Teaching High School Students about Real Estate Investing-THANKS!
Saint Louis, MO · Member since 2017 · 4 posts · 7 votes
Teaching High School Students about Real Estate Investing-THANKS!
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Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
9ySounds like a child labor scam to me, lol, hope they are 16 or older in Mo.
I'm also very skeptical about "at risk" kids being taught real estate "investing", none are in a position to "invest" as minors and I doubt they have the education background to begin in real estate operations generally, like business law, real estate law, finance or basic economics to grasp the concepts of value and appraisals. Not saying we don't have smart kids that can learn, but learn what, from who?
It's one thing to spin guru stuff off on adults, entirely different pumping kids full of such stuff.
Hey, you might be affiliated with the University of St. Louis, teaching with field trips and participation in trades, but it doesn't sound like it using materials that include questionable tactics to begin with, like wholesaling.
I'm pretty familiar with the non-profit world, as well as "at risk" kids and low income households, the requirements for 501C3 can be met with the "at risk" angle, profits can be paid after earnings for labor contributions, expenses and of course the executive directors salary, but profits cannot go to members or officers or directors. So, it just sounds like a fix and flip or construction entity using kids for free until profits come in, all under the guise of education. Not sure who your attorney is, but you need to talk to them.
Profits to the college account is very nice, but what position are the kids in under tax laws for the 501 series of entities?
Now, that said, my BS Meter went off with sirens blasting, it's pretty accurate but while these are logical assumptions we might address exactly what's going on putting kids in real estate operations. I certainly hope my initial thoughts are incorrect. :)
20 Replies
- Audio Engineer and Investor · Cebu City, Cebu · Member since 2013 · 7k+ posts · 881 votes9y
Hey @Neal Richardson as far as I know, we don't have a PowerPoint presentation for the Guide.
- Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes9y
Sounds like a child labor scam to me, lol, hope they are 16 or older in Mo.
I'm also very skeptical about "at risk" kids being taught real estate "investing", none are in a position to "invest" as minors and I doubt they have the education background to begin in real estate operations generally, like business law, real estate law, finance or basic economics to grasp the concepts of value and appraisals. Not saying we don't have smart kids that can learn, but learn what, from who?
It's one thing to spin guru stuff off on adults, entirely different pumping kids full of such stuff.
Hey, you might be affiliated with the University of St. Louis, teaching with field trips and participation in trades, but it doesn't sound like it using materials that include questionable tactics to begin with, like wholesaling.
I'm pretty familiar with the non-profit world, as well as "at risk" kids and low income households, the requirements for 501C3 can be met with the "at risk" angle, profits can be paid after earnings for labor contributions, expenses and of course the executive directors salary, but profits cannot go to members or officers or directors. So, it just sounds like a fix and flip or construction entity using kids for free until profits come in, all under the guise of education. Not sure who your attorney is, but you need to talk to them.
Profits to the college account is very nice, but what position are the kids in under tax laws for the 501 series of entities?
Now, that said, my BS Meter went off with sirens blasting, it's pretty accurate but while these are logical assumptions we might address exactly what's going on putting kids in real estate operations. I certainly hope my initial thoughts are incorrect. :)
- 9yWilliam BrownPro MemberWholesaler · Los Angeles, CA · Member since 2016 · 276 posts · 181 votesBill Gulley Do you know how much I would have PAID to take a class like that in high school? Oh wait--I still am in high school. I'm a senior and I spend my days wasting my time in classes I don't care about and spend my nights reading and learning as much as I can about REI. I wouldn't care if the teacher made millions off of me, because that is a free education I am getting and that would be me light years ahead of people who took normal courses in high school and then got a degree in some unrelated topic in college and had to start from scratch. I don't understand your reasons.
- Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes9y
Your first obligation to yourself is care about the courses you must take in high school, your future really depends on how well you do! Interesting or not, we all had and have to do things we don't like, might as well learn that lesson now, and do your best at anything you try to do.
As for RE, if you're reading the internet, guru books and listening to guru seminars you are on the wrong track starting off in the business of real estate!
The issue is that there are so many scammers in real estate investing, many teaching you how to get rich, it's hog wash. Real estate is a profession and needs to be approached as any other profession, that means some background in the basics of real estate, why RE is different than personal property, types of deeds, valuation approaches, how and why the market reacts, understand zoning, and other aspects of the dirt you're trying to invest in, a house isn't just a truck load of shoes.
