Real estate investment clubs started in the ‘90s and have stuck around for a good reason. Investment clubs are a great way to invest in properties that you couldn’t afford on your own. They’re also terrific learning opportunities and can give you the chance of a lifetime to diversify your portfolio and make more money than you could have before. Here are five reasons to join a local real estate investment club so that you can start investing safely and securely.
While you can join a real estate club and invest independently, you can also form partnerships with other members through real estate syndication. This is a traditional way of being able to afford and invest in properties that you couldn’t on your own. In addition, you don’t have to worry about not getting a high return because when you pool your resources, you can afford bigger properties that turn out a higher return for the whole group.
For example, commercial properties, such as warehouses, offices, and retail businesses, can be hard for one to invest in on their own as their initial cost can be high. There’s also the risk of paying for pricey repairs or business taking a dip as the economy changes. But pooling your resources together in an investment club means there’s a lot less financial risk involved.
You can securely invest in bigger properties and larger businesses without taking the full brunt of any financial issues. For example, a $10,000 roof change becomes less intimidating when it involves 10 people as opposed to one.
Real estate investment clubs are great for beginners who want to network with other professionals. You can make connections with real estate agents, lenders, and brokers to become a more successful investor. In addition, building your own list of relationships can open up opportunities and properties you wouldn’t have known about on your own.
It’s important to network within your own web. For instance, if your primary investment is high-end retail stores, you’ll want to connect with people who can benefit your investment needs. Portfolio diversification is good for financial security, but don’t lose sight of your goal.
Although it may be tempting to cast your net and catch as many fish as you can, you may be missing out on the bigger fish you need to fry. That said, you can almost always find someone with the connections you need, so don’t be afraid to put yourself out there. Real estate investment clubs are perfect for making contacts you never knew you needed.
On the more niche end, many investors are also construction workers, plumbers, and electricians that handle maintenance issues at a lower cost. If you make connections with them and their company, the same can apply to you.
Similar to pooling resources, interacting with professionals can open doors to new partnerships. Whether you lack knowledge or finances, you’re guaranteed to find someone who can help you fill in any missing pieces. For example, if you have the finances to invest in property but aren’t sure where to start, having a partnership can point you in the right direction and help you make better investment decisions.
Also, partnerships mean experience, even if whoever you partner with is a beginner. Different demographics, like age, race, or gender, have unique perspectives and experiences, which means different areas of intelligence and expertise. Working with someone you may not always agree with can be a better partnership than working with someone who has the same thoughts and beliefs as you.
A younger investor might understand the current social and economic trends and can make better decisions as to what commercial properties may be quick-to-die-out trends rather than a company that will last. On the opposite end, an older and more seasoned investor can better pinpoint weaknesses in financial and investment plans or fill out any knowledge gaps that younger investors may not know.
Most real estate investment clubs have guest speakers who visit to advise you and other investors. This can be a big help for those who have the technical knowledge but lack the experience. Investment clubs also provide you with the opportunity to take classes and further your education. Even if you don’t attend classes or sit with guest speakers, you’ll still be around educated and experienced professionals with the same passion as you.
Think of it like this—partnerships can give you street smarts, while formal education can give you the foundation and theories to make it work. While field experience is important, classes will give you knowledge of policies, regulations, and terminology that you can’t get by jumping straight into investments.
These workshops can teach you everything from investing in short-term rentals to the basics of funding, buying foreclosure auction homes, and almost anything in between. Organized courses provide you with more traditional knowledge than any partnership can.
Like any other business, they want to make a return. So while you’ll probably pay a membership fee for these courses, the learning you’ll receive will ultimately make you a better investor and outweigh the price of your membership.
Most real estate investment clubs require you to pay a fee before joining, and for a good reason. Usually, an investment club will offer free courses and classes, but you may also get a hefty discount.
Club leaders know that some, if not most, of their members are residential investors and do their own shopping and maintenance. For example, if you invest in residential properties, investment clubs often offer discounts and coupons from stores like Walmart, Home Depot, Lowes, or Ikea. Over time, these discounts add up and can save you a lot of money on furniture shopping, cleaning, and maintenance supplies.
Ultimately, real estate investment clubs exist to make you a better investor in any way that they can. As of 2017, as many as 4,000 real estate investment clubs exist in the United States. Within these thousands of organizations, they have made spaces specifically designed for women and minorities to help include everyone’s experiences. They make investing accessible to anyone and everyone, as was the original design of REITs and REIAs.
Whether you’re a beginner at investing or a seasoned professional, you’re always looking for suitable investment properties for sale. Networking with a real estate investment club is the best way to do that. You’ll get the chance at a world of opportunities you never knew existed.
Hopefully, these five reasons to join a local real estate investment club have shown you the myriad of benefits you can receive from a membership. There’s no better day than today to start making more money and gaining more knowledge in your field. So reach out to your local real estate investment club today to open your next door of opportunity.