Taking a stand after a $50,000 lie

88 Replies

I've never named a figure on how much $$ we spent on what people call 'GURU training' but I think it's time. The amount of money that is being made by these companies is mind blowing. 

I've read posts by others on BiggerPockets who have invested in this training and many are quick to judge them saying 'who signs a contract without reading the whole thing?' or 'weren't you suspicious of a, b & c?', etc. The answer is no. No we weren't suspicious because people who you think would have a lot to lose stand behind these companies. Pete and Dave from Flipping Boston, Tarek and Christina from Flip or Flop, Doug Hopkins and Damon Lines from Property Wars, Greg Herlean and Mike Baird from Flip Men. They all endorse this same company/program by Premium Financial Training, Success Path, Advanced Real Estate Training (these companies are all linked).

You think that it's not too good to be true because you are paying a large amount of money and that's the catch. The reason not everyone is doing it is because they can't afford it, right? Wrong.

Here's how they do it...

* They have people speak that know Donald Trump and show pictures of them shaking The Donald's hand or speaking at the same event. They'll tell you about all of their successful students and how the same guy that knows Donald Trump is tight with many of the students. He tells stories of the student's successes and how he's had many personal conversations with them.

* They say they'll send you to a bootcamp where an expert will take you to properties and go through from start to finish how to make money on it right.

* They tell you that you'll have a mentor that you will be very close too and they'll even come and spend 3 days to work personally with you.

* They mention you can network with other students and use their connections so that don't have to go through the work and expensive lessons learned to find your own Power Team. 

* You'll have everyone's email (including Dave and Pete) that are speaking at the conference to contact at anytime.

* They'll tell you that you can get all your money back if you aren't successful by giving you a money back guarantee that when you read the fine print is next to impossible to claim.  

I could go on but I won't bore you. It's a good strategy, I'm not gonna lie. Nice work to whoever thought of it. The only problem is that what they promise is not what they deliver. 

Here's what you actually get...

* At the bootcamp you get a teacher from another market who will give you advice on how to flip homes in Austin Texas even though you are sitting in Boston. She gives you reference sheets with pricing that is super low (not accurate) for building materials to use when calculating rehab costs. You learn that Hard Money is basically free up front and easy to get. Just pay the points at the end...no big deal. If they ask to check your credit or require that you give them money up front then walk away. What??? They take you to properties where the teacher stands there and talks only when asked a question. Basically if you or anyone else in the class doesn't ask the teacher the right question you don't get the information. 

* The 'mentor' you were supposed to have only exists for the 3 day period that they come and spend personal time with you. You don't get Dave and Pete's email and when you try and email others you don't get a response. I attempted to email the bootcamp teacher when I couldn't find ANY hard money lender that would let us pay points at the end and obviously got no response.

* They call you asking for another $25,000 to have an actual full time mentor that will work closely with you for a whole year! When you tell them you've been mislead on some things so far they apologize like crazy and give you the package for 1/2 price acting like they are very concerned.

* The new mentor does call you once a week for a 1/2 hour but is sitting in Salt Lake City and has no idea about Massachusetts laws or processes. He gives you advice but it's advice that only works in the world they made up where everything is easy. After a few weeks the mentor just quits calling. You were told you'd also have weekly calls with a group of people and this mentor. This also has not happened.

* You ask Pete and Dave at a seminar in Vegas if they will wholesale to their own students and they stumble and say they'll think about it. Basically even though you've paid thousands thinking these guys stand behind all of this education, they want nothing to do with you.

After all of this...you still have to do everything you would have done if you never went to their bootcamp. You still learn expensive lessons and find that nothing is as cheap and easy as they claim it is and you are now have $50,000 less to work with. I won't go into more detail...this post is long enough already.

So, the purpose of this post...instead of criticizing those that have fallen for this 'super obvious scam'...as some members imply, I'd like to use this huge network to actually do something about this. Lets save people 10's of thousands and stop the company from making millions. We're in for over $50,000. Yep...that's right, I didn't add an extra zero. It's very hard to go after these companies as an individual so it's best to use the power of numbers. Please PM me if you've also spent thousands and would like to get it back or know someone who has.

