Vent! Why is real estate investing so shady!?!?

78 Replies

I’ve been wanting to become a real estate investor for years now. I have 2 rentals that I did through traditional mortgages but am craving more. BUT EVERY TIME I try to learn more about different ways to actually become an investor, I hit a SCAM or system or guru. It’s so frustrating! I get that people want to be paid for their time/system/product but it’s so annoying to do your due diligence only to find out you just wasted time and got your hopes up. At least I dodged a bullet before handing over the credit card. ugh! Had to vent.

Lol, I feel the same way too. I’m even cautious with the content I consume on bigger pockets.

@Elizabeth D.

Good to hear that you want more. You don't need a system or product. You may not even need a mentor. Everything you need to know is on BP and google. Network with local REI meet-ups. Have your goal and your focus (ie. commercial, SFH, MFH, storage, etc) and hustle. Walk properties even if you are not planning on buying. analyze hundreds of deals using BP calculators, network with lenders, brokers, etc. Read books, listen to podcasts, etc. I never put out my credit card to purchase anything REI related unless I needed to close on a deal.

OK I lied...I did subscribe to BP LOL! but paid me back 100 times over with their calculators I use constantly.

I'm laughing now.  Why do you think of all the "SCAM or system or guru" you encounter are not what you actually need.

What due diligence are you talking about.

Simple math is your answer1 + 2 = 3

1 - You are about to embark on a path where you will be responsible for handling Billions of dollars (yes...billions...if you do it right), and you want to be smart enough to make sure the scales tip in your direction...as far as those dollars are concerned.

2 - Real Estate Investing is a career choice, or at least you need to think and act on it that way, in order to be successful.  Doctors, Lawyers, Architects, Hairdressers, etc...will spend thousands and thousands of dollars to educate themselves for their chosen career path...and think nothing of it.

3 - When you add up 1 + 2 above, you should expect to pay for your career path knowledge as well.  Why are you so much against it?  Not all knowledge sources are equal, but to dismiss them all as "shady", or "scams", only hurts you.

Oh, and systems are everywhere there is success.  It's that "system" that allows those that develop them (in any arena) to gain that success.  A good system is critical to real estate success.  The key is to develop one, or more (options), that will bring you your own success.

@Elizabeth D. - @Joe Villeneuve is laying out great perspective. I've done a few courses myself - all have been less than $2,000. One of the courses I got through, tried it, and didn't like it - but I still learned something from it! 

Do you need to spend $25,000 for a course? I don't know - maybe, maybe not - likely not. I think it depends on what type of person you are. If you need someone to hold your hand and give you all the systems then you might. But, if you like to figure things out a bit and have a little guidance then a few of the lower cost courses may be for you.

Another thing - Are there some programs that are not what they are touted to be? Yes! But there are also some great programs out there that give awesome content and can really make a difference between you moving forward and not. 

Maybe you go and work for someone who is crushing it doing what you want to do in real estate FOR FREE. This will allow you to gain knowledge that you can apply yourself on your own projects in the future.

He who can, does. He who cannot, teaches.

Originally posted by @Tom Gimer :

He who can, does. He who cannot, teaches.

 No, He who Can passes that knowledge to others.  If they don't, that knowledge dies with the person who can both "do" and "teach".

Originally posted by @Joe Villeneuve :

I'm laughing now.  Why do you think of all the "SCAM or system or guru" you encounter are not what you actually need.

What due diligence are you talking about.

Simple math is your answer1 + 2 = 3

1 - You are about to embark on a path where you will be responsible for handling Billions of dollars (yes...billions...if you do it right), and you want to be smart enough to make sure the scales tip in your direction...as far as those dollars are concerned.

2 - Real Estate Investing is a career choice, or at least you need to think and act on it that way, in order to be successful.  Doctors, Lawyers, Architects, Hairdressers, etc...will spend thousands and thousands of dollars to educate themselves for their chosen career path...and think nothing of it.

3 - When you add up 1 + 2 above, you should expect to pay for your career path knowledge as well.  Why are you so much against it?  Not all knowledge sources are equal, but to dismiss them all as "shady", or "scams", only hurts you.

Oh, and systems are everywhere there is success.  It's that "system" that allows those that develop them (in any arena) to gain that success.  A good system is critical to real estate success.  The key is to develop one, or more (options), that will bring you your own success.

