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IT’S YOUR MONEY OR YOUR LIFE? (Part One)
We have attended hundreds of real estate investment clubs and associations and have come away with one overwhelming question: are they there to support you or is your presence to support their revenues? Are you “fresh meat for a feeding frenzy” of vendors, many with questionable strategies, or is this a group of serious investors genuinely seeking others with complimentary skills and resources to prosper as an investment community?
The Big Difference?
There is one key question: How do they keep the club funded?
Simply, does an attendee or new member have to pay fees for membership, classes or training? Not that reasonable fees are a handicap, but when these are merely “payment for a pitch,” particularly on a single one-size-fits-all investment solution it’s most likely more about their earnings than your investment. You know “learn about buying notes, and then come to my advanced class on buying notes.” This assumes the promoter knows what qualifies as a suitable investment for you. How do they know?
“Real real estate transactions” like a house sale, originating a loan, and property management, offer significant commissions and fees to the seller, so education classes that “teach you how to buy from the teacher” are “double dipping.”
At 2020 REI we believe an investor’s money is best invested in real estate. We it is consumed by expensive training learning and not invested in performing assets we question their motives. Are they really promoting education or real estate investment?
There are specific questions to ask before investing in anything but let’s not get ahead of ourselves.
WHAT IS THEIR END GAME?
- What’s the goal of the club?
Unless it’s directly about helping you invest, be skeptical. Missions that include networking, education and promoting standards are helpful, but they beg the question of beginning investing.
- How does the club fund events?
Running an event is not inexpensive. Are you paying to attend and, if interested, become a member? Are there many vendor tables? Are there featured speakers, offering ongoing training or selling investments.
- Who’s making money?
If so, these people are paying the organizer for the right to exhibit and speak. This is how the promoters fund events.
- Who’s Agenda?
Some clubs are formed to solely promote the organizer’s agenda so the organizer is particular who they let into the event so as to control selling by any one who is not a sponsor or a competitor.
- Do you feel like the main attraction or the main course?
Ideally you are here to research and learn about real estate as an investment class before you select a method of investing. If you are told you should be investing in notes, rentals or apartments, without understanding your interests, goals, capabilities and timeframe, be assured its about what they sell versus what you should invest in.
If there is lots of language about limited availability and special deals if you “act now,” on classes or worse still investments, you should do the exact opposite. Good investments take time to find, analyze, and acquire. There is an abundance of classes that are available, some good and so less so, but there is no scarcity.
Full Disclosure: 2020 REI Companies operates DFW Investors. This is a community for local investors in the Dallas/Fort Worth area that provides resources and discounted investment property listings available for purchase. It is open to anyone. Vendors can buy exhibit space and experts speaker slots. Attendance is free to anyone. For more information, receive emails or get meeting schedules go to DFWInvestors.com.
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