My #1 goal isn't to get my money back (although it would be nice) or slander anyone's name but to stop others from being lied too and stop these people from getting richer every day by giving people a line of BS. 

The wife and I went a "free training" event here under the Tarek and Christina name about a year ago here in Austin. Of course Tarek and Christina conveniently couldn't make it so they had some very close friends fill in for them. The "free training" was a sales pitch for a $1,000 training where you would learn more. There was almost no information and no training. My wife and I quickly caught on and remembered the 20/20 episode where they investigated that Rich Dad Poor Dad training that was eerily similar to the way this was set up. 

The gimmick is to get you to pay $1,000 for the first training, and that training turns into a sales pitch for $20,000 training and so on. It's amazing how many people jumped out of their seats to pay for it. Out of the 100 or so people, I'd say about 30 folks paid for. Not a bad hourly rate considering it was a 2 hour training and hosting I believe 4 events over 2 weekends. 

@Erica Nagle

Erica,

     This sounds like a terrible experience. Hopefully, you will get back out there and get involved and make that money back ASAP. Best of luck to you! I hope there is a silver lining to your Guru Experience

Typically these guys come and go, when the markets get good they show up, when they crash they go away. Their is always a new guru who gets themselves a TV show, some slick marketing material and is the new thing. 

Generally when taking RE advice ask yourself how the person giving it makes their money. Do they make it selling CD's, classes, and boot camps? Or do they make it doing deals. Most of the guys doing deals are to busy for this and have little interest in it.

The reason most people never really go anywhere in real estate is because its actually a very hard way to make a living. Very few people are willing to invest the time and effort to properly learn an area of it. I can understand how its easy to get sucked into stuff like that, they offer to make the hard bits easy. But at the end of the day these "mentors", don't know your area. They have zero knowledge the local players, city officials, etc that all have a massive impact on any RE business. So as a result their usefulness is marginal at best. 

@Erica Nagle There was someone else here on BP who also got taken for a lot of money from these "gurus".  Im not sure how much time elapsed......but they were able to recover a good portion of the money.  I wish I could remember who it was, but if you search through the threads hopefully you can find her, contact her and see what she did to get some of her money back.

Thanks for sharing, I'm sure your post will help someone save a pile of cash.  I cringe every time I see a new post about a guru hoping that the person making the post comes to their senses before handing over a penny.

I've made much bigger financial mistakes than this (10x!) giving my trust to someone that doesn't deserve it, you're not alone!

My wife and I went to one of those free introductory classes, and then chose to pay for extended training. Yes, it was expensive. But most importantly, after spending all that money there was NO WAY we were not going to take action! Soon after we found a deal and bought our first property.

There are definitely things I'd do different. Often the price you pay is for a bundle and some of it you won't use. For instance, there was some software that was next to worthless for us (didn't run well on my Macbook.) And there was a hotline that we barely used. You should absolutely know what you are paying for itemized out. If you don't think it's for you, have them take it out. If they don't work with you on the cost then you walk.

The best part was was the mentor from our state that came and spent time with us. We really learned a lot in a short amount of time. But if I had to give someone else advice, I would tell them to find someone locally that does what you want to do. And then pay THEM for the education. Likely it will be less expensive and you can build a lasting relationship.

so the real question is what did you learn about rei

@Joe Villeneuve

What did we learn about REI? Trust no one until they prove they are trustworthy.

Hi Erica,  Thank you so much for sharing this.  I've been to many of these Free-A-Thons where the real information you receive is where to sign the credit card receipt.  Fortunately, my cheap skate nature and my lack of money precluded my further "training."  I hope that many here see your post.  There are some great "guru's" out there.  Generally they are the ones who do our work every day.  Many times they share their knowledge just because they are passionate about what they do and are nice people.  I recognize the help my "guru"/mentor has given me and try to send him some cash or recommend his book -- it is one of the BP's top books on landlording.  

