Every so often, those “get rich quick” real estate seminars come to town. Generally, it’s led by one or two “famous guys” (or gals) who might have a cable TV show. The advertisements purport to teach you how to cash in on “guaranteed” investment methods.
The ads start playing, and the calls start coming in to the Better Business Bureau. It’s true, investing in real estate can be a lucrative endeavor, but like anything, there isn’t a shortcut to riches. These classes aren’t necessarily scams, but oftentimes the only ones getting rich off the seminars are the presenters.
A BBB colleague attended one of these events. He described the ordeal: “Once the seminar itself started, it was … fuzzy math reviewed incredibly quickly, revealing the potential for ‘tens of thousands in profits every time you make a deal,’ along with vague definitions of common house flipping methods like wholesaling and rehabbing. But mostly, the seminar amounted to a pep talk designed to make the ‘students’ feel like they were made to invest in real estate.”
The initial seminar is typically inexpensive. But once you’re in that seat? Then come the aggressive sale tactics pushing you to sign up for another, multiday seminar, books, CDs, DVDs, etc. The cost will be in the hundreds of dollars, but there will likely be a “discount” if you sign up now.
These seminars caught the attention of the Idaho Real Estate Commission. Executive Director Jeanne Jackson-Heim says: “The marketing of real estate investment seminars and associated training materials is not necessarily illegal. However, certain ideas and approaches taught in the courses may pose potential problems for unwary consumers. Many of these classes teach people to perform illegal acts, including engaging in activities that require a real estate or mortgage license.”
Jackson-Heim says to stay away from the following illegal activities:
▪ Skimming equity from short-sale transactions.
▪ Preparing false documentation to support creditworthiness.
▪ Making misrepresentations or false statements to lenders.
▪ Pass-through escrows.
The verdict? Ultimately, any kind of real estate investment seminar will only get you so far. It’s entirely possible you might learn a thing or two from these so-called “gurus” about investing. But paying hundreds, perhaps thousands of dollars for coaching? It’s probably not going to get you too far.
Dale Dixon is chief innovation officer for Better Business Bureau Northwest. 342-4649, firstname.lastname@example.org. This column appears in the April 20-May 17, 2016, edition of the Idaho Statesman’s Business Insider magazine as part of a special section on residential real estate.