If you're a real estate investor, real estate agent, or real estate professional, it may be worthwhile to join a real estate investment club to help further your business or investing career. These clubs can be a great place to learn and network with other real estate entrepreneurs, and for many, they have been a key factor in growing their business. However, not all investment groups are considered equal.
If you're considering joining a real estate investment club, this article will put forth the pros and cons as well as provide a few key elements to look for in a worthwhile club. This will help you determine whether joining would be right for your business.
The purpose of a real estate investing club
The purpose of a real estate investing club is to bring investors, real estate industry experts, and real estate professionals together to network, learn, and do business. Many real estate clubs focus solely on networking, bringing like-minded people together in an effort to do business, but some add a component of education to their investment group, offering a seminar, class, or meeting on various investing topics and strategies.
A real estate investment group may have a wide variety of industry professionals, including:
There is no minimum to the number of members required to start an investment club, and groups can range from private partnerships to nationally accredited real estate investment associations called REIAs. The group can designate the type of investing they will focus on, which could include commercial real estate, crowdfunded real estate, rental properties, single-family homes, passive income in real estate, or a more broad focus of real estate investing in general. Some groups will be free to join while others will charge an annual membership fee, which is typically a few hundred dollars or less.
Pros and Cons of joining a real estate investing club
I personally joined my local real estate investors association (REIA) immediately once I made the decision I wanted to start investing in real estate, and it was by far the best choice I ever made.
Fortunately, my local investment group was a national REIA and was in the top designations for REIAs nationwide. They offered outstanding educational and networking opportunities and had several hundred members at a given time, which grew my network tremendously. I met my accountant, attorney, Realtor, self-directed IRA custodian, and many of my private lenders through this investment group. Over the past decade, this has allowed me to purchase millions of dollars worth of real estate, all while learning new investing strategies.
Unfortunately, not every real estate investment club is considered equal. Many real estate groups are for-profit, and for this reason, many of the speakers or educators featured at their meetings don't provide valuable education opportunities and require you to purchase an expensive course in order to truly learn the investing strategy or technique. There can also be a lot of "tire kickers" or members who attend the meeting but never invest in any property.
Additionally, some real estate investment clubs will focus on real estate crowdfunding, bringing people together for the sole purpose of pooling their money to buy a property. While these types of clubs can still be beneficial to join, it's extremely important to do your due diligence on the investment and the group leader, or the person in charge of the investment and funds.
I personally know several people who joined a real estate club like this, invested in property, and later discovered it was a fraudulent investment. They lost tens of thousands and sometimes even hundreds of thousands of dollars by investing with someone they believed ran a reputable investment group and was an experienced investor they could trust.