 I agree, however I should mention that a lot of people learn through experience. They didn't have any sort of professional education, but learned through success and failure how to go about creating a successful investment strategy.

Originally posted by @Anthony Gayden :
Originally posted by @Joe Villeneuve:

I'm laughing now.  Why do you think of all the "SCAM or system or guru" you encounter are not what you actually need.

What due diligence are you talking about.

Simple math is your answer1 + 2 = 3

1 - You are about to embark on a path where you will be responsible for handling Billions of dollars (yes...billions...if you do it right), and you want to be smart enough to make sure the scales tip in your direction...as far as those dollars are concerned.

2 - Real Estate Investing is a career choice, or at least you need to think and act on it that way, in order to be successful.  Doctors, Lawyers, Architects, Hairdressers, etc...will spend thousands and thousands of dollars to educate themselves for their chosen career path...and think nothing of it.

3 - When you add up 1 + 2 above, you should expect to pay for your career path knowledge as well.  Why are you so much against it?  Not all knowledge sources are equal, but to dismiss them all as "shady", or "scams", only hurts you.

Oh, and systems are everywhere there is success.  It's that "system" that allows those that develop them (in any arena) to gain that success.  A good system is critical to real estate success.  The key is to develop one, or more (options), that will bring you your own success.

 I agree, however I should mention that a lot of people learn through experience. They didn't have any sort of professional education, but learned through success and failure how to go about creating a successful investment strategy.

 True.  However, it's cheaper to learn from the experience of others.

This is not restricted to our business. Every aspect of our society has guru's and scams.

Whenever individuals seek shortcuts and easy routes to achieving a goal there will always be guru's standing by waiting to assist.  

There are a lot of people who try to profit off their knowledge of different real estate investment systems. Not saying their information is bad and not saying their system is flawed. However if you are wanting to learn without paying for the knowledge I would suggest reaching out in your network and try to find some other like minded people to discuss plans and strategies. Talk to other people in you area who are doing what you would like to be doing, find a local REI group to meet up with, or just talk to your local realtors. They all have valuable information and experiences to share and usually there is no cost save for maybe for a coffee or cocktail wherever you go to meet up. Having one on one conversations with these people is an invaluable tool in teaching you more about the investing process, and everyone is different and everyone learns and achieves success in different ways you have to find the path that makes you happy. Part of being successful with it is loving what your doing.

Originally posted by @Joe Villeneuve :
Originally posted by @Tom Gimer:

He who can, does. He who cannot, teaches.

 No, He who Can passes that knowledge to others.  If they don't, that knowledge dies with the person who can both "do" and "teach".

Before I go, I just want to pass my knowledge along. All I ask for in return is your credit card.

Originally posted by @Tom Gimer :
Originally posted by @Joe Villeneuve:
Originally posted by @Tom Gimer:

He who can, does. He who cannot, teaches.

 No, He who Can passes that knowledge to others.  If they don't, that knowledge dies with the person who can both "do" and "teach".

Before I go, I just want to pass my knowledge along. All I ask for in return is your credit card.

 Sounds like the same thing a University will tell you.

you can start in the library for the price of a library card. and you can buy most of the guru's written materials and tapes and CDs on E bay type of site for next to nothing from those who took the courses. etc.

much of the information is the same for the last 100 years.. this is not a complicated business or system.

you could also take a pre licensing course that will teach you laws ( which is important) and vocabulary ( which is important) and those are modest in price.. 

There is HUGE money in being a Guru if you make it to the top of Guru ing  BIG money. 

I have been to many of the events as an invited guest or vendor on the finance side when a student wants to buy a rental etc.. they are actually pretty fun things to go to.. and like with all big guru events i think one out of ten will go off and do something with what they learn.. maybe less.. but thats the same with all real estate be it sales or those that pop on BP  there are 500k people on BP i seriously doubt 500k of them are active in real estate

@Elizabeth D. have you tried going to your local Bp meet ups? The typically free and the networks I have made through them are priceless. I would definitely recommend starting there. I am sure some has already said this. The best way to learn how to be a real estate investor is by doing it! Even if you make mistakes along the way, atleast you are working on an investment property as opposed to shelling out hundreds if not thousands of dollars to someone else. 

