You know what’s easier than selling houses? Selling advice on how to sell houses. In fact, it’s an extremely popular business. What makes it so easy, besides demand, is that whoever provides the advice doesn’t actually need to help anyone sell a house. They just need to make people think they can. In the time-honored American tradition, the performance of success becomes success itself. As Jay Gatz realized as he decided to become Gatsby: “the rock of the world is founded on a fairy’s wing.” How do I know? I got rocked.
I’m a little brother, and so I’ve always had a thing for role models. I look for people who’ve had success before me and ask them how they did it. So when I decided to become a real estate investor, I looked for people who could tell me how. I bought the books; I took the classes; I subscribed to the tools. When they asked for my money, I paid it. I’d tell myself it was an investment—that these experts, these leaders, these gurus, were honestly trying to help me. Why wouldn’t they?
But none of them ever led me to a deal I could make work. It was always coming at the next real estate investing class, the better class, the more expensive class. That’s when we’d really get into the business. Surely at the end of it all, I would be a real estate investor. All I had to do was sign up for one more bus tour!
I did learn one thing from all these real estate investing gurus: how to smell a dead rat. So, now that I’m wiser, I’ve got some real estate advice of my own to give you. Don’t worry. It’s free.
Five Ways to Spot a Real Estate Investing Scam
Everyone has to learn somehow, and it’s reasonable to want some advice before spending a hundred thousand or so on some single-family you found on Zillow. To be clear, I sincerely advocate educating yourself before you start investing. What I want to help you avoid is overpaying and wasting time on redundant, unhelpful, or unsavory advice. I’m not saying don’t read up on real estate investing; I’m saying consider checking one of the better books out of your local library.
That said, here are some of the top tricks and traps that I’ve seen played and laid in the real estate investing world:
Pearls of Wisdom. Pearls are the hardened secretions of filter-feeding bottom-dwellers, which can sell for thousands of dollars. Many real estate gurus and experts sell pearls of wisdom—limited speaking engagements that offer a few nuggets of basic real estate information. These are high-dollar events, and when they’re over, they’re over. Why do they cost so much? Because people will pay it. You might get to shake the real estate investing guru’s hand, but good luck getting their phone number. Enjoy the pearls, and try not to think about the house you could’ve bought with that collateral.
The Next Class. Some real estate experts will be real with you—they’ll tell you there’s too much to learn about real estate investing to pick it all up in a single session. Which is true, in a way. You can get thousands of hours of learning by spending a year investing full time. But that’s not what they’re selling. Instead, they want you to take their next house flipping class. It may be detailed, finely focused on an aspect of the business. But, of course, it won’t give you the full picture—for that, you need to sign up for the next class. And, the next. At a couple thousand dollars each, hopefully it won’t take you too long to learn your lesson.
Apprenticeships for a Cut. Instead of nickel-and-diming you by the class, some programs just ask for your whole wallet at once. In return, they parade the opportunity to attend and be certified by their real estate investing school. Top students can even become apprentices! That is, after a few years in the classroom. All they ask in return is a fat slice—say, half—of your profits once you’ve “graduated” to your full apprenticeship. Congratulations! You just bought a job, and sold your future.
Mentors for Hire. In addition to classes, some real estate education programs sell access to mentors. These mentors are allegedly experienced, successful investors who will help you find deals and provide advice. You better hope they’ll find you many good deals because you’ll need them to cover the cost of your mentor. As an ongoing service, your mentorship can be part of your overhead on every deal for as long as you continue. Before you sign up, ask questions. How many other mentees does your mentor have? When and how often are they available? How long have they been in the area?
The Chance to Meet Your Heroes! Several different celebrity house-flipping shows reach large audiences, and several different celebrity house flippers have come up with a way to monetize that—selling real estate advice. Typically these are touring shows—I mean seminars—performed by professional touring pitchmen. The shows are an uneven mix of basic advice, and upsells, heavier on the upsells. Occasionally one of the celebrities will appear. For the price tag, you’re often better off catching it on cable.
My advice? Check out the free advice. Compare it, weigh it, prepare yourself, and act on it. Don’t worry about peering behind the curtain. We’ve all known for a hundred years that Oz is a humbug.
That also doesn’t mean you can’t find friends and partners along the way. Especially if you’re just starting, you might not have the confidence and skills to go it alone right away. Joining a good team, that’s invested in your success, offers you the opportunity to get a head start, without paying an arm and a leg for it.
Learning With a Mentor Who Is Invested in You
The training I got from HomeVestors was different. It reminded me of learning from my brother in my younger days. When he would teach me something, he wasn’t doing it for him—he was doing it because he wanted me to succeed. Becoming an independently owned and operated HomeVestors® franchisee was similar.
HomeVestors gave me a comprehensive week-long training, practical advice, access to financial resources, and most importantly, qualified leads. Their training program wasn’t crowded with upsells, and my mentor wasn’t too busy to lend me a hand when I asked. Because I was part of the team, they wanted me to succeed and designed their program to help franchisees do just that.
Why listen to real estate gurus who don’t have a stake in your success? Request more information to learn how HomeVestors gives franchisees the support to help them achieve.
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