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Today is another AMA episode, Ask Me Anything
\\nJoseph asks.
\\nA friend of mine has contacted a person who is both a coach and a source of turn-key properties. My friend likes the idea of a one-stop-shop to get their start in real estate education and investing.
\\nThe arrangement involves paying a coaching fee and then partnering 50/50 with the coach / trainer on each turnkey property.
\\nI did what searching I could do (some of this on bigger pockets and just random google searching); the reviews seem to be all over the place. The BBB doesn\\u2019t list him as a bad business person. I\\u2019m concerned for my friend though who worked hard to save up the cash to do this.
\\nWhat do you think of this arrangement?
\\nJoseph, this is a great question.
\\nFirst of all, the coaching fee you quoted seemed fairly low. It\\u2019s certainly a lot less than I charge, but then I don\\u2019t work with rookie investors.
\\nIt sounds like your friends are trying to accomplish a few things at once.
\\nThere is a lot of confusion in people\\u2019s minds about what an investment really is versus an active business. The confusion arises because \\u201cReal estate can be a good investment.\\u201d The fact is, a rental property, whether it is turnkey or not is an active business. Sometimes an operator aims to make it appear like a passive investment by calling it a turnkey property.
\\nWorking with an experienced professional property manager who is acting in the best interests of the property owner is the key.
\\nHere\\u2019s the problem that I see with the proposed structure.
\\nIn order to be successful in your real estate investing business you need three things. These are the same three things you need to be successful with anything in life.
\\nSimply hiring a coach may not give you all three of these things
\\nI\\u2019m a believer in hiring a coach. I have a handful of clients who having approached me have hired me as a coach. I don\\u2019t advertise that service at all. The coaching fee that your friend was quoted is very reasonable. But it\\u2019s hard for me to assess what they\\u2019re getting for that price. To recap, I don't like structures that have an inherent conflict of interest.
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