Building relationships in real estate investing is just as profitable as building houses and selling them. The value of each new relationship you cultivate can not really be measured by simple metrics like dollar value. Think to yourself how much could your next Joint Venture Partner be worth – 50,000, 100,000, over 7 figures? These partners in your real estate career should not be looked at for just the deal you could work on today… but in terms of all the deals you could do together (or refer to each other) over the lifetime of your real estate investing business. Often, when we have a deal on our desk either 1 of 2 things happens: first, we could send that deal out to our mailing list and see what happens (sort of the throwing spaghetti at the wall to see what sticks) or secondly we could start sitting down with all the contacts that we think could be interested in the deal – which I think would be a much better option. However, all of those coffees or lunches will only be possible if you are constantly in close, engaged, contact with your network and you know what they need and when they are looking for it. Harder said that done – but this type of knowledge of what your contacts are looking for will shorten the average time to deal close like nothing else in your real estate toolbox. Making a habit of reaching out and meeting with your contacts in person also helps your mind-share from their perspective as well so you start to become the investor that they call when they are looking for help or a deal of their own – which you might just have sitting on the corner of your desk forgotten about! There are invaluable insights into marketing strategy, deal structure, what to watch out for with tenants, that your network will share with you once they are on the other side of that coffee table…you never know what you might learn that is working for them that could work just as well for your line of business in real estate. I also think that you should never be doing all the work in your real estate business and working with your contacts will lessen the load on complex deals that take a lot of due diligence, extensive renovation projects, owning multiple single family rentals, evictions (who wants to be in court anyways?) and many other areas that having a second pair of hands/eyes will make your days a lot smoother. Having partners that you know well, like, and trust can be challenging because those investors are people just like you and I and they make mistakes – this could cause issues, but how these problems are dealt with is what matters. If your partner and you have built a friendship as well as a business partnership then you are more likely to get to the other side of the obstacles relationship intact – this is the true value of creating “sticky connections” with those that are willing to stick it out with you when the project isn’t going well as well when things are all aces!
To your success!
Tim R