We all have our lessons to learn, one of mine involved an oil spill -- talk to me about environmental clean up  : (    Again, thank you for naming names so that folks can steer clear from these programs and listen closely when other "gurus" make similar promises.  

Best, Teresa

@Tony Link

You are correct and their are things that can be learned from the Guru's. However when things turn out to be flat out not true about what they teach you it's frustrating. 

We also took action right away like you and your wife because no way were we going to let that go to waste. However we continue to find things that aren't as they were supposed to be. 

This isn't to place blame, I'm 100% accountable for my decisions. However you don't know what you don't now and I don't think it's right to take advantage of people's lack of knowledge. 

Again please PM me if you have also spent lots of money and don't feel you got what was promised. Thanks!

I forgot to mention that someone asked about BiggerPockets at our bootcamp and the teacher said she "didn't see value in being a part of it. She's never gotten anything good from it". Ha!

It official. Labor Day week should be 'scam awareness week'! Shady gurus? Had that! Wholesaler taking the EMD and running? Got it. Turnkey provider fudging numbers and conducting overall shady activity? You bet!

Here's my take away.  Shortcuts cost.  Looking for the easy way is sometimes just the easy way to be taken. Nothing worthwhile is achieved without effort.  Educate yourself.  Do your own due diligence.  Trust but verify. Locate a potential deal and bring it to a local ethical pro to help you.  Get an opportunity and a mentor will appear!  Make sure they are legit and not going to take you as well.

@Erica Nagle - thank you for sharing and I am sorry to learn of your experience. Did you learn anything REI related in buying all of this? Trusting no one until they prove themselves is a life lesson. Nothing specific? Extra sad. Thanks!

You will notice also that the ones that tend to defend it here on BP usually have a link in their signature to some sort of coaching or system that they themselves sell, no need to say more.

There is definitely value in coaching, I've used business coaches in the past and I'm a paid coach for high level athletes.  However, there is no way that any of these guru's are providing 50k worth of coaching, maybe 5k.

I have a story about an experience with a well known person here on BP recently, would be happy to share via PM if interested.

Originally posted by @Russell Brazil :

@Erica Juhl There was someone else here on BP who also got taken for a lot of money from these "gurus".  Im not sure how much time elapsed......but they were able to recover a good portion of the money.  I wish I could remember who it was, but if you search through the threads hopefully you can find her, contact her and see what she did to get some of her money back.

I think this is the post you're referring to: http://www.biggerpockets.com/forums/79/topics/185362-please-help-41-000-paid-to-a-guru-company-to-be-refunded

@Kyle J.

@Russell Brazil

I reached out to her via private message prior to posting this. I haven't heard back yet but I'm sure I will!

Originally posted by @Erica Nagle :

@Joe Villeneuve

What did we learn about REI? Trust no one until they prove they are trustworthy.

 That's not what I meant.  Actual Real Estate Investing...did you learn anything that you didn't learn before you took the training?

Originally posted by @Steve Vaughan :

It official. Labor Day week should be 'scam awareness week'! Shady gurus? Had that! Wholesaler taking the EMD and running? Got it. Turnkey provider fudging numbers and conducting overall shady activity? You bet!

Here's my take away.  Shortcuts cost.  Looking for the easy way is sometimes just the easy way to be taken. Nothing worthwhile is achieved without effort.  Educate yourself.  Do your own due diligence.  Trust but verify. Locate a potential deal and bring it to a local ethical pro to help you.  Get an opportunity and a mentor will appear!  Make sure they are legit and not going to take you as well.

@Erica Nagle - thank you for sharing and I am sorry to learn of your experience. Did you learn anything REI related in buying all of this? Trusting no one until they prove themselves is a life lesson. Nothing specific? Extra sad. Thanks!

 Thanks Steve.  You elaborated on my basic question of "did you learn anything about actual real estate investing"?

