As a real estate investor, a great way to get any type of lead (buyers, sellers, investors, etc.) is by networking.
Simply put, networking is getting to know other people and letting them know you. You have to let people know what you do and what you’re looking for, and do the same for them. When you establish relationships with people, often you can help each other out. Networking can be free but very powerful.
How to find people to network with
One of the best starting points is to find a local real estate investment club. Most areas have at least one. They’re all a little different, but basically it’s a place for real estate investors to get together and support each other. Sometimes people in related fields (like real estate agents, contractors, mortgage brokers, etc.) will meet too.
If you don’t already know of a local group, here are a couple sites where you may be able to find a local group:
Bigger Pockets is a good way to find other investors and real estate professionals in your area too. You can search for people near you. Here is a page on their site for events, so there could be something in your area:
Another good source is Meetup.com. You can go there and find groups of people who meet regularly. You can search for different categories, like real estate.
You can also just search on Google for “real estate investment group”, along with the name of your city or area. For example, “real estate investment group Denver”. You can try other variations, like “real estate investors group”, “real estate investors club”, etc.
If you can’t find an existing group, start one. Almost every area has investors. Likely, the investors in your area would like to get together.
What To Do
When you go to these meetings, pass out your business cards liberally (by the way, click here if you need cards). You want to get the word out to these people that you buy houses! (Or maybe you’re looking for cash investors, or wholesale buyers.) These are obviously going to be the people who come into contact with deals almost every day. They often run into people who need a quick solution to their real estate problem. These will be people who are motivated and willing to work a creative deal.
Even real estate agents are going to come across people who want to sell their house, but do not have enough equity to pay the agent’s commission when the house sells. This type of seller could be an ideal candidate for a lease option or some other type of deal where you take over the payments on their house, then turn around and resell the house on creative terms. By simply giving the agent a reason to refer this type of seller to you (for example, a referral fee of a couple hundred dollars), you can create yet another source of leads for motivated sellers.
Networking can also include taking out a local mortgage broker to lunch. You can discuss having them refer people to you over these lunches. Many times, mortgage brokers deal with sellers who are trying to get qualified for a mortgage for a new home, but can’t because they have not sold their old house yet. These are sellers that could be referred to you.
Networking also includes simply hanging out with other investors. At some point, another investor may get a lead that they do not have a solution for. If you are able to work some sort of deal from this lead, this could become another deal for you. Also, if this investor ever wants to get rid of his own properties, who is he most likely to call first?
Now there are also ways to network online. Bigger Pockets is a great community. One of the nice features is that you can search for investors (and other real estate professionals) in your area. You can connect with them and send them a message to introduce yourself. Facebook is another possibility. There are online REI groups, and some areas may even have a page or group for investors in a certain city.
Generally, face-to-face connections tend to be stronger than ones that are only online. So whatever you can do to connect in real life is best. But at the same time, you don’t want to overlook opportunities online. It could be that you initially find a person online but could meet up for lunch or arrange a small group to meet together.
What Not To Do (Cautions)
One warning on getting deals from another investor. Many investors will squeeze all the profit out of a deal before referring it to you. Make sure that you confirm numbers and don’t buy into a bad deal just because another investor referred it to you. Maintain your same due diligence and buying criteria when handling a deal referred to you by another investor.
Another word of caution. When you meet a new person who you think could be a great contact to have, don’t just immediately start asking for things. Nobody likes that. A busy, successful person doesn’t want someone to latch onto them and start asking for favors. They probably get that all the time, and they’ll probably try hard to get away from you a.s.a.p. Also, don’t talk too much about yourself. Don’t launch into talking about how great you and your business are or a bunch of things that are irrelevant to them. Ask them questions about themselves, things that they will feel good about talking about, but don’t cross the line of being nosy. For example, some people may not like it if you ask how many rental units they have, etc.
Most of us like telling our opinion about things, so try to get the other person to talk as much as possible. Don’t lie or pretend to be something you’re not. And be a human. Many of us tend to get nervous meeting new people and don’t know how to act. Just be yourself and take a sincere interest in the other person.
Genuine commendation and compliments can go a long way, but don’t fake it. Everyone can tell when you’re faking it. Try to establish some sort of connection before even thinking about asking for anything from them.
How many people will you make contact with today? This week? This month? Set a goal and go do it.