Networking- A Skill That Every Investor Needs

Real estate investment is a people business—everyone knows that. But, more importantly, it's a networking business.

By that I mean you have to build a network of individuals who can help you build a secure investment future. By the same token, you must be prepared to help members of your network in turn, so they can build their own investment futures and businesses.

In plain words, it's absolutely necessary to build mutually beneficial relationships with the people around you in order to succeed in the investment business.

The purpose of this article is to show you the three levels of real estate networking and how to build and maintain relationships within those levels.

Level 1: The Strategists To build an investment career, you should gather a group of people immediately around you that make up your "inner circle." These are people whom you trust completely to offer you sound advice on investments and other aspects of your life. Members of Level 1 depend upon your type of investment, but can include:

Mentors Partners Fellow entrepreneurs Real Estate Agents Contractors, etc.

These are people who think strategically; i.e., they're always looking ahead to future opportunities while keeping an eye on the present. If you like to think in military terms, these are the generals of your investment army.

They're also people willing to help you develop personally as well as in a business sense. Of course, you should do the same for them. They'll give you advice and support when you need it and will expect the same from you. Look to these individuals to guide you toward the right people and the right projects. In effect, you want them to open doors for you into good investments, and you, in turn, will open doors for them.

Level 2: The Financial People The next level is the one with all your financial people; e.g., accountants, bankers, brokers, lenders, tax attorneys, other private investors, etc. Think of this level as being more tactical than strategic.

By that, I mean they're involved in every transaction and give you specific advice on terms of contracts, details of construction/remodeling, and the like. Again, thinking in military terms, these are your mid-level officers (colonels, majors, captains, etc.) who execute your orders.

Level 3: Service People The individuals in this level are the specialists in your network; i.e., they perform very specific functions for particular properties. They include independent contractors like painters, electricians, inspectors, appraisers, etc.

They're the infantry soldiers of your investment army. They're on the front lines getting the actual physical work done. Remember, no investment deal is ever won without "grunts." So, you want the best and most cost-effective service people you can find. Treat them well and fairly and work to develop long-term relationships with them. Such relationships will pay off in greater profits and fewer problems. Recommendations for Maintenance of the Three Levels Keep in regular touch with members of all three levels to keep communications open. Don't limit communications to just business matters. Show that you care about them as individuals by asking about their families, latest successes, golf scores, etc. even when they're not involved in one of your deals.

In short, build relationships on a personal as well as a business level and then maintain those relationships through regular contact. Share your expertise and knowledge. This can be something as simple as sending them an article on their area of business. Or, you can recommend people or projects you think will fit their particular business interests, etc.

Treat everyone well and honestly. It's imperative to build trust on all three levels. Never, ever treat anyone in the three levels poorly. Believe me, if you mistreat someone, word will get around faster than the speed of light, and your business will suffer.

I can't stress enough the importance of building a network. It's the absolute key to a great investment career! Without contacts and great relationships, your future in real estate deals will not be successful or less successful than you'd like it to be. So, work hard to gather the three levels of people about you. And, always, always, give back to the individuals who help you succeed. It's not only the right thing to do; it's the smartest business decision you'll ever make.

Key Point: You'll go nowhere in the real estate business without building a network, so make it a priority to grow the best one possible.