You also need to understand the rules, regulations and laws, you don't need a law degree but you do need to be aware of business and real estate laws.
Best thing you might do is hook up with a real estate agent or broker, work for them, for free if necessary to learn what goes on, what the market is like and why ethical investors do what they do.
Might read my blog...How To Develop A Good BS Meter here on BP, follow that! Then hopefully you'll understand that most often what you are learning is BS, unethical and even illegal practices. Best of luck! :)
- Saint Louis, MO · Member since 2017 · 4 posts · 7 votes9y
I greatly appreciate everyone's comments, critiques, and suggestions. This program is tailored to teach high school students about financial literacy, investing, and entrepreneurship. An aspect of the curriculum is real estate investing. I did not include this in previous post, because BP is a RE site. The actual hands-on work they will be doing on-site will be mostly acting as the General Contractor. They will be obtaining bids, selecting contractors and then shadowing those contractors to learn about the trades. They will do very minimal "labor work", only as it relates to learning about the trades, because a lot of these students will be interested in a career in these skill trades.
Due to many of these students aspiring to be first generation college students, we understand how important it is in creating social equity, by assisting them with the opportunity to participate in unpaid internships or just cover a semester of room & board will be impactful on their future; this is why the scholarship fund is so important to this program. The scholarship agreement is written in a manner that they will still receive funds even if the property isn't sold. However, we want to teach them about the risks of investing and the pride of earning money through a entrepreneurial venture they started.
Thanks again.
- Saint Louis, MO · Member since 2017 · 4 posts · 7 votes9y
@Bill Gulley, I definitely understand your concerns in regards to real estate scams and get rich quick schemes. I have over 10 years of real estate experience, most recently in Community Development of Low-Income Communities, using tax incentives such as LIHTC, NMTC, and HTC. The reason I liked the guide was due to the simplistic approach it took about the basics of financing, identifying prospective property, and budgeting - I agree some of it is not best practice. The youth will learn about how to fix the issues of the blighted neighborhoods they are living in and surrounded by, and how to engage their Alderman and local Community Development Agencies to receive funding to off-set development costs due to the market not being able to support the costs to rehab homes in LIC neighborhoods.
They will do very minimal "labor work", only as it relates to learning about the trades, because a lot of these students will be interested in a career in these skill trades. Definitely not the extensive amount labor you are probably imagining. :-)
All of the homes that will be redeveloped using this program are owned by the City that have been sitting vacant for years. So, it is not about making money at all. It is about building up the youth and the neighborhoods that have lacked development for decades.
If you have any fun game suggestions for the students, please send them my way.
Thanks.
- Investor · Alabaster, AL · Member since 2016 · 280 posts · 88 votes9y
@Neal Richardson, I commend you on the initiative. I'm sure you have or will cover your bases as far as legalities are concerned! There are and will be many nay-sayers. The power of your vision will be what makes the difference and more importantly so the tangible and documented success of your students. I have 2 teens daughters and they participate actively in my real estate business, I have trained them how to think and act as investors and landladies. When my oldest turns 18, I will put one property in her name and let her manage it, and I am confident she will do a great job... that will be my addition to her university training! Keep us updated. God speed!
- Real Estate Agent · Morgantown, WV · Member since 2016 · 100 posts · 41 votes9y
I had shared the concerns expressed above, but as a parent of 2 boys and one of 4 siblings growing up poor, I would have really appreciated to have been taught the *financial literacy* component early on!! Our high school tried to teach accounting/bookkeeping, but it didn't even sound interesting enough to ELECT to take it even when I knew I "should." Especially the concepts of calculating returns (ROI/COC) cross all forms of investing to maintain and grow wealth, and I know I didn't ever hear of those concepts till I was probably 28! ...so Best of Luck Neil!
- 9yWilliam BrownPro MemberWholesaler · Los Angeles, CA · Member since 2016 · 276 posts · 181 votes
On the note of how well you do in high school directly correlates to your "success-o-meter" in life is absolutely true. For most people. For average people.