Originally posted by @Erica Nagle

What did we learn about REI? Trust no one until they prove they are trustworthy.

Erica, I think as you meet people locally, you will find that people who are trustworthy don't have to prove to you that they are so.  As you get to know them, you will make your own determinations.  And ask around.  Other people know the good ones and the bad apples, and will frequently tell you who is who.  Or if they won't come out and say it, they will give you enough information to read between the lines.

You will also read posts here on BP and form your own opinions about people.  The more you read, the more clear it becomes. 

Google everyone, and then if something comes to light that is negative, ask them about it if it matters to you.

I realize I'm not someone who has been taken by bunches of gurus and so can't stand with you. In fact, I founded a REIA and used to benefit from the gurus, until I'd had enough of the BS.

But honestly, when this happens, I recommend acknowledging your own role in the situation (which you have done), posting as clearly as possible so others can do their own research and benefit from your mistakes (which you have done) and moving forward in a positive direction toward your own goals.  Focusing on the negativity and con artists will keep you bogged down in a mud puddle.  Regroup, define your path forward, and go and meet some non-guru people who are happy to network with you and count you as a trusted business associate.  

I'm a long-time real estate investor and a friend of mine regularly asks me about strategies for him to get in on this market. He recently attended a Tarek and Christina event and was debating about whether to get in deeper with their program. I repeated what I've always told him: Check out the market, buy a crappy property in a good neighborhood, fix it up and sell it. He already has a HELOC on his own house so has the starting capital, which is how I did it at the beginning. There is no magic that people like Tarek and Christina know and are generously wanting to share with us. Get to know the market, learn everything you can about improving a property and how much it can cost, and just go from there. I do all my own work as I'm not otherwise employed but even if you can't or don't want to quit your job, it's possible to find a good team to do the work for you; most importantly, you need to know everything there is about the projects they will be doing for you so you can price out the rehab and don't get ripped off.

Originally posted by @Erica Nagle :

I forgot to mention that someone asked about BiggerPockets at our bootcamp and the teacher said she "didn't see value in being a part of it. She's never gotten anything good from it". Ha!

 That's pretty funny. I have many years of experience in rei and just discovered BP and already I've read all kinds of helpful information. But what else were they going to say, right? BP rocks!

@Ann Bellamy thank you for your input, I complete agree with your advice. We have moved on and met some great people! We have a hard money lender, realtor and other contractors that are great. We are also closing on a house hopefully this week (next week at the latest) so we are definitely moving forward!

This is more about stopping the sham. There are times when taking the high road is the best option but when people are getting rich off of other's lack of knowledge it's not acceptable (to me) to stand by and not at least try and do something. 

Don't get me wrong, some people are successful applying the learnings they got from a guru. That is awesome for them! But I guarantee if you look at the trends you'll see these instances occur in silos of specific markets where what they teach you actually applies. The amount of money they make on the people where the teachings don't apply is the sham. 

I've gotten a couple of questions asking what I learned about REI from the trainings. Yes we learned some things that were valuable but these learnings occurred in the initial seminar that cost $2500ish (I can't remember the specific number). We should have stopped there. It was worth it to attend that first 3 day event, we learned about writing contracts, making sure you get specifics in writing from contractors, how to get the most out of your property management company, how small banks can be your friend and how to build relationships with them. There is more but my gripe is that they taught us things and promised much more if we spent the additional money but that is where the delivery failed.

It is interesting watching the responses to this. Many (I'd actually wager that most) of the people that spend this money don't know about BiggerPockets, they don't know there is a network of people that do want to help and are great resources. This means they aren't on BiggerPockets to say 'yes this happened to me too!'

So therein lies the problem...lack of knowledge and how do you reach these people to warn them? You can't, but you can try and stop the companies from making false promises. 

@Erica Juhl

I am sorry that you had to go through such an experience. Nothing is worse than being scammed out of money. 

Do you intend on investing in real estate still, or has this experience left a bad taste in your mouth?

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