Successful property investors always have a plan and follow it. But how do you develop the plan in the first place? If you are new to property investing then you will likely need to employ the services of an expert – a property investment strategist or mentor.
This is where it can be a little overwhelming, because how do you know if this is just a sales person pushing their inventory or someone who really is there for you?
A genuine property investment mentor should be unbiased. They will not be pushing anything in particular. They will give you honest feedback, and develop a strategy that is aligned with your financial goals, your risk profile and also aligned with your current bank balance.
Here are a few questions that will help you determine who is the real deal, and who is really just trying to sell you something.
- How many investment properties do you own?
You want them to walk the walk. Find out when and how they started, what they like to invest in, how many properties do they own, what mistakes they made etc. Finding out this information should provide you confidence and encouragement about their abilities.
- Have they invested in the property/ areas that they are suggesting you invest in?
If they have skin-in-the-game, then it will make you feel more confident. On the other hand, if they are not investing in the apartments they are suggesting, then it may be a red flag since they are not taking their own advice. Find out why they haven’t invested.
- What is their current Investment strategy? Has it changed over time? What growth have they achieved?
The mentor should be confident enough to share their strategy with you. They should also be happy to tell you what their cash flow/capital growth is, of course, they probably won’t show you the paperwork to prove it, but you should be able to determine if they are telling the truth. The key here is to find out how they structured and financed the investments, and the techniques they used for maximising their equity and cashflow.
- Who do they have on their personal investing team?
If they trust certain professional people (property managers, lawyers etc) you will want to use the same, or someone they recommend. Be wary if they are pushing a certain accountant, lawyer, property manager etc. If the mentor will only provide you a strategy based on you using the ‘in-house team’ you may want to think twice. Or ask more questions why.
- Speak to long-term clients.
Ask to speak with actual long-term clients and not just read testimonials. You want to find out if the mentor is getting results for others. Ask to speak to clients who started out in a similar situation to you, this will provide more information and confidence. You will also find out your mentor’s weaknesses (everyone has them).
So do these questions help? Do you think by asking these questions you would feel more confident in selecting the right mentor?