I think you are on the right track, but would definitely suggest going to a few meetings. 

Due diligence is the ever important key to successful REI. Sounds like you're mastering the skill @Elizabeth D. ! So others can learn from you, what bullet did you dodge and how? 

Everything is shady (where  there is money involved). Even more so when there is money involved with the notion that you CAN get rich quick! People are slimeballs. Why do you think I changed my papers to Monkey!

@Elizabeth D.

Yes. Some people are outright scamming. These are the folks that sell get rich quick schemes on television late at night when the Ambien is working. They will show beautiful families hanging out by the swimming pool because they no longer have to work after buying rental properties with no money down - and you can do it too.

But, that's not necessarily a scam. The ones that are scams won't return your calls when you want to cancel and continue to charge your credit card until you threaten to sue. The leaders of these systems often do jail time for fraud and then reinvent themselves with other systems.

Outside of the that, every industry has gurus. There isn't a single industry that I've worked in that didn't have someone with "inside" knowledge of the industry and was willing to help you accelerate your career for the price of a three day seminar or an ongoing monthly coaching program. That's mostly just education for the people too impatient to look it up themselves... or they need someone to hold their hands because they can't make any decisions on their own.

No matter what field you're in, you'll need a mentor and a coach. A mentor is someone that you can bounce ideas off of during coffee or lunch. A coach is going to keep you accountable to your business and your goals and tell you things you might not want to hear, but you need to hear that advice. Michael Jordan was the best of the best, but only because he had a coach (Tim S. Grover). His coach didn't teach him how to play the game, he taught Michael how to be Michael Jordan. And even coaches have coaches. Tony Robbins has a coach - Jay Abraham (a very expensive coach).

Unfortunately, there are a lot of people that profit off of group coaching. It usually starts with a free seminar. Followed by an entry level paid system. But then they tell you that the real "information" is waiting in a platinum level program for $30,000 (even more for one-on-one inner circle). Those systems are usually scams in nature, always up-selling their students for more and more information that can easily be gleamed with ten minutes using Google or Bing.

Really good coaching, no matter the industry, is about accountability. They will help you set goals that push you beyond your own thinking patterns and then make you accountable to the activities that will achieve those goals.

The problem people have is that they often don't follow through with any of the information, free or "platinum" level.

Originally posted by @Melissa Gittens :

@Elizabeth D. have you tried going to your local Bp meet ups? The typically free and the networks I have made through them are priceless. I would definitely recommend starting there. I am sure some has already said this. The best way to learn how to be a real estate investor is by doing it! Even if you make mistakes along the way, atleast you are working on an investment property as opposed to shelling out hundreds if not thousands of dollars to someone else. 

I think you are on the right track, but would definitely suggest going to a few meetings. 

 Why do I feel like these meetups are a friggin waste of time? It is like a group for alcoholics. Hi I am  Monkey and I want to be a real estate investor.

I know everyone will say it is good to network and yada yada yada.

Seems to me that everyone seems to be "friendly" but they all have their own hidden agenda. I can't put my finger on it, but I just get such a bad taste in my mouth with these meetups.

The first meet up I went to I introduced myself and said I want to invest in entire CT. OMG I got chewed out. NOO you will never make it, start small, do one city first, you do not know the market it went on and on. I just nodded and smiled and thought to myself. This is the last time any of you will see my face...

@Elizabeth D. , if you're honestly interested in starting in this business (which, by the way, is a hell of a good time, with truly unlimited income potential), then you WILL need some sort of education.  "gurus" know this, and if you're wondering why there are so many of them out there, the answer is simple:  because there are hordes and hordes of new "investors" out there here in 2018.   there's more money right now in selling "training" or "motivation" to new investors than there is in selling them properties! :)

that said, you absolutely do need a "system".  this could be a system that exists right now that someone else has developed.  it could be a system that you create based on your research.  but going in without a plan, without the technical knowledge and without educational support is going to result in failure.  

my suggestion?  get your investing training locally.  not online, not through a than merrill course, but locally.  there are real estate investing groups in your area that get people of like minds together, and offer training to boot.  this is where you want to start.  

oh, and read books.  TONS of books. 

you can do this.  and the best way to do it is to begin.

