, lively, and thought-provoking commentary on the timely industry news and events of today that are impacting our industry. And be sure to check out his other super-helpful Market News Updates. For now, enjoy...
From Dennis Fassett, Cash Flow Mercenary...
I’ve been shaking my head in sheer amazement over the past couple of weeks…
Amazement and astonishment, actually.
The source? Facebook – as usual. A couple of real estate “investor” groups in particular.
Why?
Because of the incessant stream of folks flowing through those groups who either:
a. want to be taught everything there is to know for free
or
b. are teaching themselves the ropes because they don’t want to pay to learn
Let’s take a look at both groups…
Not a day goes by that I don’t see a request for somebody to “teach me everything for free.”
They’re pretty much the same every time. It’s either, “you should give back”, implying that they’re the one deserving charity, or it’s “trade teaching for help.”
Both approaches are disappointing and, in my opinion, severely damage the credibility of the person asking.
The “you should give back” approach implies that those of us who are experienced investors don’t care about anyone but ourselves, and that we don’t support causes that we care about.
Nothing can be further from the truth.
Some of my real estate colleagues are the most generous people I know. And also, in my local market, a group of investors got together to create a Go Fund Me account for a couple with very young kids who was victimized by a shoddy rehabber.
And don’t get me started on the asker thinking they’re deserving of charity. Let’s not even go there.
If I had a dollar for everyone who has offered to “help” in lieu of paying for training, I wouldn’t need to do any more investing. It happens that often.
Let’s look at some numbers.
After talking to several of my colleagues, I have an idea how much a bunch of them earn per hour with their investing activities.
It’s way more, but just to be conservative, let’s say that they average $100 per hour for everything they do in real estate. (Again, it’s way more than that.)
So if you’re new and looking for instruction, someone who’s experienced is going to have to divert some of their time away from their $100/hour activities to teach you. And how much are they going to make per hour doing that?
Zero.
And so the experienced person is going to need to work more hours to cover the time they spent with you.
The issue with offering your help as a new person is that, since you’re new, there’s not a lot you can do to help that we aren’t already getting done pretty efficiently with virtual assistants who are making $5–$7 per hour.
Personally, I’m not opposed to hiring a new person to do the work I outsource to VAs, but you should see the look I get when I offer them an opportunity that pays in that range.
You’d think I had just insulted their mother or something.
My recommendation?
If you truly want to learn, then take a VA job with the low pay. It will give you an opportunity to be around someone who’s doing what you want to learn, and you’re bound to learn something from the experience.
On to the doers.
Now let’s talk about the second group – the “I‘m going to learn the ropes myself” folks.
I have a lot of respect for these folks because they’re taking action and some of them make good progress and become successful after a time.
But that’s the issue. It’s time.
It’s pretty much everyone’s biggest constraint, and the clock keeps ticking no matter what we do.
I bring this up because in one of the Facebook groups, I read a post by a woman who shared her story…
She started from scratch and didn’t want to pay for education. So she learned from YouTube and a number of other online sources.
And she ended up being very successful, or so she claimed.
The downside to her success?
It took her 3 long years to do her first successful deal. I say successful because she talked about getting bad advice along the way and making mistakes because of it, all of which significantly postponed her success.
It was heartbreaking to read, actually. Because she had wasted all of that precious time.
Listen…
I’m a big fan of education. I went to college, then went back to get an MBA, and that opened the door to an investment banking job, and so on and so on.
Paying close to 6 figures to learn from some of the top minds in the industry directly led to the opportunities I found after graduation.
Education has a way of doing that for you.
So when I started my real estate business 12 years after earning my MBA, what did I do?
I sought out some of the smartest and most successful people in the business and I paid them for an education.
Was it cheap? Hardly.
Was it worthwhile? Beyond a shadow of a doubt.
Why do I say that?
Because even with that expensive training, it still took me 11 months to get my first deal. But I kept at it because the people I learned from told me to keep turning the crank and keep working the process and success would come.
Did I have my doubts?
Of course. But they had done it before so I trusted the process.
And when success did arrive, it hit like a dam bursting. And I’ve never looked back.
So my advice to you if you’re just getting started is to heed Bok’s Law, which states:
“If you think education is expensive — try ignorance.”
Talk to me
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