How to Avoid Training Your Competition
by Alan Brymer
|One of the questions I am asked frequently is, “If I get an assistant, how do I avoid training my competition, but also get someone with the initiative to make things happen on their own?”
This question assumes that the only people with initiative are those who are interested in investing in real estate. This is simply untrue. Donâ€™t you know plenty of people who are interested in real estate, but donâ€™t take the initiative to do anything about it? Likewise, there are plenty of people with initiative who would be willing to work as your personal assistant, but are not necessary interested in investing themselves.
How many secretaries and office managers do you know that work for accounting firms and actually wish they were crunching numbers and preparing tax returns? How many receptionists in law firms want to be the ones preparing legal briefs at 1:00 in the morning or cross-examining a defendant in a heated courtroom? Probably not too many.
Assistants apply for their jobs because they like working as an assistant, not because they are fascinated with the type of product or service their employer provides.
Real estate investing is no different. It is not necessary to hire someone who is interested in doing deals of their own someday, and I donâ€™t recommend it. It is likely that with such a person, any of the following things will happen:
They will leave you in order to go try to do deals on their own. They may be completely unsuccessful and never become a major competitor, but it will still waste your time replacing them with someone new.
They might steal your prospects, deals, and secrets. They might start their own investing business while working for you and steal your seller leads, potential buyers, private lenders, and top-secret marketing methods. This could cost you tens of thousands in lost deals.
They might ask you to pay them more than you need to. They feel like theyâ€™re doing as much work as you, so they should be entitled to a piece of the action. Little do they know that anyone can spend their time working on a deal. But you are the one putting your name and money on the line and obligating yourself to perform every time you do a deal. If this doesnâ€™t mean anything to them, ask them if theyâ€™d like to share the risk as well and owe tens of thousands on a deal that goes bad. The chances are they wonâ€™t, and if thatâ€™s the case, why should they get a piece of the profits when things do go well?
They might get jealous and difficult to work with. In this case, you can either continue to deal with their bad attitude and let them hold you hostage, or you will let them go and spend your precious time hiring and training someone else. Either case is a waste of your time and should be avoided.
Because of these reasons, I donâ€™t believe itâ€™s worth the risk in the first place to hire someone who wants to learn how to be an investor. If they want to learn how, let them find some deals and wholesale them to you. Anything else they do is not worth paying more than an hourly rate.
So how do you find someone with initiative who will also stay with you for a long time? Here is a short list of a few simple things you can do to find someone who wonâ€™t go out on their own.
Ask them in the interview if they have any interest in investing. Very few people are going to flat-out lie and say they have no interest if they do. In fact, they will probably be sure to tell you that they want to be an investor because they think it will make you want to work with them even more.
I should add, though, that many applicants will say they wouldn’t mind buying an investment property someday. This is understandable. What you want to avoid are the excited, go-getter seminar graduates who want to go out and make a lot of money today (this is your competition in training). You can usually tell who these folks are â€” just let them talk and they will reveal their ambitions.
Look for people who don’t need the money you’ll be paying them. These assistants donâ€™t really want to learn how to be an investor; they just want something to do. For example, someone whose children are all in school during the day or have all moved out of the house may have some extra time on their hands and want to spend it doing something fulfilling and make a little extra money at the same time.
Use a non-compete clause. I had an attorney draw up an employment agreement that includes a non-compete clause with stiff penalties if your assistant decides to become an investor themselves or even work for another investor. That’s something else I would do to weed out future competitors from the beginning and keep them from getting any wild ideas once they’ve started working for you â€” unless, of course, you donâ€™t mind. In that case, go ahead and let them, but at least you will be in control.
Make sure to gripe on occasion about what a pain tenants/cash flow/rehabs can be. You know that investing is never as easy as it appears to be, and that there are some really annoying things that come up. You donâ€™t have to lie, but make sure that you vocalize your grievances to your assistant from time to time as a deterrent.
Having said all this, I believe in a world of abundance and not scarcity. You may wonder why this topic is such a big deal. Hereâ€™s why. The abundance theory is something to console yourself with when you lose a deal. Itâ€™s not a good enough reason to spend your hard-earned time, talents, energy, and money teaching someone everything you know for free so that they can desert you once they have gotten everything from you that they want â€” unless that is your plan all along.
I have mentored plenty of investors, and it is very rewarding. But the key is to be in control and do it intentionally with both of you aware of and consenting to the arrangement. If you donâ€™t desire to be used and discarded by other people, it makes sense to learn how to be in control, and has been the purpose of this article.