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August 04, 2005Real estate investment clubs
Dean Foust
Came across this interesting article over on MSN's Money site on a topic I'd been meaning to discuss: the boom in real estate investment clubs -- which have roughly quadrupled in number, to 178 in past three years. Granted, as author points out, that's nothing like the boom we saw in investment clubs in the late 1990s (which soared to more than 36,000). Just as individual investors had the NAIC to help them form an investment club, there's the National Real Estate Investors Association, which will help you set up a real estate investment club of your own. Even in my own neighborhood, I have friends that have been trying to twist my arm to join them and other friends to go in together and buy rental properties.
Forgive me for once again being bearish, but I'd be wary of starting a real estate club at this late date, particularly if you don't have the deep pockets to ride out a downturn. Reason: The growing gap between housing prices and rental values in many booming markets. Given the explosion in prices, I think you'd be hard pressed in some markets to generate enough rental income to cover your mortgage payment. And if prices fall, you have no easy exit strategy -- you're stuck, underwater, for years to come. But that's the bearish view. Are there readers who have formed investment clubs in recent years that are working out?
12:08 PM
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Dean Foust at Business Week Online has some thoughts on Real estate investment clubs. He takes the “bearish” view that it’s too late to start one; I take the equally bearish view that it’s a few months too early. Assuming that... [Read More]
Tracked on August 19, 2005 03:30 AM
Comments
We've seen triple the number here on Hilton Head Island, SC over the past year....On the heels of a cooling market.
Posted by: William Head at September 21, 2005 06:45 AM
Dean,
Many of the investment clubs which are popping are there for one purpose only - to make money. They bring in a guest "guru" to do a one hour talk then a sales pitch to buy their latest course or seminar.
There's very little education that really goes on. The resources are nonexistent.
So - beware of joining just any investment club.
There's more to being an investor than just being a landlord. I've been a full time investor for more than 10 years. The objective is to get a steady flow of leads coming in so you can sift and sort through them to decide which ones to keep. Some leads work out great as a cash flowing rental property, some work better as a rehab project to buy, fix and sell, some work better as a wholesale flip. Any leads that don't fit my buying criteria, I pass on to other investors through one of my web sites - for a small profit.
The point is, there are plenty of wasy to make money with real estate.
About five years ago, I started the first online member based real estate investment club. It's still going strong today. Each member has an exclusive for their county. I provide all the marketing tools to keep that steady flow of leads coming in and provide a forum for discussions and strategy and a support group.
If you negotiate the deal right, you can get great cash flow for any rental property. If you go the conventional route and get bank financing, it will rarely work out. Many sellers would rather have a monthly check than a lump sum settlement when they sell. Instead of going to the bank to borrow money ( and paying all those loan fees), you simply offer to pay the seller some money down now and monthly payments that the house can afford and still cash flow. So, the key is to being a successful investor is (1) getting plenty of leads coming in to pick from, and (2)learn ways to buy with creative financing.
Jackie Lange
Dallas, Texas
www.SellYourHouseIn7Days.com
972-496-6032
Posted by: Jackie Lange at October 26, 2005 10:27 AM
I can see why you have a bearish view on investment clubs Dean, but they are very useful tools. Although in many cases, as Jackie points out, they are designed to be moneymakers for their founders, there are still many great clubs out there.
I disagree with charging members hundreds of dollars a year to be a member of a club. I also disagree with calling yourself a "Guru" and selling your books/courses/materials for hundreds or thousands of dollars.
Becoming a real estate investor is like getting into any business. You must do your homework and understand the basics. The good clubs provide a forum for people to learn and network at. They bring in informed speakers who can educate investors in differing aspects of the investing process. They are great places to meet other investors, agents, contractors, mortgage reps, and others in the "biz". In addition, they are also great places to find a potential mentor; as in most other trades, mentors are extremly important!
Joining one of these clubs is much better way for investors to spend their money, especially if you consider the alternative of buying some late-night course sold for the introductory price of $799.99.
