Who needs a REI mentor

I believe the answer is everyone. It is very hard for a "green" real estate investor to become savvy without enlisting the help of a professional, And by professional I mean someone currently working in that field not someone who brands themselves as gurus and sell books and tapes and that is all. I am not saying I do not believe in books and tapes because education is the key to wiping the "green" away however, books and tapes merely give you a "one size fits all" type of example.
For example, a book may say that Mr. White bought a single family residence (SFR) worth 100k for only 60k spent 5k to fix it up and sold it for 100k for a profit of a whopping 35k in less than 30 days. I understand that these type of deals may be true but they are few and far in between as a matter of fact I have never seen these types of deals in my experience. In all actuality realistic deals go something like this Mr. White bought a SFR worth 100k for 60k. Mr. White was planning to spend 5k to fix up but ran into horrible plumbing in the master bedroom and had to spend an additional 15k to correct this problem. When it was all said and done it took an additional 3 months so Mr. White had to pay 3 months of mortgage, 1500 p/m totaling 4500, he then placed it on the market and was only able to get 90k for it for a profit of $10,500.00. Mr. White also had to get a hard money lender to finance this property his fee was 30% of the profits which is $3150.00. Mr White also had to pay $500.00 to the bird dog who found the property and sent it over to Mr. White for a profit of $6850.00 for the 3 months of work, minus capitol gains tax.
As you can see there are many many many ways that your potential profits can dwindle into nothing or substantially less than you expected so my first rule is calculate all expenses (i.e. your fees, hard money lenders fees, bird dog fees, lenders fees, Realtor fees, construction costs, potential set back costs etc.) and that will determine what you can buy the property for.


Money is made during the purchase not at the sale thats just when the hard negotiating pays off!!

Please let me know if this was beneficial to anyone