Pros And Cons Of Joining A Real Estate Investor Club
Joining a local real estate investor club 15 years ago was, overall, a very beneficial move for me. Although my focus shifted to commercial real estate shortly after joining, I still found the networking and information worthwhile. (Most investment clubs will tend to focus on investing in single family homes.)
In fact, it was through this real estate investor club that I met a gentleman who inspired me to move into the apartment building and commercial property investment arena in the first place. About eight months after meeting this person I put together my first commercial property deal that ended up making a profit of over $2 million. Based on that deal alone I think that the experience was worth it.
Most real estate investor clubs meet once a month and will typically bring in a different guest speaker who will "lecture" on a different topic. Although this information can be very useful, I will give you a warning (and point out one of the "cons"). If you find that the monthly speakers are always trying to sell their "books and tapes" at the back of the room, then I would start to seriously question the validity of the club and it's true intent.
In the five or so years that I belonged to my real estate investing club, very seldom did any of the speakers hock their wares. Most of the speakers were local experts, ranging from lawyers and accountants, to property managers and bankers.
Now, the club I belonged to charged a monthly fee of about $200. It was definitely a money-maker for the gentleman who ran it, but this is not always the case. You will find that many of the real estate investor clubs are free to join and attend.
What about networking opportunities and finding partners and investors?
Two examples spring to mind.
In order to put together my first commercial property deal I was going to need some investment capital. I had a few options available to me, one of which was to take on a financial partner. One of the members of the club was a successful apartment property owner and so I approached him to potentially partner on this deal. He was very interested, and after seeing the deal, he was prepared to invest (it was a great deal). In the end I opted to raise the cash elsewhere and keep the deal 100% for myself. But had I not been able to do that I surely could have given up a chunk of the deal and taken on a partner to make it happen.
A second example that comes to mind involves raising investment capital for a real estate syndication (limited partnership) I put together. Although you will find that most members of a real estate investor club are interested in doing their own deals, there are people that are looking for real estate investment opportunities to put some cash into. This is especially true if you can put together larger commercial deals that the average real estate investor could not do on their own. Providing them with a piece of a larger deal is sometimes very attractive. This was exactly what I brought to the table and the contacts that I had made in the club allowed me to raise the cash to put the deal together.
Now, things have changed a bit in the information sharing and networking arena since I joined my first real estate investor club back in 1994. There was no internet to speak of (certainly not like we have today) and networking with other real estate investors was typically limited to local property investing clubs. Like I said, things have changed.
A good example of this is an Apartment Building and Commercial Real Estate Investor Club that I came across on the internet a while back. It was started by a colleague of mine and is undoubtedly the top commercial real estate investor club on the net today. Darin (the gentleman who runs it) is a commercial realtor who is in the field ever day.
And that is important.
Darin is also a real estate investor. That's also important.
You can learn more about the club, Darin, the monthly fees (they are very reasonable) etc.
here. (opens a new window)
There's probably no better place to meet like minded real estate investors and learn from a pro on a monthly basis.
And speaking of reasonably priced "monthly education"...
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