Originally posted by @Jerryll Noorden :
Originally posted by @Melissa Gittens:

@Elizabeth D. have you tried going to your local Bp meet ups? The typically free and the networks I have made through them are priceless. I would definitely recommend starting there. I am sure some has already said this. The best way to learn how to be a real estate investor is by doing it! Even if you make mistakes along the way, atleast you are working on an investment property as opposed to shelling out hundreds if not thousands of dollars to someone else. 

I think you are on the right track, but would definitely suggest going to a few meetings. 

 Why do I feel like these meetups are a friggin waste of time? It is like a group for alcoholics. Hi I am  Monkey and I want to be a real estate investor.

I know everyone will say it is good to network and yada yada yada.

Seems to me that everyone seems to be "friendly" but they all have their own hidden agenda. I can't put my finger on it, but I just get such a bad taste in my mouth with these meetups.

The first meet up I went to I introduced myself and said I want to invest in entire CT. OMG I got chewed out. NOO you will never make it, start small, do one city first, you do not know the market it went on and on. I just nodded and smiled and thought to myself. This is the last time any of you will see my face...

 Geez Jerryll...did we wake up on the wrong side of life?

Local REI Groups are great. Yes there are ones that are just platforms for selling things, but they are also great for networking. The ones that attend as spectators will get nothing out of it. The ones that attend with the idea of meeting others with potential of partners, knowledge, etc...will benefit greatly. You have to put out more of an effort, and you have to go in with an positive attitude...and if you are not willing to accept others may have differing opinions than you, you are missing out. That's the best example of, "you don't know what you don't know"...and if you aren't open to other ideas, you never will.

I have been a part of both extremes, but the people I've met at both have enhanced my options, my knowledge, my partnerships, my friends, my bank account, and more.

Originally posted by @Jerryll Noorden :
Originally posted by @Melissa Gittens:

@Elizabeth D. have you tried going to your local Bp meet ups? The typically free and the networks I have made through them are priceless. I would definitely recommend starting there. I am sure some has already said this. The best way to learn how to be a real estate investor is by doing it! Even if you make mistakes along the way, atleast you are working on an investment property as opposed to shelling out hundreds if not thousands of dollars to someone else. 

I think you are on the right track, but would definitely suggest going to a few meetings. 

 Why do I feel like these meetups are a friggin waste of time? It is like a group for alcoholics. Hi I am  Monkey and I want to be a real estate investor.

I know everyone will say it is good to network and yada yada yada.

Seems to me that everyone seems to be "friendly" but they all have their own hidden agenda. I can't put my finger on it, but I just get such a bad taste in my mouth with these meetups.

The first meet up I went to I introduced myself and said I want to invest in entire CT. OMG I got chewed out. NOO you will never make it, start small, do one city first, you do not know the market it went on and on. I just nodded and smiled and thought to myself. This is the last time any of you will see my face...

Well, sorry to say it, Jerryll, but they happen to be right.  Markets DO change from town to town, from neighborhood to neighborhood, sometimes even from block to block. Then again, CT is not that big - it's the size of some counties in other states.

I have a mentor here in this area who has been in REI for 40 years, and has been (what IL now calls) a managing broker for about half of that. He knows Aurora, IL and the surrounding markets where he invests, but tends to avoid the City of Chicago due to C(r)ook County issues, low Cap rates, etc.

It's great to have the vision to cover your whole home state. Do start "small" and grow, however. Learn one market, then the neighboring market, and so on until your territory covers bigger and bigger areas, THEN - eventually - the whole state. Years from now YOU can be the guy who knows the markets and can guide others you may choose to mentor, if you are so inclined.

My $0.02 ...

Originally posted by @David Dachtera :
Originally posted by @Jerryll Noorden:
Originally posted by @Melissa Gittens:

@Elizabeth D. have you tried going to your local Bp meet ups? The typically free and the networks I have made through them are priceless. I would definitely recommend starting there. I am sure some has already said this. The best way to learn how to be a real estate investor is by doing it! Even if you make mistakes along the way, atleast you are working on an investment property as opposed to shelling out hundreds if not thousands of dollars to someone else. 

I think you are on the right track, but would definitely suggest going to a few meetings. 

 Why do I feel like these meetups are a friggin waste of time? It is like a group for alcoholics. Hi I am  Monkey and I want to be a real estate investor.

I know everyone will say it is good to network and yada yada yada.

