The FINANCIAL — No business can survive in a vacuum. Just like retail stores need customers to walk in the door, and traveling salespersons need to “press the flesh” to consummate deals with corporate clients, most real estate investors need to network with other like-minded investors in order to purchase real estate – whether brick and mortar or intangible assets such as notes.
That is, of course, unless the investor is independently wealthy, in which case he or she can pretty much transact business in whatever fashion they want to.
Assuming that the average real estate investor either has not achieved that high status, or prefers to work with other people’s money instead of his or her own, the basic concept of networking has not changed, although the advent of the Internet has added another highly advantageous component or marketing channel to the mix, according to Renwood Realty Trac.
“The internet makes it very convenient to bring buyers, sellers and real estate professionals to the table when it comes to purchasing real estate — both residential and commercial property types,” says Rick Sharga, chief marketing officer at Ten-X, an online real estate marketplace. “But when it comes to raising capital, nothing beats traditional face-to-face interaction when it comes to matching up investors with a common goal in mind.”
Networking Through Affiliation
To Andy Heller, who along with his business partner Scott Frank has been investing in real estate for over 25 years, nothing beats in-person contact with other investors and the best way he has found to do that is through being involved with local chapters of the National REIA (Real Estate Investors Association).
“In my opinion it’s by far the best vehicle for an investor. If the city has a vibrant REIA they should become a member. They are communities of like-minded people with varying degrees of experience from newbies to seasoned investors,” said Heller. “Besides investors they attract real estate agents, building contractors and mortgage brokers. All the other tradespeople the investor needs to be successful.”
Even with the availability of online social networks for investors, Heller insists nothing compares to having local boots on the ground when it come to connecting up in the particular market the investor wants to working, and that’s what belonging to investor clubs is all about.
“Nothing comes close to getting active in your REIA,” he said. “The membership dues are very cheap, and the educational component is unparalleled.”
When it comes to networking at these groups, Heller recommends that the investor makes initial contact with the people running the REIA, requesting introductions to club members who are interested in the same area of investment — fix and flip, owning rental properties, buying notes, commercial property, development or whatever.
Once the introductions are made, offer to take those newfound connections out to lunch individually and spend time getting to know them and discussing how you can help each other achieve your investment goals.
In addition to the investment clubs, there are various real estate expos and events around the country that introduce newbie or wannabe investor to various types of real estate investment. While those events may be informative (and sometimes costly if the speakers are selling their investment programs), these events are most often more geared to supplying information than to being the most conducive networking environment.
Once an investor is committed to a particular investment vehicle, the best networking takes place at the local level at an REIA where there is exposure to investors at various levels of experience, Heller insists.
Networking Through Social Media
Whether you are on Facebook, Twitter, Instagram, Pinterest or Snapchat – or any number of other social media, communicating and socializing is not a problem. Anyone can do it who has a laptop, a tablet, a cellphone or any other device with Internet connectivity. Similarly, LinkedIn took communicating with other people to another level by adapting the social media concept to the business environment.
In the real estate space, sites like ActiveRain give real estate agents and brokers a place to communicate, while for real estate investors sites such as Bigger Pockets bring social networking to a massive audience.
However, all of these sites are national in scope. For an investor who wants to get down and dirty at the local level in select markets, one of the latest entries into the online frenzy is the Meetup group.
As a company, Meetup boasts that it is “the world’s largest network of local groups” numbering over 242,000 groups in 180 countries with 25.8 million members. Meetup groups allow people with a common interest, hobby or profession a place via the Internet to arrange face-to-face meetings to discuss their commonalities. In other word — to network. And it’s a trend that seems to be growing in popularity among real estate investors.
Investor Nick Tang knows a lot about Meetup groups. As president of both NewYorkREIA.com and PhiladelphiaREIA.com Tang has figured out how to use the Meetup group as a tool to raise investment capital by attracting investors initially to small networking groups that eventually grow large enough to offer educational opportunities as well.
Tang himself started out fixing and flipping houses before going on to buying apartment buildings and eventually real estate notes. Those experiences have taught him how to structure deals and raise capital.
Today he runs Meetup groups in three different industries, boasting the second largest business Meetup group in New York which grew from 1,000 members to 15,000 in three years. He also says he has the world’s largest real estate Meetup group numbering 7,000 members in all.
For investors looking to grow their sphere of influence and their pool of capital sources, starting a Meetup group is the way to go, Tang says. Initially, he recommends holding a networking event at a local bar or lounge that has available meeting space, that way there are less costs and less work involved and the group is using free space for its meeting. Later on when the group grows large enough you can consider renting space for meetings.
“In the beginning you’re just trying to get to know people,” said Tang. “The reality is, in the beginning you’re really trying to build that sense of community. Once the sense of community is there, it will grow organically. You do this to build a list. Once the list is built, then we start bringing them out to educational events with speakers from all over the country.”
However, his end goal is to personally make sure that everyone coming to the event is being serviced. If their needs are being met, they will come again and bring other people to future events. Once the group is growing organically, he can move on to promote other events.
“I figured how to build networking events really fast on Meetup,” said Tang. “Meetup is really just a platform in any industry you want. You have to know what you want. A lot of people don’t know what they’re there for. You have to know exactly who you’re there to meet. A lot of people don’t know why they’re at a networking event.”
Even with the Meetup groups and the social networks available today, Tang believes the general concept of networking has not changed. It is still a matter of two people talking to each other about what they do, what they are interested in accomplishing, and finding a way for them to help each other to meet their investment goals.
“There’s an infinite number of people to invest with you. You just have to know how to network. You have to master that. It’s just talking,” said Tang.