Let me explain:
Warren Buffet got Cs and Ds all throughout high school
Henry Ford never got more than a 6th grade education
Bill Gates dropped out of Harvard because he found his purpose and pursued it
I could go on and on. I don't wish to be financially free. I don't wish I was rich just so I can flash my sport and super cars to everyone. I am going to build a multi-billion $ empire that has influence across the globe—THAT is my desire.
I don't wish to be average. Ive maintained all As in high school, and will be, (hopefully) going to one of some of the top schools in the nation when I hear back on April 1.
Preaching to the choir about the guru stuff—18 months ago I went in with my mother on a $2,000 weekend 3 day seminar from the group Real Estate Intensive. Of course I knew nothing about them then, and they were your basic gurus.
After finding out it was a scam, just before it was too late, I left with a small fire kindled inside of me. I took about a year off of thinking about it, trying to figure my life out. But 2 months ago I came back with full intentions. Bought $200 of the best books recommended by the guests on the podcasts, signed up here, and have gone to the couple REIAs in my area.
Right now I am trying to connect with local players and to get a job/internship with them over the summer—whether it is paid or unpaid I do not care.
But to go back to your original skepticism about the RE classes taught in High School, I think it is only right to investigate more before we make assumptions. "Using kids for free" being bad simply doesn't make sense. If they are being "used" to make a profit, aren't they learning practical and applicable knowledge? Even if every penny of the profits went to the teacher, why would we have a reason to care? He would be teaching kids lessons and fundamentals ADULTS go and pay $40k for! And as Neal said, the profits would go into a college savings account. Those kids would then go on and change their family from being a "at-risk" to a "well to do". It just seems like a great idea all around, as long as it is indeed ethical and regulated.
Thank you for stating the other side, I always love a good conversation and learned a lot. See ya around :)
- Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes9y
BTW: REI basics is, Offer, Acceptance, EMD, Inspections, Title Search, Title Insurance, Financing, Mortgage types and terms, PMI, and closing. Don't teach hype, zero money down or house hacking and OMG never wholesaling!!
Include how to:
- analyze personal budget to determine IF they are ready to purchase their own homes.
- then how to determine if an REI will create an ROI in the Black vs Red - - goodness there's many on BP that can't get it right - - make'm knowledgeable consumers.
There's plenty of hype and guru techniques on websites - - teach'm how to smell a rat.
- Greensboro, NC · Member since 2016 · 45 posts · 20 votes9yNeal Richardson I applaud you for the work you are undertaking with these students and I hope your program is wildly successful. I would love to hear how the program progresses and to see if it is scalable to spread to other areas of the country. It does sound like a bit of a stretch that these youth will absorb the full real estate investment perspective. From your summary, it sounds like they will be immersed in the world of construction management. That is great in getting their feet wet in the world of real estate from a rehab/construction perspective, but it sounds like the program will focus on this aspect and not provide real world experience in some other critical areas. Since the properties the program will be working on are already acquired, there is a critical gap in the real estate investment mindset that the program does not immerse students in, and that is the art of sourcing, negotiating and closing a property at a good value. I am not knocking your program, but it would be short-sighted to unleash young adults with the belief that they are now prepared to be real estate investors. Maybe acquisitions, negotiations, etc. could be an additional program for your non-profit to offer down the road to those interested. What about other important aspects of successful investing? Financing, renting, managing, exit strategies, market analysis, etc? Would there be further opportunities for these students to get connected with local investors after your program? Some will surely have a fire lit in them, and with some experience in the world of rehab, could build upon their experience in your program. Please let the BP community know if we can do anything to help and best of luck!
- Saint Louis, MO · Member since 2017 · 4 posts · 7 votes9y
@Christine Mwai I appreciate your kind words and support. I have a very experienced real estate and nonprofit focused legal team working with me on this project, so I am definitely covering my bases and paying a pretty penny to do so (out of pocket).
@Connie Bhimireddy Financial literacy is the foundation of this program's curriculum. I agree with all of your statements. We will definitely teach them how to calculate ROI and Cash on Cash.
@William Brown Good luck in your real estate endeavors. Keep pushing and learning as much as you can about the business, then learn some more. I have been in the business for years and assumed several roles, and still learning a lot everyday.