Whether the overall housing market is rising or falling, there are always opportunities out there to make money investing in real estate. You just need to have enough information to do it. Just as in the stock market, you can get rich as either a bull or a bear -- there will be opportunities no matter what!
Joshua Dorkin
BiggerPockets.com Real Estate Investing Community
http://www.biggerpockets.com
Posted by: Joshua Dorkin at March 17, 2006 08:00 PM
A Real Estate investment club is a good way for people to get information and find contacts. As with any business, be diligent and see what is opinion versus fact. Use the investment club as a stepping stone to your business.
Posted by: joni sears at April 9, 2006 03:04 PM
Hi my name is Brandy Carber and I am a Realtor in Louisiana with RE/MAX. I would be very interested in becoming an exclusive agent for investors seeking properties in Louisiana and Mississippi. I have listings for sale offering cap rates starting at 10% to 15.7%. Please advise if such position is available and what I need to do if there is a opening. Thanks in advance!!!!!!
All the best,
brandy
Brandy Carber
REALTOR
RE/MAX Real Estate Group
225-768-7600 office
225-337-4972 cell
225-768-8866 fax
brandycarber@remax.net
Posted by: Brandy Carber at June 24, 2006 01:11 AM
Real Estate Investor Clubs are very useful tool for a beginner and expert investor. I see Real Estate Investor Club as an association where like minded people come and get motivated, get knowledge, build relationships and make deals happen! If you are new investor there is no better way to join local real estate investor club and get in the game! New investors can easily understand who are the real players in the market. I believe that most of the real estate investor clubs have annual fees in $100-$300 range which is very reasonable. We have started our club in September 2005 and we are already at 130 members. So I disagree with Dean's view about getting into game late. I believe that this is the best time to start business if you know what you are doing. Since most of the beginner investor don't know what they are doing; joining Real Estate Investor Club is the best thing they can do.
Posted by: Janak Mehta at July 5, 2006 11:14 AM
do you guys do African real estate? Im Kenyan
Posted by: Eric Kimathi at July 17, 2006 04:02 AM
Looking for a real estate investment club in Shreaveport LA.
Posted by: Roger Studebaker at August 21, 2006 10:21 PM
Real estate clubs are great for beginners and advanced investors alike.We have over 1,000 members here in Orlando at CFRI. I teach beginners how to find deals even in a hot market.
I bought 26 homes last year that all can be directly or indirectly attributed to things or people at our investment club.
I would highly recommend it to anyone.
Posted by: Todd Hutcheson at September 15, 2006 03:19 PM
I'm interested in being a Real Estate investor. I just got back from a Russ Whitney training class and was very disappointed about the coaches. They were very unprofessional. They wouldn't sit down with my husband and me to discuss how we were going come up with the money to further our education in their program.
Can any one help us get into this business without paying the outrageous tutition for the schooling? I know you have to spend money to make money, but there must be an easier way.
We don't want to live paycheck to paycheck any more. I'm unemployed right now and can't pay the bills.
Posted by: Claire at September 17, 2006 12:29 AM
I'd be interested in finding out more about investment clubs in Kenya
Posted by: jo Print at October 29, 2006 01:51 PM
I want to joint a real estate club that is located in new york,and texas i want to buy
small apt units of six and four units for
cash flow increses.
Posted by: verolyn wood at November 13, 2006 12:20 PM
my name is calan, im a 21 year old college student who just got his real estate license. i live in brooklyn new york and i need help starting out in real estate i would love to learn how to invest properly it beats the other alternatives my surroundings has to offer contact calan 718-758-0600
Posted by: calan vassell at November 13, 2006 07:41 PM
Am looking for a list of investment clubs in East Africa - Kenya and Uganda would be good. I see a couple of others have also asked for Kenya - please coudl you list them for us or mail them thanks
Posted by: Diana Carson at November 29, 2006 07:58 AM
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