Building a Mastermind Group for Real Estate Investing
From the Genius Types archive. Originally published March 23, 2009.
A little over a year ago, I joined a real estate investing and mentoring group called Lifestyles Unlimited. Even though I had read a tremendous amount of literature on passive income sources including real estate, I finally realized that Andrew Carnegie and Napoleon Hill were right in “Think and Grow Rich”.
A Mastermind Group
In Napoleon Hill’s research on dozens of the world’s wealthiest people over 100 years ago (and most influentially Andrew Carnegie), he found that the concept of a mastermind group was a top priority of the rich. When I first read this, I thought, “Hmm, that sounds good,” and then continued reading without doing anything about it.
Napoleon Hill writes in the 1st chapter that the secrets in the book will only be revealed to you when you are ready to hear them. This was one of those secrets for me. Even though it sounded like a nice concept, I didn’t finally “get it” until the 2nd or 3rd time I read the book. I took action and found an investor group in one of my homes, Texas.
Why Smart People Have Trouble Getting Rich
At one of the 1st meetings, a concept smacked me so hard across my head, it’s still wedged somewhere behind my ear. I struck up a conversation with a man who had been a member for a couple of years and had accumulated a few dozen single family homes; enough to pay all of his bills.
As you know, I love books and theories on creating wealth, so I asked him what he had been reading to get where he was. His answer blew me away and explained to me why smart people have such a hard time creating wealth.
He hadn’t read a single thing.
How could this possibly be? Here I was, a guy who had dedicated his life to reading the literature of the wealthy. I had created some passive income, but not yet enough to retire.
This guy had been at it for about the same time I had and, without reading a thing, had created enough passive income to retire. To be honest, I kind of ticked me off at first until I let it soak in and teach me what I needed to learn.
Stop Reinventing the Wheel
Have you ever noticed how the people who get rich aren’t necessarily the smartest? Think of the people you grew up with. The A students all went on to get 2 and 3 degrees and ended up working some technical job for a C student. The C student had no idea how to do the things the A student did, but he knew well enough not to try and do it on his own.
That’s not to say that no smart people ever get rich; but I would propose that they did so because they learned a lesson from the C students: “Stop reinventing the wheel.”
Smart people are tremendously talented, but often at a cost. Just because you can do many things doesn’t mean you always should. C students realize that they can’t do it all, so they find smart people to do it for them.
I picked up every book in the world on passive income and real estate, trying to invent some ground-breaking new technique on real estate investing; but only had 1 investment property.
This guy realized that he needed help and went and got a mentor. The mentor told him how to do it and he went out and did it! Duh.
Find a Mentor
It makes so much sense now. Simply go out and find someone who has done it and imitate them.
The lesson is that the education is important, but no where near as important as finding a mentor.
Knowing what I know now, it’s hard to believe that I thought I could do it on my own before. My ego must have had something to do with it. I wanted that title “Self-Made Millionaire”; but really there is no such thing.
It turns out that one of the qualities required to build wealth is humility. Who knew? The common perception is that the rich are selfish.
Quantum Leaps
Once I let my ego down and started asking questions of the mentors at Lifestyles, I started making quantum leaps in my understanding of real estate investing. Even though I had read everything out there on investing, I still was still facing little problems that were holding me back.
Why can’t I make the numbers work?
Why can’t I find properties that cashflow?
Why is it taking so long to rent my property?
Why is maintenance and vacancy eating up my cashflow?
By talking to people who were actually doing it successfully in my market, I got simple, “ah-ha!” answers to these questions that I never found in a book.
My Mentors
I hit the mentor jackpot when I joined Lifestyles. The founder is Del Walmsley, a multi-millionaire who retired himself with real estate at the age of 34.
He now owns something like 5 apartment complexes and is closing on 2 or 3 more this year. Del has been mentoring since 1990 and Lifestyles has grown to over 8,000 members.
The 1st office was in Houston, where Del’s students now own over 400 apartment complexes. That’s almost 1/3 of ALL apartment complexes in Houston. Isn’t that amazing?
Del now works about an hour a day on his radio show where he answers questions about real estate, and once a month, he teaches a 2-day seminar detailing his methods for creating wealth in real estate.
Steve Davis was one of Del’s 1st students. He is now a partner in over 3000 units and is the Vice President of Lifestyles Unlimited.
Steve also has a radio show 6 days a week where he talks about creating passive income through real estate and takes calls from listeners. He was actually the reason I found Lifestyles Unlimited.
I was driving around Austin on my vending route and I came across his show on the radio. Once I learned more about him, I found Del’s show and started streaming them on the internet. They now have all their shows available on iTunes (click here).
In addition to Del and Steve, Lifestyles now has dozens of mentors to service all the members.
Expanding
Lifestyles opened up a 2nd office in Dallas in 2006 and just opened a 3rd in San Antonio. One of the great things about this particular investment group is their hands-on approach. Members have unlimited question and answer with mentors who are currently investing in their area.
As I got to know the company more, I started to share what I had created in the realm of passive income and the internet. We found that we had a lot in common and I ended up getting a job!
The Best Job Ever
I often talk down working 9-5, but it’s really hard to call this working. I get to do two things that I love every day: create content for the internet and talk about passive income.
My job is basically a two-parter. First, I re-invented their website and turned it into what I know very well: a blog. LifestylesUnlimited.com
Second, I teach an introductory class on real estate investing in San Antonio twice a week. If you’re in town, please stop by to see me. You can find the schedule here.
The best part about the job is that I get to hang around with a bunch of wealthy real estate investors all day and talk passive income. I’ve got to tell you, this sure beats sitting in my office and reading all day.
