Find the right advisor
I got a call from a brand-new baby investor last week. The reason I describe him this way is because he had made the mental leap of wanting to invest in real estate but had not done a deal yet. He is still in the fact-finding scramble stage of trying to figure out where to begin.
I like this guy. He was younger, but had a good head on his shoulders. He was already reading books like Dale Carnegie’s “How to Win Friends and Influence People” and Rober Kiyosaki’s “And Rich Dad Poor Dad.” So as you can see, he was eager to learn.
We spent about forty five minutes on the phone, and it was a rapid fire question session. But as we talked, I noticed that I was not the only person he had been seeking advice from. He had a friend who worked for a title examiner that he had been asking questions. The issue I saw there was he wasn’t asking them questions about deeds or how the chain of title works. Instead, he was asking them where the best place is to buy real estate.
The problem with that was a friend working at a title examiner’s office isn’t really the person to answer that question. But he just assumed that because the friend was in a real estate-related profession, that they should have all the answers.
This happened again with me. He asked me about a part of real estate that I was not qualified to answer. When he did, though, I told him straight up I was the wrong guy to ask. I then went on to explain the need for the right advisor.
You see, we invest in single family homes. This includes flipping and renting out houses and mobile homes. And we are very knowledgeable in what we do. But if you started asking me questions about things like mini store all’s, vacant land investing, or commercial property, I’m the wrong guy for that. I don’t do short term rentals, executive rentals, or pad splits. So, you shouldn’t ask me about those either because they’re not my area of real estate expertise.
I explained to him that he should seek out the right advisor for the question he has so that he gets the best information possible.
I personally do this in a lot of different ways. For instance, I don’t use the same real estate agent for every property. Instead, I use the top agent for each of the three counties we work. The reason for this is I can often call the appropriate agent on my way to a house, and they can guesstimate the after-repair value over the phone with great accuracy because they know their area. This allows me to make an offer on the spot with very reliable information.
I also do this with teachers. You see, I have a mentor. His name is Bill Cook. He and his wife Kim trained me and Ahsley on most of what we know in regards to real estate investing from landlording to creative deal structing. But Bill and Kim challenged us to not just learn from them, but to go to the individual teachers that they learned from. This led us to Dyches Boddiford for entity creation and money lending, David Tilney for landlording and Peter Fortunato for creative deal structuring.
I have other advisors too. David Richter, for instance, is one of my financial advisors. He runs a company called Simple CFO. And before I meet David, our books were in a mess — not because we weren’t entering data. On the contrary. We have a great bookkeeper who is meticulous about keeping our information entered.
The problem was I didn’t speak QuickBooks, and my bookkeeper didn’t speak real estate investor. Because of that fact, I was telling her to put information in the wrong place. And that prohibited us from being able to understand our numbers. Thankfully, David speaks both real estate investor and QuickBooks. He was able to reorganize our books quickly and for the first time since we started our business in 2011, we were able to understand our numbers in real time, not at tax prep time.
That was huge!
So, as you can see, it is important to ask the right person the right questions. And if you are new to investing, make sure you realize real estate is a big field with lots of niches. And even if you are scrambling to figure out where to start, make sure you have the right advisor for the question you are looking for answers too.
Joe and Ashley English buy houses and mobile homes in Northwest Georgia. For more information or to ask a question, go to www.cashflowwithjoe.com or call Joe at 678-986-6813.