REIA’s in Maryland.
At last count, there are now at least 163.5 real estate investment associations (REIA’s) in Maryland. Ok, maybe I missed one or two, but I’m pretty sure of my count. How many of you are actual members of a REIA? Let me break down for you what I think about REIA’s and then put out a call.
Maryland, for whatever reason, seems to be a hotbed for Real Estate Investment Clubs. Perhaps its the ever-hot market, perhaps we just have a lot of budding entrepreneurs – or maybe, we just have a lot of guys who are tired of doing deals, and they want to teach. Whatever the case, I know of at least TWELVE REIA’s in our little-tiny state.
Here’s the list I came up with, but I’m sure its not exhaustive:
Baltimore REIA
DCREIA.COM
Mid Atlantic Real Estate Investors Assoc
Capital Area REIA
Washington DC Metro REIA
Washington REIA Network
District REIA
Beltway Breakfast Club no website only an email address
Maryland Real Estate Exchange Network
Young Investors Club of Crofton no website only an email address
DMV REIA
Hub City REIA
The Real Deal
Are you kidding me? Do you get it? If so, shout it out!
Let me explain. In the past, REIA’s for the most part started out rather innocently. A small group, or even a single guy would get an idea to share his idea’s, tips, failures and successes with other like minded folks. Doing so would enable each to hold-up each other and therefore all would be more successful more quickly. Get it?
That was then. Let’s fast forward to a year or so ago, and allow me (the grizzled veteran) to pull back the curtain for ya. I hope this doesn’t shatter your view of humanity.
REIA’s, my little newbie pals, are nothing more than incubators for dollars. By in large they are now set-up to bring in newbies who hopefully have fat wallets. Think about it. Do you honestly think every organization above is run by charitable people who are all simply giving of their time and money just for the betterment of others? C’mon!!!!
The Guru comes to town, making his pitch.
Most REIA meetings start with a open forum where attendees can pitch a deal, or business. Then a the featured speaker gets up, fires up the crowd about a particular investment topic, tells you just enough to get you all foamy about making an easy bazillion, then says, “I just don’t have enough time tonight to go into all the details, but my whole system of books and tapes is for sale right now in the back of the room,” and, “I’ll be here on Saturday doing a morning workshop where I’ll speak in depth about how to make that bazillion.” That meeting will cost…..dollars.
And before the guy steps down from the podium, the newbs are already reaching for their wallets.
The speaker makes a killing…..but wait…..he only makes 1/2 a killing. Guess who makes the other 1/2? You guessed it. The REIA!
Now don’t get me wrong, I’m all about the free-flow of good info. And I even think that you should pay a price for knowledge.
Problem is, most info Guru’s have figured out how to make far more selling their stuff online rather than doing a dog-and-pony show at every REIA all over the fruited plain. That has left the REIA’s in search of new ideas to make profits.
The new profit center for REIA’s: Education and Mentoring.
Today, REIA leaders see themselves in a different, yet much more lucrative light. They see themselves as that of a teacher or mentor. Now, ANYONE with any level of success (or failure) can start a REIA. If I wanted to, I bet I could have 50 attendees at my first REIA meeting.
REIA’s are now in the business of mentoring and deal partnering. Most make no bones about it. They say, “Go find the deal, put up the money, and we’ll help you….for 50% of the profit.”
That’s not so horrible, actually. But you have to ask – who am I getting into bed with? Does this person have an extensive track record of success in THIS market as well as in previous markets? Can they illustrate real proof? Can they show me a track record? And, most importantly, are they in this for my success as well as theirs, or are they in it for a fast buck?
I dare any REIA leader reading this post to tell me I am wrong. Do your research. Look into the each of the Maryland REIA above. I guarantee that most if not all offer mentoring services.
Here’s my call to you.
If you have a deal, and you need to wholesale it quick – I urge you to contact me. I’ll make you a sweet wholesale fee, and I won’t jerk you around. On the partnering front: I get so many requests to partner on deals and to mentor others. Let me just say - if you want to partner on a deal, shoot me all the details. Under the right circumstances, I’ll think about it.
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Wow, you will be hitting a raw nerve here with the local REIAs. They will probably make up a Wanted poster with your face on it so if you go to a REIA meeting they will kick you out. I couldn't agree more with your comments. There was a time that I remember when the meetings were held in a firehouse that the Baltimore club used and admission was free. There were good local speakers and an occassional guru type speaker but it was not centered around pushing useless products. I don't even attend the meetings anymore since it is a nonstop sellathon.
And then I get to tell them at tax time that none of that new found education which has resulted in no deals is tax deductible. Lot's of double negative in here I know…that's to drive home the point.
It's March 24…what can I say I'm a little punchy.
