Masters programs are notoriously difficult to assess student quality or outcomes. Some students rave about their tutors while others complain about how they were deceived by fake tutors.
Six signs your real estate “guru” might be a scammer
There are some patterns that raise yellow and/or red flags that I would like to point out are worthy of attention and should give you some skepticism when deciding whether to spend thousands (or sometimes tens of thousands) of dollars on master training.
1. They have endless conversations with celebrities
Gurus often show off their networks, which include celebrities they have “invested in” or pledged to attend their courses or seminars. The celebrities most likely won’t show up live, and the closest you can get to them is by recording them discussing all of the great benefits of real estate, which is sure to take you from “average Joe” to a rock star with a yacht.
2. You will get rich quickly! Or will you?
Real estate investing and wealth building is a very long-term game that requires significant capital, education, and risk. Real estate is a very slow, long-term investment, including cyclical markets that can take years to recover.
Not investing money, not taking the time to educate, and relying on courses to help you get your first deal is the best way to increase your risk and get off to a false start. No down payment and low down payment are very common practices when you are getting started, but take this as your warning that if you don’t have the money, you should reconsider investing courses or your first deal.
Furthermore, when it comes to “no money required” advice, you will be surrounded by advice that will teach you “why” you should invest in real estate rather than “how” to actually invest in real estate. Don’t suffer from shiny object syndrome, and definitely don’t let the redundancy of FOMO (fear of missing out) influence your decision to invest in real estate.
Here are some very common phrases that should set off alarm bells and should definitely be avoided:
- “How to invest in real estate without doing any real work!”
- “Rely on this secret to make a fortune from real estate speculation!”
- Of course, my personal favorite is: “Automate your portfolio and travel the world while your tenants pay their mortgages.”
3. No money back guarantee
Legit programs offer a money-back guarantee if you’re not satisfied with the product. One important way to increase your risk is to attend a program, group or workshop that requires payment of a referral fee but does not mention a money-back guarantee in its description.
Expectations should also vary based on the duration of the program. If you are 14 weeks into your 15 week course, I don’t think you would ask for a refund. But a two-week program? I would definitely like to have some form of money back guarantee.
4. You’ll be surrounded by upsells
You’ll be inundated with content about how gurus were just like you before becoming super rich. You’ll find workshops that focus on the benefits of why you should invest in real estate, how your day job can hold you back from becoming a successful entrepreneur, and, of course, opening your wallet to pay for advanced courses.
If you register during the free webinar period, you may find that premium courses are heavily discounted, which can lead to even more FOMO. Don’t be pressured into making trading decisions that sound too sweet. If it was important when you were doing a webinar, it will definitely be important tomorrow.
5. There are no risks or downsides to real estate!
All investing comes with risks. So when you’re told a “guaranteed way to get rich,” run in the other direction.
If you think there are no risks associated with investing in real estate, you are completely misinformed. Like any investment, real estate can go up or down. You can make a ton of money when you do your research and invest wisely, but you can easily lose a lot of money if you don’t know what you’re doing. Not to mention those unexpected or completely unknown factors that could be deal breakers.
6. Overwhelmingly positive reviews and reviews from students
“Reviews” about the guru come entirely or overwhelmingly from individuals who have created accounts on BiggerPockets who appear to have no other purpose than to express their undying love and/or personal loyalty to the guru and to spend $5,000 to $100,000 to live a complete life The shift was reviewed at length in a short space of time, without a rational assessment of the pros and cons of the plan and what it has achieved so far.
Tips to avoid fake gurus
Now that you know some of the most common tactics that can trap you, you may be wondering: How do I avoid this?
Having grown up in the digital age, I can attest to the fact that with the popularity of online education, it’s easy to fall into the “guru trap.” Aspiring to become a real estate investor requires spending hours, days, or even years in your education, and staying away from the industry’s get-rich-quick habits will only serve you in the long run.
I’ve paid for courses and projects without receiving the returns I expected, so let the following tips help you avoid pitfalls and save your time, energy, and hard-earned capital.
Use our trusted friend Google
This will take five minutes of your time and will provide you with a wealth of information about a specific guru from multiple sources. You’ll definitely find feedback, both positive and negative, and may find some nuggets about pricing for add-on plans that will be launched later. I would add that one step further than Google is to check the Better Business Bureau website to see if consumers have complained that the company did not deliver on its services or promises.
Ask a question in the forum
As long as I live, I will beat this drum. There are many ways you can find out information about a guru before asking about their products directly from the source. This is not a shameless plug on the BiggerPockets forum, but I guarantee you that our community will guide you away from these types of traps.
Over the years our community has been on the forum, our community may not have answered your real estate questions in detail, but you should never let this stop you from asking again and seeking more information. We have an extremely dense community of investors who either have the same problem or have had negative experiences that will be shared and shed more light on the situation.
Test free subscriptions and services
Often, you’ll find that you need to upgrade to the next tier to unlock basic services, tools, or platforms that you might be able to use for free! If you’re not making any money on the “free” service, don’t upgrade to anything extra. If you don’t make money in the free program, why make money in the premium program?
It’s a business – treat it like a business
Even though you think investing in real estate is emotional, it all comes down to your numbers. I guarantee you that talking to a guru will make you feel like you are on the sidelines and you will miss out on the most golden opportunity of your life.
Automating systems, subscribing to tiered communities, paying for coaching calls, taking online courses, and paying for private Internet trips (aka vacations) all sound amazing and feel like something today’s investors do every day things. However, this is not the case, especially for beginners. There’s no secret to the sauce other than consistent action.
Here are some action items:
- Attend a local meetup
- Daily analysis of transactions
- Listen to Podcast
- Talk to agents and property managers for leads
- Connect in a free online community
- Shopping rates from different lenders
- Strengthen your personal financial habits
- Pay less for books
I could list many more things that would be more beneficial to you.
final thoughts
I was lucky enough to stumble upon BiggerPockets early in my career, and being able to ask questions to a trusted community has saved me hundreds, if not thousands, of dollars in education alone.
Don’t make the same mistakes we see over and over again, and always do as much research as you can until you feel comfortable continuing your efforts. I’ve made mistakes in the past and will continue to make them in the future, but because I’m so proud to be a part of it, those mistakes will certainly be isolated, and at a much lower cost, because of the guardrails of a trusted network.
Are you ready to succeed in real estate investing? Set up a free BiggerPockets account to learn about investing strategies; ask questions and get answers to our community of over 2 million members; connect with investor-friendly agents; and more.
Notes on BiggerPockets: These are the opinions written by the author and do not necessarily represent the views of BiggerPockets.
