What to Look for in a Commercial Real Estate Mentor

I've had a total of four mentors my entire life. I even have one today. I want to teach you what to look for in a commercial real estate mentor, and how they can help you fast track your commercial real estate goals. The mentor you might be most familiar with was Robert Kiyosaki. He truly changed my life and I would love to share with you the story of exactly how he did this.

Robert Kiyosaki

When Robert Kiyosaki was my mentor, we were at a "Rich Dad" event with about 20 other people. It was a close knit group that he coached personally for four years. We would meet up at a hotel in Scottsdale, and learn about real estate until 11 pm at night.

So we were sitting at one of these meetings playing, "Liars Poker", which is a game where you challenge your mindset and your boundaries. At the end of the game, I had totally blown it. Robert was sitting on a stool, when he looked directly at me and called me a loser. Here my mentor was, calling me a loser, and it completely shocked me.

He told me that he wanted to motivate me bcause he saw the potential in me, but thought I was taking the easy road in life. So he shook me, and from there on out, my real estate investing just took off. I needed that kick in the butt to get things done.

My Other Mentors

My first mentor's name was Nick. He was the mentor that believed in me, because we all need someone to believe in us. I also had a mentor named Curtis who gave me the tools, the methodology and strategy on how to be successful.  Finally, me mentor Ron had a mutli-family portfolio that produced C$83,000 a month, which is significant cashflow. Well he taught me how important operations are in the investing business, and to know my operational numbers on an intimate number.

Who Doesn't Need a Mentor

There are basically two groups of people in the commercial real estate world. The first group, most likely own commercial real estate by default, such as an inheritance or family business. This group also includes people that only want to purchase one deal and that is it. These people do not need a mentor.

If you are part of this group you don't need to invest in advisors to help you, because you can figure it out on your own. You can hire a real estate agent to help you find a deal, and then you are on your own.

The Second Group

The second group is the group that I work with, which is people that want to do commercial real estate with purpose. These are the individuals that want to invest full-time, or in order to leave their job, or build a retirement nest egg. This group will need a commercial real estate mentor.

If you are part of the second group, you have a big decision to make, because hiring a mentor will cost you money.  But the good news is, mentoring provides you with a shortcut. It helps you to achieve your goals faster. I would not be where I am today without having a mentor.

In fact, my being a mentor, actually gives me an unfair advantage. Everyone complains about lack of deals in the market, but I get to view hundreds of deals every week because I work with students all across the country.I get to oversee and close on deals every single month. So if you are a person in the second group, you need an advisor to help you evaluate and find deals on the market.

Commercial Real Estate is a People Business

Relationships in this business that you nurture and develop will help you raise money and solve problems, in order to increase your cashflow. One thing I focus on with my students in our mentoring company is the relationships they find and grow.

You often hear people say that your real wealth is the network of people that you know, and that is so true in this business. You will run into a lot of problems in this business, but these problems can be solved by reaching out to someone that you have a relationship with.

My Secret

In this day and age, we have the internet, email, and texting, which are all ways of avoiding human contact. We have to remember that this is a people business, and people want to work with people they enjoy working with.

One secret to my business, is that after you speak with an agent, property owner, or some type of industry professional, if you foresee a business relationship, send them a thank you note. Send them a card that says," I just wanted to let you know that I appreciate the time you spent with me today." Then put the card in an envelope and mail it to the person, because people really appreciate personalized letters.

Then when the time comes that you want to reach out to them, they will pick up their phone when they see your name on the caller id, because you sent them that letter.

How to Know it is Time for a Mentor

In 2012 I began doing triathlons, but soon discovered that I was struggling with the swimming part. Some friends suggested that I get a coach, but because I was older, I thought I could train myself. But guess what? Even after trying to train myself, I was still getting the same results at every event, and not improving at all.

So I decided to get a coach. Her named was Rachel and she was a personal trainer that was a phenomenal athlete and had done a gazillion triathlons. We started working together and after adjusting my diet and the way I was training, I actually was able to work out less. At the end of the day, I got faster and had way more fun doing triathlons.

So a person needs a mentor when they get to the point where they can get no further on their own and are feeling frustrated.

Market Cycle

Market timing goes through ups and downs, and I am stoked for the next one coming up, which I expect to happen in three to four years.

In real estate there is a different market curve for each type of commercial properties. So an apartment building and an office building located in the same city, could be in totally different phases of the real estate curve.

Only Invest in One Asset Type

My solution is to focus one asset type at a time. Become good at one type of property before investing in another. You have to consider the demographics, politics, supply and demand, and social patterns for each asset type. I also consider the taxation, job market, income growth, and all general market sentiments.

