In most trades, it is hard to avoid training someone who will eventually become your competition. If you are in the Real Estate Investing business, this problem can be detrimental if you are not careful.
There are several pitfalls in training someone who wants to go into the business someday.
Wasted time – the time you spent training them goes to utter waste if they leave you to go do deals on their own. Whether they become a competitor or not is secondary to the effort you have to put in to train a replacement.
Loss in revenue – Either while working for you or after leaving you, they can steal prospects and deals. In addition to this, they will also have knowledge of trade secrets or even techniques that you developed over many years.
Higher salary – Because they do a lot of the grunt work, they will view you as someone who takes a backseat and rakes in the profits.
Due to this they will demand a higher salary. If refused they could go slow on their work or become difficult to work with. In this situation replacing them is again a time consuming task.
There are some easy ways to avoid these problems.
– During the interview probe them and find out if they have any interest in investing.
– Avoid the enterprising person and ambitious types
– Hire the ones who do not need the money. Mothers who have time on their hands when their children are at school or have kids who have left for college are good candidates for the job.
– A non-compete clause is the “final nail on the coffin” so to speak. Including this in the agreement deters potential competitors from engaging in any activities that are detrimental to you.
– If you are the type of person who enjoys mentoring, then go ahead and train people. However, if that were not your intention when you hired an assistant, then you would do well to follow the guidelines in this article.