@Jeff B. and @Account Closed Dream Builders will definitely create opportunities for the students to learn the acquisition process. This portion of the course will be more of a simulation. We will be visiting a title company, completing purchase and sale agreements, and go through the entire process of purchasing a home, even having them visit an financial institution to apply for a loan (again a simulation). We are going to be using the most typical practices in purchasing a home (Conventional or FHA for owner-occupied properties). I wouldn't teach them anything I wouldn't do or have seen during my real estate career.
In no way will I earn a profit or any proceeds (I have already spent $10k of my own money), not even a salary as the President. Real Estate has provided me with a great life for my family. As an African-American male raised in a poor household and low-income community, I would be remiss if I did not give back to my community and other young people who feel as though they don't have opportunities to be successful. I was those kids and I want to provide them with something tangible to build the confidence necessary for them to want to do good with their lives. Also I am tired of seeing vacant and dilapidated homes in these communities. So, this is why I started this organization. My reward comes from seeing these kids become successful and inspired to want more out of their lives. Money can never compare to that for me.
Thank you all for your comments, feedback, and suggestions. Please keep them coming. I want to provide as much benefit as possible to these young people.
- 9yMindy JensenPro MemberBiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
My high school had something like this, except with a lot more hands-on labor, and zero profit sharing with the students who did the work. You did get 3 credits, though.
Let me check with Scott about using the Ultimate Beginner's Guide.
- Broker/Investor · Georgetown, TX · Member since 2011 · 249 posts · 146 votes9y
Go for it @Neal Richardson! I'm sure you will tweak the program along the way to make it massively successful. Personally, I'd drop the "at-risk" and profit sharing part since all bored high school students are at-risk and bringing in the financial component has its own set of associated problems. (If you use it to fund an "REI team booster club" it would mitigate many of the hurdles surrounding money.) This is exactly what is missing in the BS curriculum being shoveled these days, which has no component of real world production. And, no hard work breeds success and no entrepreneurial risk of failure. I wish you all the success in the world!
- Member since 2016 · 13k+ posts · 12k+ votes9y
Teaching real estate investing before teaching money management in the real world is trying to teach a child to ride a bike before they can walk.
You must start your program with the very lowest basic understanding of money, budgeting, rent, food, insurance, credit cards etc. first otherwise all you are relaying to them is the old standard investment hype.
- Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes9y
Originally posted by @Neal Richardson:
I greatly appreciate everyone's comments, critiques, and suggestions. This program is tailored to teach high school students about financial literacy, investing, and entrepreneurship. An aspect of the curriculum is real estate investing. I did not include this in previous post, because BP is a RE site. The actual hands-on work they will be doing on-site will be mostly acting as the General Contractor. They will be obtaining bids, selecting contractors and then shadowing those contractors to learn about the trades. They will do very minimal "labor work", only as it relates to learning about the trades, because a lot of these students will be interested in a career in these skill trades.
Due to many of these students aspiring to be first generation college students, we understand how important it is in creating social equity, by assisting them with the opportunity to participate in unpaid internships or just cover a semester of room & board will be impactful on their future; this is why the scholarship fund is so important to this program. The scholarship agreement is written in a manner that they will still receive funds even if the property isn't sold. However, we want to teach them about the risks of investing and the pride of earning money through a entrepreneurial venture they started.
Thanks again.
I think what you are doing is great. Most likely these kids are not seeing any entrepreneurial example in their home. I was not what you would consider at-risk in high school, but I also didn't have entrepreneurial parents. They taught me to go to college and get a job. That was honestly bad advice. They should have encouraged me to start my own business and taught me that working for someone else is not as secure as controlling your own destiny. People who are doubting these kids ability to grasp the concept are completely mistaken. Kids have the ability to dream far beyond what they are taught. It is usually parents and schools that make them dream small. They are told they will not amount to anything from a young age and that is why they don't. Again I think your program is wonderful. I home BP will give you rights to reproduce. Please update on your progress.
- Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes9y
Originally posted by @William Brown:
On the note of how well you do in high school directly correlates to your "success-o-meter" in life is absolutely true. For most people. For average people.
Let me explain:
Warren Buffet got Cs and Ds all throughout high school
Henry Ford never got more than a 6th grade education
Bill Gates dropped out of Harvard because he found his purpose and pursued it
I could go on and on. I don't wish to be financially free. I don't wish I was rich just so I can flash my sport and super cars to everyone. I am going to build a multi-billion $ empire that has influence across the globe—THAT is my desire.
