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I've just been asked on Facebook how to do due diligence on a prospective property mentor, so I thought I would copy my response here for the PT community and hope that you will add any further thoughts on this topic:I believe a successful person should have a number of key indicators to evidence that success. I have listed them below:They will have an strong on-line personal brand and be talked about and seen with other influential and credible people.They will be asked to speak at credible industry events, not "networking" events where there is a sales agenda or their own events where they have paid for high-profile people to do a keynote speech.They will have a track record of business success evidenced via Companies House and DueDil.They will be able to evidence property success, not success at running a mentoring company. They could do that by providing ten addresses of properties owned by themselves that can be cross-referenced on the Land Registry.They will be able to provide other satisfied clients to talk to.They should have been in the property business for a minimum of 10 years, to show that they have weathered various parts of the property cycle. There will be a trail of evidence of business activity for a sustained period, not popping up on FB as an instant guru. I would be particularly wary of people who only post on FB and who have no other social presence. (FB is not searchable by google, therefore it is not good for their personal brand to only operate in a "walled garden". )It is likely that they will be contacted by the media for commentary around their area of expertise, and therefore quoted in the press or asked to write a column in a magazine.They will contribute thought leadership content across the social web, not just marketing posts on Facebook.They will be able to demonstrate their knowledge by contributing to property forum discussions and being able to give detailed input which is born out of experience.When asked for evidence of their success, they will welcome the opportunity to provide it. It could be a redacted bank statement highlighting the income from their Rent to Rent properties, for instance. Or a copy of their Credit Report.When their offering is scrutinised on-line, they will welcome the chance to bring clarity to their proposition and also welcome the opportunity to be transparent about their claims and evidence them.They will be very well connected with other high net worth individuals and be part of HNW networks.They will be happy to provide you with a copy of their personal credit report.If people become hostile, arrogant, or dissmissive when asked to back up their claims of success, then that is a sure sign that they have something to hide.I am sure there are more things to add, but those are the ones I can think of off the top of my head. Related content:Advice in finding a property mentorTribes guide to avoid becoming property "shark bait". "Scam Awareness Month" starts today - How to protect yourself from property fraud 8 signs you are about to become a victim of a property investment scam.
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
That rules most of the prominent names out then, each time I see new names pop up I put their name into some credit checking software we have. It doesn't show assets held in personal names, however it would be very unusual for genuinely successful business people to hold all of their wealth privately and not some of it in one or more Ltd Co's.
Of all of the individuals I have checked, only 1 has recorded a decent level of assets and almost as important a good credit score. It always makes me think that's why they run the courses, because they aren't able to borrow themselves and do their own deals. Running courses gives then access to new investors who are really keen and they can then allow their 'best mentees' a truly valuable experience of being allowed to JV with them. If these folks are genuinely doing deals I don't know how they find the time to mentor.
Stewardson Developments Ltd.
Burson Land Ltd. & Jennings & Gilchreaste Ltd.
Follow me on twitter - @philstewardson
Thanks for your thoughts Phil.Yes, the constant wanting to borrow money off mentees does cause me concern. As we have stated many times, someone with a strong track record of success would be able to borrow money from banks at a much-reduced rate, thereby retaining more of the profit.Lisa Orme recently warned about "stranger" JVs and gave some very helpful tips on how to do DD on them.As more and more landlords incorporate to avoid Section 24, especially higher rate tax payers, there will be more company information to do DD on wealth educators who claim substantial property wealth, as I would expect them to incorporate.
I think, if a mentor is any good they'll have a good repuptation, simple as that, they'll come via a reccommendation, rather than an advert.
Annyone can make a high profile for themselves, be part of networks, get their dozens of friends to write reviews about them and have fancy websites, but it's sometimes, self made hot air. Look on twitter - it's a male dominated largely boasting platform where over 80% of all content comes from 10% of users. You get rewarded with more followers with quantity of tweets, rather than quality.
There isn't such a thing as a credable industry event as with all these events everybody is there to sell something, and nothing wrong with that, as long as you know this before attending.
The easiest is to ask them to speak to their previous clients, and ask them to put on paper and detail the net yield of any project. I often see mentors, sometimes at auctions, bidding over market, and sometimes because they are spending other peoples' money, many are trying to do their best for their clients, but some are just gettinmg any deal they can to get paid. When you see the auctioneer smiling and congradulating the buyer, you know they've just paid way over what they auctioneer thought it was worth, and unhappy auctionner makes for a good deal.
I have noticed mentors buying HMO's and ending up with not much higher yield, than a single let, yet a HMO will be way higher turnover so they would be better off with a single let.
Property has more sharks, than all the oceans put together!!!
Welcome to the property World!!
I am just adding an additional pointer.A limited company must display their company number, and if they are VAT registered, their VAT number, along with their address on their website. This is a legal requirement as per the Companies Act.If someone claims to have a limited company and they are not doing this, then they are not compliant OR they do not actually have a limited company.It would important to find out which it is imho.
I have been to seminars with mentors
and I have came away shaking my head It all sounds so good on the surface
The get rich quick thing really turns me off the flash presentation the Glossy Books The Flash Hotel ect ect
They do our sector great harm as they become the public face of the PRS
which is very unfair
PRS is hard work its not an armchair investment its just like any other business you need to work at it
and I am going to say something which I may get flack for If you need someone to source a property and run it for you ? your Not a Landlord
BTL is a simple investment and is as old as mankind itself
You buy and asset and rent it nothing difficult in reality
My advice to anyone who wants to go in business is do it yourself and don't get involved with the Mentor Game
It reminds me of the gold rush in USA the Men who made the most money were the ones who sold the picks & shovels
A Good managing agent will give you free the knowledge you need stay away from Mentors they will rob you blind in general
and I always ask the question If you are so good at what you do why are you a mentor in the first place
Learn Change and Adapt ?????
All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.
This video is right on point!
DUE DILIGENCE FLOW FOR ASSESSING PROPERTY MENTORS
1/ Is the person selling paid Property mentoring?
2/ If yes, don't give them any money, EVER.
Property Investors with JohnA :-)