When I started trying to build my Real Estate portfolio, I hated networking. My networking-incompetence was a handicap for my business. It also made me feel like a failure. The pattern went like this: I attended event after event only to anxiously stand in a corner chatting with the three people I already knew.
Can you relate?
Building your network doesn’t have to be like this. Actually, if it is, you’re doing it wrong. Real estate networking is about methodically and purposefully building mutually profitable business relationships. There’s a science to this kind of networking and you can learn it!
Here’s how.
3 Kinds of Capital
Did you know sociologists have identified three types of capital—social, cultural and financial? Cultural and social capital can be leveraged to build financial capital. This is how people change their financial circumstances, by using other types of capital—cultural and social—to create opportunities to make money.
Here’s how this works. Using cultural capital means leveraging what you know. This is why investors seek out Real Estate education when they get started. It’s to increase knowledge or cultural capital so that they can make sound investing decisions The other form of capital that can be leveraged are social connections: who you know. Networking—or increasing the number of people you have business relationships with—will impact your finances positively if you do it right.
Here are five key things you can do to grow your investor-network
Audit Your Peer Group
Our friends influence us. A peer group shapes how we understand the world. But most of us have peers by default.
If you want to raise the limit on your current success, choosing peers that help you level up is one of the levers you can use. The opposite is also true. Certain relationships can drag your life in directions that don’t suit your objectives.
Think of the five people you spend the most time with. How do these relationships make you feel? Depleted? Energized? Are they elevating you or dragging you down?
By being selective of who we spend time with, we create conditions for success, failure or stagnation.
(See Chapter 19 of Mindful Landlord for the complete exercise to help you evaluate your Peer Group).
The “Call a Friend” Lifeline
Have you ever watched the game show Who Wants to Be a Millionaire? My favourite part is when a contestant calls a know-it-all friend. I’m always nervous in case the friend doesn’t answer the call!
When a property-related question pops up and your million bucks is on the line, how can you ensure a competent person will—one—pick up the phone and—two—have the right answer?
Here’s how.
As you meet professionals in your Real Estate activities, sometimes you’ll feel an affinity. Make a conscious effort to build a relationship. Invite them for lunch. Discuss your plans for your investments and their business. Ask how you can help the person grow their business.
If you have a good feeling, nurture the relationship further. Call for a second opinion on something. Test their competence and overall professionalism. As the final step in the vetting process, hire them to do a small job. It’s better to carry out these steps as an ongoing process. Relationships develop best when there’s no immediate pressure. No one likes it when a person they hardly know asks them for favours! It’s also not always wise to rely on the unvetted. You can have bad surprises!
Once you’re confident of a person’s competence, you can begin to refer them to investors and members of your network. If you don’t have any direct referrals, make a point to connect them with someone who does.
Ivan Misner, the “Father of Modern Networking” and founder of Business Network International (BNI), once said, “Givers gain.” When you’re on the lookout to help a professional build their client list, they will always answer the phone when you call!
Networking into Deals
Successful Real Estate players keep the best opportunities—the off-markets or good opportunities—for their preferred network. This is true of agents, construction companies, and other landlords. A great network is a source of great insider deals.
Here’s how to get on the inside track.
Start by identifying the types of professionals or players who have access to the kinds of deals you want. Realtors, bankers, mortgage brokers, notaries, bankruptcy trustees, general constructors, and other investors—all will have preferred access to investment deals. As an active investor, you’ll often get asked for referrals that can benefit these professionals. This makes you a valuable contact, both for fellow investors and for the professional players in your network.
By making yourself valuable to a large number of people, you’ll be top of mind when they come across something that might interest you. Remember Misner’s words: Givers gain. By being helpful to members of your network, they become your property search team.
You must educate your network on what you’re looking for. This way they can look out for potential opportunities that fit your criteria. This is how referral marketing works. You build relationships with key people who have direct access to what you’re seeking. Over time, these people become your sales team. Referral marketing is a key tool for leveraging who you know into investment success.
Idol Dating
If you really want to boost your social and cultural capital, you will need mentors. But how can you find a mentor? A potential mentor is anyone who’s closer to achieving one of your goals than you are. This isn’t hard to find. Who are the leaders in your local industry? Who are your real estate idols? Who’s successful doing something you want to do?
Once you’ve identified a few potential mentors, it’s time to ask them on a date! Social media is great for this. LinkedIn, Facebook, Twitter, and Instagram all have messaging functions. Company websites provide contact details or have a contact form you can use to get in touch with people. Just go ahead and invite your idol to lunch, coffee, or a phone chat. Be sure to mention that you’re paying the bill. People love to talk about themselves! You’ll be surprised who you can get access to by simply saying or writing, “I admire what you’ve done. May I take you for a coffee and ask you how you did it?” If the person isn’t local, no problem! You can always set up a Zoom call.
Voilà! Now you have a mentor
Business Networking Groups
Organized groups can also help you build a professional network. Business Network International (BNI) is the largest and most organized. Smaller organizations such as LeTip and Groupe Reso (GR) exist as well. There are also local and informal groups in each region.
These organizations usually have weekly meetings where you can build your network, share what you’re looking for, and maintain relationships with other professionals. There is usually only one spot per profession (e.g., one real estate agent, one lawyer, one notary, etc.) to avoid competition within the group. As a member, you’ll have regular homework: to bring guests and to meet with members individually to learn about their businesses.
While it can be a bit unconventional for Real Estate investors to join – memberships are usually reserved for small business owners and independent professionals – I have seen investors attend as regular members.
The premise of such groups is that each person works to provide business referrals to the other members. In this way, each professional member grows their network of clients organically with the help of the other members. As an investor, not only do you gain a whole team of potential deal-hunters, but you will also be able to grow a professional network in a structured, self-reinforcing way.
I was a member of two such groups for a number of years, with great results. Membership helped build my business, but the real takeaway wasn’t more contracts. The biggest benefit is that I learned a structured way to build a business network. It was a real aha-moment for me when I realized there was a methodology to successful networking.
Networking for Dummies
Networking was my bête-noir for years! Once I realized that there’s a science to meeting new people and building profitable business relationships, everything changed. Instead of being a popularity contest or a high school dance experience, networking became about finding ways to add value for people I knew. I didn’t have to worry about being the coolest kid at the party anymore! I shifted from trying to impress people to trying to be useful.
This is the principle of effective networking. First, reach out to people in an organized and relevant way, and—second—find ways to add value for those who are in your network. If you can find a way to add value—be it with positive energy, contacts or your own network—people will be trying to network with you!
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