I don't wish to be average. Ive maintained all As in high school, and will be, (hopefully) going to one of some of the top schools in the nation when I hear back on April 1.
Preaching to the choir about the guru stuff—18 months ago I went in with my mother on a $2,000 weekend 3 day seminar from the group Real Estate Intensive. Of course I knew nothing about them then, and they were your basic gurus.
After finding out it was a scam, just before it was too late, I left with a small fire kindled inside of me. I took about a year off of thinking about it, trying to figure my life out. But 2 months ago I came back with full intentions. Bought $200 of the best books recommended by the guests on the podcasts, signed up here, and have gone to the couple REIAs in my area.
Right now I am trying to connect with local players and to get a job/internship with them over the summer—whether it is paid or unpaid I do not care.
But to go back to your original skepticism about the RE classes taught in High School, I think it is only right to investigate more before we make assumptions. "Using kids for free" being bad simply doesn't make sense. If they are being "used" to make a profit, aren't they learning practical and applicable knowledge? Even if every penny of the profits went to the teacher, why would we have a reason to care? He would be teaching kids lessons and fundamentals ADULTS go and pay $40k for! And as Neal said, the profits would go into a college savings account. Those kids would then go on and change their family from being a "at-risk" to a "well to do". It just seems like a great idea all around, as long as it is indeed ethical and regulated.
Thank you for stating the other side, I always love a good conversation and learned a lot. See ya around :)
News Flash, we don't live in the 1900's when boys went to work at 12 or 14, or when Buffet was on a farm working and at that time it was more important to assist the family to exist, so please forget all the historical success types because they aren't in a world of technology and a world economic platform.
And, what you're trying to learn isn't real estate, it's usually deal making, sneaky, unethical, or illegal coming from the gurus! I can see you' caught on to the lingo too, "financial freedom" buzz word playing on your mind.
Go to my logo, click it, it's a free course, that is the kind of stuff you need to start with, then as you move on you'll understand investing tactics, what is ethical and not or legal or not or BS or not. Get a real estate text book for agents, it can be an older book as the basics have not changed, read it, take the tests in the book.
As to meetings with other "investors" who are more of operators than investors, what you're hearing might be good or bad, folks do things wrong for years and that is what they pass on, they never knew any better and you'll just continue the same old problem.
There are many older adults who lack maturity, many more lack business maturity, learn things right the first time and you'll mature into a more successful person.
Anyway, hope you're not too far gone in fantasy RE land, being excited is a good thing, being gullible isn't so good. Oh, and have fun while you can, but study well if you don't you could be digging foundations in 2027 instead of buying them, stuff happens! Best of luck young man :)
- Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes9y
Thank you for clearing that up. takes a load off my mind about the kids! Just watch what you get from the city, a bulldozer is often the best tool, LOL. Best of luck and keep us informed of your progress, there are many other areas that could benefit from a good model. :)
- 9yWilliam BrownPro MemberWholesaler · Los Angeles, CA · Member since 2016 · 276 posts · 181 votes
@Bill Gulley that's real talk right there. Thank you, and I'll check you out
- Investor · NH · Member since 2016 · 134 posts · 61 votes9y
"Labor Work" for kids, whether "at risk" or not is not such a bad idea in my opinion. As a former "at risk" youth, I would say that despite the Information Age we're living in, a good mix of manual labor and solid financial and real estate intelligence is a good thing to bring to children in any age-appropriate manner. I'm about 30 years too late getting to @Bill Gulley free course, but my observation is that there are many variations of ways to help kids (or grown ups) learn the power of real estate and everything associated with acquisition, building, owning, managing, etc. I don't believe real estate has to just be treated as a profession, any more than a guitarist has to learn music theory (or even how to read music instead of tabs). It seems that only the the legal items are black and white; ethical lines should also be drawn, but I see a few pessimistic conclusions in this thread and general negativity (in this community) for anything that sounds like "guru". A lot can be learned from "gurus" (sometimes hard lessons, sometimes not). Anything that can be done to teach kids PRACTICAL lessons, while not BORING them to death, will likely go a long way towards shaping their view of the world and the powers of relationship-building, risk-diversification, and financial-reward-sharing. Good luck @Neal Richardson !!
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