Hey Guest – Thanks for taking the time to comment. I REALLY appreciate it. Your comments are both truthful and on-the-mark. REIA's have essentially become a one man show, or parnership set up as a front to teach newbies. I'm all for teaching, but let's not pretend we're in the business of just promoting real estate investing.
Craig makes a lot of sense. There is a wholesaler that one of the local REIA's here in Baltimore always keep promoting as the authority on wholesaling. I went to his office one day because I was in the area just to ask him a few questions. He tried to sell me his “mentor ship” program. All I came to ask him was 3 simple questions. He wanted to charge me $3,500. Frankly, I'm turned off from the REIA's. The last meeting I asked the president of the local REIA about private lending, he told me that he and another officer in the club are “starting a mentor ship program on private lenders. The days of the REIA's being around to help one another is over. Sometimes I wonder are these people still active in Real Estate.
$3,500 is cheap, I've seen these mentor programs for $20K and up. Better jump at that deal, haha. Better be careful here, I think Craig has a mentor program but he's a good guy.
Craig,
As an investor and rehabber in Maryland I've watched the past year as REO acquisition prices in some areas have shifted upward…..sometimes by 20% or more. One of the reasons is that the REIAs have unleashed a horde of wholesalers who have begun bidding wars in popular neighborhoods, pushing prices higher and higher. Unfortunately, too many of these newbies have zero idea what they're doing….they run out with a MAO formula they got at a weekend seminar and the next thing you know they're underbidding repairs trying to make $20k wholesale profits…bangs his head on the desk. Alternatively, the community has also grown a number of serious, well-informed neighborhood expert wholesalers — and we appreciate them: straight up, know the numbers and don't gouge on profit ($5k – $10k). I can deal with them all day long. I caused a bit of a stir at my last REIA meeting when I told a bunch of wholesalers that if the REO bidding wars continue, us investors will simply skip the wholesalers and make our offers direct to the bank. Sure, it'll take a bit of our time, but not that much.
Keep up the good work, Craig,
Ron
As detrimental as the wholesalers are, the fools that are buying their deals are more detrimental to the business. If the experienced rehabber doesn't buy the deal then the wholesaler can't perform on his contract with the bank REO and he quickly loses all credibility with the REO agents. Everyone wants to make big bucks and do no work. They have no clue.
Valid on both counts!
I understand what you are saying Ron. There are good people and bad in every aspect of the Real Estate Investing profession. There are good ethical minded wholesalers,and there are snakes. There are good landlords and there are slumlords who could care less about taking pride in their properties. There are also good rehabbers like Craig, who takes pride in turning a property into a show case top notch property, and then there are those who will do a half ass job just to put the property back on the market to get paid and hope the new homeowner doesn't find out until way down the road how bad the property was “fixed up”. As a wholesaler, I take pride in what I do. A wholesaler by nature is suppose to buy low and sell low. There are people who gives wholesalers bad names. That is probably why some landlords and rehabbers do repeat business with wholesalers they trust and are ethical. All I can say is don't throw the babies out with the bath water.
Concur wholeheartedly goteki45…..all fair comments. No babies or baths were harmed during the making of this blog entry! And I'd welcome the opportunity to meet more of those kind of wholesalers serving the Prince George's County Maryland and surrounding areas. If anyone has recommendations, please feel free to provide. Best Ron
Ron
Sorry for the delayed response, my MacBook suffered $1240.00 in damage at the hands of an angry baggage handler somewhere between Detroit and BWI. F'ers! Busted my screen to shreds!
I'm not sure I've noticed the same upward swing in REO prices. I'm buying REO's pretty much at will at this point. I will agree that newbies tend to pay more than they should for deals. A year or so ago, it seemed all bank owned deals were in fact duds, but there didn't seem to be any lack of dorks who would pay WAY more than I would pay.
Now – it seems the banks have lowered there expectations, but the supply also seems to be tightening.
Whatever the case, there will always be investors in ANY market who are willing to make less.
A few local REIA's have recently ramped up their marketing. One in particular just had a grand opening. If you looked closely, they were all selling something.
Regarding the local wholesaler with the mentoring course. That's a shame indeed. I get guys who ask me questions every day. Can't say I always answer, but I try to do my best.
Guest – when posting as a guest, please tell us your name. I have a sneaking suspicion I already know, but c'mon – don't be so shrowded in secrecy.
$3500.00 is VERY cheap if you get at least $3500.00 in return. $100,000 would be cheap if you got $100,000 in return. That said, not all mentorship programs are created equal – so buyer beware.
Now as for ANYONE being care about my “mentorship” program. At one time I did have 12 students. The majority who chose to follow my direction and coaching made a considerable amount of money successfully rehabbing projects.
I am not mentoring at this point however. So, nothing to “beware of.” If and when I do get back into mentoring, you should beware of the fact that you will learn a lot, and you make a crap-pile of money if you follow my directions.