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This concept is why this article is called the u201cGold Prospectoru201d Method. Sam is brand-new to gold prospecting, with no success or money to speak of. He learns how to go up into the hills and look for gold. Then letu2019s say that Sam finds two blobs that look like they may be gold. He rides into town, and goes into one of the several offices where you bring your gold to be u201cassayedu201d or evaluated closely.
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The “Gold Prospector” Method for Apartment Investments by David Lindahl This concept is why this article is called the “Gold Prospector” Method. Sam is brand-new to gold prospecting, with no success or money to speak of. He learns how to go up into the hills and look for gold. Then let’s say that Sam finds two blobs that look like they may be gold. He rides into town, and goes into one of the several offices where you bring your gold to be “assayed” or evaluated closely. The assayer examines the first blob closely with his magnifying glass, and says: “I’ll give you nothing for this. It’s iron pyrite, also known as ‘fool’s gold’.” Then he looks at the second blob, perhaps expecting that it will be the same. But wait — this one is different. He closely inspects the blob, and asks if he can heat it up in order to determine the exact chemical composition. Sam agrees. The assayer comes back and says: “I’ll give you $5,000 for this. It’s one of the best specimens I’ve seen of gold all this year.” Let’s think about that assayer, who has a business of his own to run. What do you think are the chances that if Sam brought only the pyrite rock, that he’d say: “I like you, Sam. You’re an experienced investor. You brought me some fool’s gold, but hey, you’re a good guy. So here’s $1,000.” By the same token, if you brought the assayer the real gold, what do you think are the chances that the assayer would say: “Sam, you have some real gold here. In fact, it’s about $5,000 worth of gold that you found with your beginner’s luck. But I’m sorry. Didn’t you read the sign on the door? We only accept gold from experienced prospectors, not beginner’s gold.” Maybe Sam got lucky in finding that gold as a beginner. But do you notice how Samtook actionto look for gold? Where would he be if instead, he sat in his cabin, doing nothing and thinking:I won’t look for gold. After all, no one will want to evaluate any gold I find because I’m just a beginner. Your Choices as an Apartment Investor What I try to do is get people to realize that real estate investing is no different. If you’re Sam, here are your choices:
1.You can sit in your cabin, think it’s all hopeless, and do nothing. 2.You can decide to go out and look for gold, but with zero training. You might find it — that’s how the first big nuggets were found, after all. But that really is doing it the hard way, with no idea what you’re doing. You’ll need to spend a while and make all the mistakes yourself before you smarten up and look for gold in the likely places. 3.You can befriend a49erwho’s been prospecting in the hills for many years and who can tell you how to do it, plus what NOT to bother with. You may ask, “Why would an actual successful 49er tell me how to prospect? Isn’t that against his own self interest?” It’s reasonable that the 49er might not show you the exact spot where he’s currently panning for gold, but that’s OK. It’s a big country! It’s a big state. If you set off on your own, will your luck in finding gold in any way diminish his luck? Of course not. The exact same thing is true with real estate investing. Even if every single person in my company, RE Mentor, were to stop working at the company and hit the hills, prospecting for real estate deals, will that exhaust the supply? What if every one of them didone deal a day: would that exhaust the supply in the United States of good deals? It wouldn’t make a dent. There’s untold trillions of dollars of real estate out there. This is why rich people will lend to you, as a rank beginner. They know a good deal when they see one. They will focus on the quality of the deal you bring them. If it’s good enough, then they’ll work with you. If it’s not, then they’ll ask you to go out into the hills and try again. But it is indeed a big country. Why stumble about, looking to find good deals and making all the mistakes yourself, if you can learn to sift and sort, until you have what might be a gold nugget of a deal? That’s the whole idea of learning how to source good deals. It’s part marketing — getting the word out and building a network — and part analysis of what your network brings you. That’s what we do every day with students around the country: help them to prospect for deals.
