In this article, we will identify the top five risks associated with not utilizing a mentor or education platform.
We have learned through our years as investors that good multifamily investing comes down to:
Education x Action = Results.
It’s great to take massive action. But if you’re not educated, you can fall flat on your face. When I first started investing in real estate, I was taking massive action. Unfortunately, I was lacking in education, and made some crucial mistakes that made me realize that I needed to get educated. My next step was to identify multifamily as my niche to invest an, and seek out a company that specialized in multifamily real estate education. It was one of the best decisions that I ever made when it came to investing, and partnering with Jake was the only decision that was more impactful.
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Right investing decisions can transform your life, but just notice we said "right". Often investors get carried away and end up into making decisions that result in a fiasco. Having an experienced Mentor is thus an imperative to develop a roadmap, stay on track, avoid pitfalls and achieve success. Watch out the video to know how Mentors can help you. Notably, Jake & Gino have achieved tremendous success in the Multifamily Investing space, commanding assets worth $100 Mn+ with 1600+ units. Do not hesitate to contact us, if you have any queries regarding real estate investing. Thank you. Jake & Gino Team
Jake & I proceeded to create Jake & Gino and introduce our Three-Step proprietary framework Buy Right, Manage Right & Finance Right so that investors had a proven path to follow.
Let’s dive into the first risk.
- The Three Pillars of Real Estate:
I want you to write these three pillars down. The first one knowing that the Market Cycle is truly important every time you analyze a deal, and understanding where part of the cycle your market is in.
The second one is Debt. What kind of debt are you going to secure?
Multifamily has different sources of debt, as opposed to residential. Have you connected with a broker to discuss the various options available to you?
And a third one is the Exit Strategy.
What’s your exit strategy? Are you going to Fix and Flip? Are you going to buy and hold long-term?
You have to look at all three of thes components and understand how they work in a deal to make sure that this deal is a buy and hold, or a sell. Focus on the Three Pillars!
- Not Being Able To Assess Risk:
If you haven’t been in the game before and you don’t have a coach working with you, you don’t know what you don’t know and that creates a huge vulnerability. With a coach, you can bounce ideas off them and get instant feedback. A coach can advise you and guide you through new scenarios and can offer additional strategies.
I had a coach on our third deal. It was amazing. My coach was right there with me every single step of the way with that deal, whether it was putting the letter of intent in, the purchase and sale agreement, going through due diligence, closing, taking the property over. Those were all new
steps for me, and my coach actually led me through each one of those processes. It saved us countless and countless thousands of dollars, having that coach by my side. And once I went through the process, I was able to replicate the process on our next deal!!
- Not Knowing All The Strategies:
When Jake and I first started, all we knew was buy and hold by ourselves.
We had no idea what syndication was, owner financing, how to joint venture with other partners. If we did, it would have shattered some of our limiting beliefs and led to so much more growth. Coaches and mentors will be able to teach you the various strategies in multifamily. You will learn that each of these strategies is a “tool” in the toolbox, and you will know what “tool” to use for each deal that you analyze.
- Lack of Team, Vendors and Community:
One of the great things about the Jake and Gino Community is our private Facebook group. All of the students interact in the group, post questions, look for partners and deals, and utilize it as another tool to learn. We also host live events, weekend boot camps where students can network and meet our vendors, and learn from our entire staff.
It is a fantastic way to surround yourself with like minded individuals. One of the keys to success in life is proximity, surrounding yourself with a community that supports you and holds you accountable. When times get tough, it’s always nice to be able to lean on that community for help and inspiration.
- Due Diligence Process:
Due diligence are two of the most important words for any investor. An investor has to truly understand and learn the due diligence process when acquiring a multi-family. There’s a lengthy due diligence process and there’s a lot of steps that you need to take. It was reassuring for me to have my coach walk me through the due diligence process on that deal. I avoided countless mistakes that I had made on my previous deal, such as not looking at bank statements, tenant leases, analysing the T12, performing rent comps, diving into the legal due diligence.
Click HERE! to read our blog on our Three-Step Due Diligence Framework.
We hope that you’ve enjoyed this article. Please leave us a comment below with any risks that you have experienced in real estate if you haven’t used a coach or mentor.