As the real estate market heats up, so does real estate investing interest. And, as interest increases, so do the number of people who want to “teach” you how to do it. So, how can you tell which REI gurus are legit and which ones are just sleazy operators out to get your money?
John Trautman, a “Real” Real Estate Investor, says this, “Fake online gurus show pictures of their green Lamborghini. Why are they showing you pictures of their car? They should be showing you pictures of their latest investing projects. Make sure you are taking advice from the right person.”
Here are some tips for weeding out the rips offs from the real deal.
They Connect Themselves with Someone Famous
Although the investment seminar may be associated with someone on HGTV, these stars rarely show up at the event. In fact, they usually have little to do with the seminar or what is taught.
Instead of seeking out someone with a celebrity connection, look for someone with good referrals. If you speak to someone who has been through the seminar, and they found it useful, then you might be on the right track.
However, be aware of fake reviews. Seek a referral from someone in your area and ask them about the properties they bought using the advice in the seminar. Always check to see if they are telling the truth!
In terms of real estate, there are no sure bets – there are always risks involved. So, if someone tells you that they can give you information to eliminate all risks, then you have a scam on your hands. Either that or they have so little experience that they don’t understand the risks themselves.
Another false promise is that their seminar will teach you how to get rich quick. The truth is that real estate investors put in long hours over a long period of time. There is no get-rich-quick scenario.
Other things to be aware of:
- Advertising strategies for low or no down payments for homes
- Course materials with more psychological feel-good slogans than real information
- Stating they do 10 or more deals per month – this is unlikely, especially if they take time to give seminars
- Unbelievable seminar title names, such as: Make Six Figures in Three Months Without Investing Your Own Money or Time.
- Has a one-size-fits-all program rather than a program for a niche market
Can’t Pass a Background Check
One of the first things you’ll learn when taking a legitimate real estate investing course is that due diligence is essential if you want to find the right property. The same is true for finding the right person to teach you the ropes.
Be sure to do a bit of digging to learn about the person giving the seminar. This is easy to do with a good search engine. What should you look for?
- Proof that they make money with real estate investing, not just by giving real estate investing seminars
- A long history of active investing
- Absent from scam sites such as Scams Galore
- Good reviews on Consumer Affairs
- Number of lawsuits against them
- In addition to investing in real estate, they are also part MLM organizations and/or sell a variety of non-related real estate products – this shows that they are just good at Internet marketing, not necessarily good at real estate investing.
When looking at reviews, you will likely see a few negative ones. However, the goal is to see far more positive. Look closely at the negative reviews to see if there is a trend. You may learn that there is an information gap, or there is some other issue with the program.
You can also contact the person running the seminar to ask about their experience. They should be able to show you the details of at least three deals within the past year.
Lack of a Money-Back Guarantee
“Real” Real Estate Investing programs have no problem offering a money-back guarantee because they stand behind what they teach to investors. So, if a money-back guarantee is not offered, that is a clear sign to move on.
However, even with such a guarantee, you need to be sure that they honor it. The best way to do so is by looking at the Better Business Bureau to see if there are any complaints about the money-back guarantee.
In addition to a money back guarantee, you need to see how you will be billed for the seminar. Watch out for automated monthly credit card billing. You want to be sure that you are only paying for what you actually want to pay for and not additional products.
Finally, the guru in question should offer free informational articles or product downloads. If they don’t have free materials, the seminar will likely be a rip-off.
The “Real” Real Estate Investor
John Trautman, Co-Founder of Real Estate Knowledge Institute (REKI), is a “real” real estate investor. He has been actively investing since his early 20’s, participating in both flipping and holding. Even during the real estate downturn, when many lost everything, John flourished investing in single-family homes in distressed markets in Michigan and Arizona. He brings all of the knowledge, as well as his passion, to those he mentors through REKI.
Trent Ellingford, a REKI student and investor, says, “I’ve had the opportunity to work with a lot of real estate TV celebrities – seriously, a ton of them. What I liked about John immediately was he was real and authentic. It was obvious that real estate investing is his business – he does it day in and day out. He sincerely wants to see other people succeed. Even though REKI does provide training and education, real estate investing is the core of his business.”
So, don’t get ripped-off. Stay away from scam artist gurus willing to take your money and provide nothing of value in return. Instead, turn to a “real” real estate investor, like John and the other board members at REKI. Click here, to learn more about John and REKI.