Types of Commercial Property Assets

• Apartments
• Offices
• Retail
• Mobile Home Parks
• Self-Storage
• Mixed-Use

Market News

There is no such thing as a national market. Some of the information you hear on the news, might tell you how to the market is doing, but it is not true as a whole.San Francisco's apartment market is completely different from New Mexico's apartment market. There are sub-markets for each location and on each asset type, so to be successful in commercial real estate you must understand your sub-market.

Expectations in Commercial Real Estate

If you wanted to become a commercial real estate agent, because you wanted to make it big and become very wealthy. It would take you three to four years, just to be able to pay your bills. This is as an agent, where you need obtain experience in order to get the clients, find the properties, and obtain a good track record.

Real Estate Investor

As a real estate investor, I would say you need to bust your butt for one year. Three, six, or even nine months is not going to cut it. You need to take big action in commercial real estate because there's lots of competition and it keeps growing every day. Back in 2003, I did my first commercial deal as a 1031 exchange. There was a plethora of deals available for me to choose from, but nowadays that is just not the case. So if you think you're going to get into commercial real estate and close on your first deal within three months, that is probably not going to happen.

How a Mentor Helps

A mentor will better your chance of it happening because it will fast track your results. In our program, I can teach someone a marketing method to put in front of property owners in less than a month. I have developed my methods and teachings over the course of years by working with students and doing my own deals. It took me a very long time to perfect and grow that process

My best students are the ones that showed perseverance. When things got tough, or deals dropped out of contract, these students never gave up. The most successful students are those that join wanting to be successful, really, really bad. They are the easiest to coach because they are willing to do all of the work that I put in front of them. So having the most money in this business does not qualify you to be the most successful in this business. It's the people that want it the most.

An Example

I had a student named Vicky, who came to me right after her divorce. She told me that it was a very bad divorce that involved abuse, so she was now a single mom. She wanted to invest in commercial real estate, in apartments in particular. So I taught her how to analyze, evaluate, and set up financing for deals.

How She Raised the Funds

She had about $40,000 and a credit line, and wanted to put the money towards an apartment complex,  She raised the money by approaching a client of hers that she had known for many, many years.  She wanted to purchase a 64-unit apartment complex, and he funded her entire down payment, and they are now 50-50 partners.

The property was in great shape, but did not qualify for financing because it was only 50 percent occupied.  So she purchased it through creative financing with a "Master lease agreement", and after two years of busting her butt to raise the occupancy and stabilize the property, she was able to afford permanent financing.

At the end of the day, she created a million dollars in equity in one property. She put in no money herself, thanks to her investor, and still has a $40,000 credit line. The property is worth $2 million more now than it was when she bought it two years ago.

What to Look for in a Mentor

1. The mentor should have a track record of success.

They must own a lot of commercial real estate, because commercial real estate is a business. You have a staff, city laws and ordinances, housing laws, utilities, and many tenants. You need a mentor familiar with all of the operations of a commercial property.

2. The mentor needs to be available

I found this out because I realized that my students are about to make the biggest, most expensive purchase of their lives. It would be very cold of me to backoff right before they close their deal. How dare I not be available for the most important purchase of their life.

3. Every Mentor Should Make their Money from Commercial Real Estate

I believe every mentor, should make the majority of their income from commercial real estate deals and not mentoring. They should own commercial properties because they need to understand how to do teals and create training from these deals.  Everything you see on my YouTube channel is from good and bad deals I've done over the course of my life.

4. Your Mentor Must be a Good Teacher

I believe mentors need to be good teachers because that is exactly what they are doing. We call the people that join our program students because that is exactly what they are.There are attributes that make a good teacher and a bad teacher, so you have to look for them.

5. The Mentor Should be Invested with the Student

We actually share in the profits from our students. They pay a tuition, and then we share in the profits. So if they don't make money, we don't make money. There's an investment on both sides.

Tuition

First each applicant goes through an extensive interview process. In our mentoring company, I am the only coach because I do not trust anyone else in making these big decisions in people's lives. I don't have time to coach 100 people a year, so there are only a select number of people chosen each year. Then, once they make it in, there is a tuition to pay upfront, that we call a retainer. After that we split the profits 50/50 up to $250,000. After they make that $250,000 the split goes away and they keep all of the profits, even though I still help them close deals.

Find a Complete Mentor

Students are not a number, they are human beings with desires and goals. You need to find a mentor that will not only teach you how to evaluate and find deals, but who will also stick with you to help operate the property.