Seems to me that everyone seems to be "friendly" but they all have their own hidden agenda. I can't put my finger on it, but I just get such a bad taste in my mouth with these meetups.

The first meet up I went to I introduced myself and said I want to invest in entire CT. OMG I got chewed out. NOO you will never make it, start small, do one city first, you do not know the market it went on and on. I just nodded and smiled and thought to myself. This is the last time any of you will see my face...

Well, sorry to say it, Jerryll, but they happen to be right.  Markets DO change from town to town, from neighborhood to neighborhood, sometimes even from block to block. Then again, CT is not that big - it's the size of some counties in other states.

I have a mentor here in this area who has been in REI for 40 years, and has been (what IL now calls) a managing broker for about half of that. He knows Aurora, IL and the surrounding markets where he invests, but tends to avoid the City of Chicago due to C(r)ook County issues, low Cap rates, etc.

It's great to have the vision to cover your whole home state. Do start "small" and grow, however. Learn one market, then the neighboring market, and so on until your territory covers bigger and bigger areas, THEN - eventually - the whole state. Years from know YOU can be the guy who knows the markets and can guide others you may choose to mentor, if you are so inclined.

My $0.02 ...

"Well, sorry to say it, Jerryll, but they happen to be right. Markets DO change from town to town, from neighborhood to neighborhood, sometimes even from block to block. Then again, CT is not that big - it's the size of some counties in other states. "

This should be obvious.  I guess not. 

So there’s a mix of “scam” and just “poor education expectations” and “overpriced education” that happens in any investment area. Just look at advertisements to buy gold, do they shout about commissions from the rooftops? If you buy a mutual fund with a management fee, is that a scam? How many day-trading ads do you hear on the radio?

Bottom line: There is no free or paid guaranteed system to make money.

Anyone who thinks they’re going to get “all of the real estate secrets” in a free seminar, 3 day weekend retreat, etc. just has horrible expectations. It’s just not that easy. Now if $25K for a coach, system, etc. is worth it to you is a different question all together.

However, to think someone is going to rent a hotel ballroom, pay for marketing, pay people to help with registration, and believe they’re doing it in an effort to lose money...is...well...a “you” problem.

What I think really happens is people often go with the intention of “scamming the guru”. Just sit through a free seminar at the local Hilton, get all of the “secrets” and then just bail with the guru paying for parking and lunch! Yee haw!

If you need a system, seek out how to pay for the best system for you. If you need a coach, seek out how to find (and remunerate) the best coach for you. If you don’t need a system, cruise BiggerPockets, head to the local library, etc. You can learn a ton!

But when I think “scam” I think HMLs with upfront $500 application fees, wholesalers who don’t have the ability to close but claim to be cash-buyers, not disclosing affiliate marketing relationships, back in the day you had collusion with appraisers and loan originators, etc. There are tons of them out there.

Originally posted by @Andrew Johnson :

So there’s a mix of “scam” and just “poor education expectations” and “overpriced education” that happens in any investment area. Just look at advertisements to buy gold, do they shout about commissions from the rooftops? If you buy a mutual fund with a management fee, is that a scam? How many day-trading ads do you hear on the radio?

Bottom line: There is no free or paid guaranteed system to make money.

Anyone who thinks they’re going to get “all of the real estate secrets” in a free seminar, 3 day weekend retreat, etc. just has horrible expectations. It’s just not that easy. Now if $25K for a coach, system, etc. is worth it to you is a different question all together.

However, to think someone is going to rent a hotel ballroom, pay for marketing, pay people to help with registration, and believe they’re doing it in an effort to lose money...is...well...a “you” problem.

What I think really happens is people often go with the intention of “scamming the guru”. Just sit through a free seminar at the local Hilton, get all of the “secrets” and then just bail with the guru paying for parking and lunch! Yee haw!

If you need a system, seek out how to pay for the best system for you. If you need a coach, seek out how to find (and remunerate) the best coach for you. If you don’t need a system, cruise BiggerPockets, head to the local library, etc. You can learn a ton!

But when I think “scam” I think HMLs with upfront $500 application fees, wholesalers who don’t have the ability to close but claim to be cash-buyers, not disclosing affiliate marketing relationships, back in the day you had collusion with appraisers and loan originators, etc. There are tons of them out there.

 "We have a winner"...well said.

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