After reading this step you should see the value of property coaching and be equipped to be able to select a property coach.
Have you heard of a sportsman succeeding at his craft without a coach? In his post-match interview, Wimbleton champion Andy Murray praised his coach! Like many other sportsmen and women, he values his coach, recognises his value and gives him a massive bonus for every grand slam win!
In a recent article, Robert Kiyosaki, author of Rich Dad, Poor Dad wrote;
Today, I encourage you to begin your financial education and to move from the risky life of an employee to the financially free life of an investor. Read some books, attend a seminar, find a coach and a mentor, and start small by applying the lessons you learn. That is the path to financial freedom.
If you are an inexperienced property investor, it is hard to place a value on a coach who helps you to do a good deal that earns you hundreds of thousands of rands, or gives you advice that saves you from an expensive mistake.
Recently I saw an inexperienced investor make a relatively small mistake that cost him over R 50 000 in 8 months.
This is how it went down;
- He purchased a well priced property in a good area – so far so good.
- The townhouse was tenanted at a reasonable rental – so far all good
- He took transfer – so far all good, or was it?
- He asked my company to manage it for him. The first question I asked was, Where is the lease? – Oops!! The investor was so focused on all the other details that he missed this vital one. (He didn’t have a set of keys either!)
- The tenant wouldn’t produce his copy of the lease but insisted that the terms were – “XYZ” which of course favoured him.
- The seller wouldn’t produce the lease. Since transfer had taken place the buyer had little power to force the matter, and it was the only proof that the seller was holding a deposit!
- When the tenant realised that he was calling the shots, all hell broke loose and he stopped paying rental.
- The legal eviction route was severely hampered by the “verbal” lease. Summons had to be served on the elusive tenant in person! as there was no “domicilium” clause which gives the courts permission to serve summons physically on the property.
- By the time the investor managed to evict the bad tenant and replace him, he was down in excess of R 50 000.
Regrettably, the error was entirely preventable. All the investor needed was the right input at the right time. An experienced investor/coach would have known the importance of securing a copy of the lease when he purchased it.
Life is too short to make all the mistakes yourself! It is essential to see the need for a property coach and then to choose one – carefully!
Ideally you would need to find a coach who has the necessary relevant track record in the geographical area you want to invest in and in the relevant property type.
A method that has worked for many is to become an apprentice to an experienced investor, who provides personal mentoring and then shares in the apprentice’s profits. This can work very well but investors willing to provide this level of mentoring are few and far between.
We recommend that you use your investment coach to assist with your first few sale agreements. Resist the urge to bow to the agents pressure and “just do the deal”. Take the completed agreement and run it by your coach.
Coaching versus mentorship
A property investment coach walks with you through the entire process of investing and helps you each step of the way. Coaching is for those who want someone to hold their hand while they invest in property. If this is for you then look no further than Organic Growth Investment Club.
A property investment mentor trains and teaches you to be able to invest at the same level or even higher level as the mentor himself is able to. Mentorship is for those who want to learn exactly how to do all 8 steps of property investment themselves.
The choices of coach traditionally open to you are:
Yourself – the player coach
This “read everything I can about property investment and then take the leap” approach often seems the cheapest method, but we can guarantee you will work out the most expensive in the long run. Property investment is not very forgiving and mistakes can cost one dearly. How do you quantify a mistake that results in bankruptcy and the ruination of your credit worthiness? Bank financing is essential to successful investment and banks have very long memories!
A friend coach
A good friend or relative who is a successful investor himself and is willing to assist you over a number of years and show you the ropes can be a major benefit to you. Investing can be an intense and time consuming business and needs serious commitment from your friend-coach. Profit sharing often makes this a viable solution.
When choosing a coach, ask the following questions to determine if your coach has good subject knowledge of property investment and good local knowledge of the area you select for investment:
Does he know the property basics of rental income returns, real returns and capital growth
Is your coach good at finding attractive deals?
Does he have enough local market knowledge to be able to spot a good deal?
Does he know market related prices and rental for the area?
Does he have a network of local maintenance and service contractors
Does he invest in that area?
Is he passionate about investing in property and teaching his skills to others?
Does he know when to buy and when to sell?
Investment club coaching
Investment clubs spring up from time to time. Do your homework as they are often designed primarily as moneymaking schemes or part of a marketing plan set up by property developers to provide buyers for the properties they bring to market.
If you don’t have a personal coach then an independent investment club like the Organic Growth Investors Club may prove invaluable.
In addition to assisting in the selection and sourcing of good investment properties, Organic Growth Investors club provides the following coaching assistance when you do buy;
Option A – Assisted sale
The club member, sources their own property and may request that Organic Growth assist with their acquisition and the negotiation of a property deal.
OPTION B – Due diligence service
If the investor purchases a property with sufficient suspensive conditions, he can then ask the club to do a due diligence on the property. The property would have been purchased subject to various conditions (e.g. subject to bond approval, viewing, or a due diligence period of a week).
The services included in this due diligence will include:
1) A video of the complex,
2) A video of the property, providing an opinion on the general condition of the
property and highlighting any special features and visible defects.
3) Organic Growth will inspect, assess and give opinion on the relevant documentation
4) They will provide market related estimate of the value of the property
5) They will also provide an estimate of the market related rental for the property.
OPTION C – Full property sourcing and assistance
The club hand select investment properties and make them available to their members combining all the elements of option A and B.
Avoid investor mentoring or coaching at your peril!
We have seen investors make elementary mistakes that cost them many thousands of Rands. These mistakes could very easily have been avoided by the involvement of a property coach.
An experienced property investor knows the answers to many of the questions you don’t even know to ask! He knows your rights as a property owner and the rights of your tenants. Not knowing these elementary elements can unwittingly get the inexperienced landlord into hot water.
He will also see potential problems or advantages that the inexperienced investor does not know even exist!
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