Are REIAs a scam?
Dallas, TX · Member since 2015 · 20 posts · 14 votes
Dear BP,
I'm attending my first REIA event today and it seems like a scam. I'm a bit skeptical when they are throwing stories of $$$ left and right. Any thoughts?
It's all what you make of it.
99% of wanna-be investors, who go to seminars, will never buy their first property. They all blame it on the various gurus not teaching enough, lying about things etc. , when it's really more convenient for them to not go outside their comfortzone.
The other 1% will learn and take kernels of knowledge from everyone they meet, gurus and other investors, and will forge forward.
Heck, I got into real estate investing after a late-night commercial by Dave Del Dotto. Yes, I absolutely credit my inspiration to a guru, that was blasted as scammer. I'm forever grateful to him.
I would think people at REIA meetings or events are either successful investors or relatively new investors looking for info/deals/money. Buying the right properties on or under budget will definitely result in $$$ left and right.
What were their stories specifically?
Yes, I went to the one by the Galleria. It was hosted by Phill Groves and his wife. I was hoping that this was an actual networking event with different real estate professionals. What I saw was more of a sales pitch for his mentoring and coaching services on how to make money in real estate.
Needless to say, I wasn't interested in this type of event so I left mid-presentation. The content that he presented is all true and they are good ideas, but IMO you can find this via BP forums and reading books.
I have yet to attend any local REIA that didn't have some sort of pitch involved. It's a pretty big turnoff.
What I have found is "REIA meetings" in Austin, Dallas, Houston, and San Antonio are mostly run by the Groves. Their main intent is to get you to buy into their Big Dog Program.
You need to find meetups. These are the networking groups you are looking for.
That being said, so far we have come across a couple of meetups we found out about from the Austin REIA. I also met a private lender I am using from the REIA. So it was not a complete waste of time. With the REIA meetings, you need to show up at least an hour after it starts so you can avoid the sales pitch.
I have found out about several Austin meetups from right here on BP. You should be able to find some in your area as well.
Meetups are great, do your diligence on gurus as much as your would anything else in real estate, but you have to remember some of these gurus are worth a lot of money and have the knowledge, training, coaching, and most importantly network and influence to help accelerate your business. so are they expensive .. yes.. could they be worth.. yes, depends on you.. your ability, and progress. but if you dont have money, then i suggest learning everything you can for free, go to local meetups and reias that dont pitch and connect with as many experienced investors as you can,
you may connect with me as well, my contact info is on my page. I do not charge for advise
I have attended Phil's Big Dog seminar (Chicago) while there was some good content there, I spent the money to network with like minded people. I will say I knew going in there they were there to sell programs. That's great for the Groves that they have achieved success at a level where they are now in the education business as well. But I have already made my money back through connections I made there.
Like stated above go to local meet ups and build your network that way first. Play cash flow meet ups are fun as well as a great way to network.
Scam is a strong word. I would however, say that most of the major events have some sort of product are service that they are trying to get you to buy. The best way to avoid feeling scammed is to attend the ones that are free and have the most people attending. There are plenty of them. You may be pitched at some point but no one is forcing you to buy anything. Just go, network and leave.
-Rich club- Every 1st saturday or the month
-Jet lending @ texans grille- 3rd wednesday of every month (they even feed you)
-Holiday inn off JFK- last night was free.
Look on meetup.com- most of the reputable and free events will be on there.
Every meeting has some kernels that can be helpful.
Keep in mind, that holding a meeting has a certain overhead, that has to get paid somehow. Renting the location. Having people check membership etc. People that prepare everything etc.
So, one way to get that paid is by having speakers.
I believe in win-win and don't begrudge the club their income from speakers. I just go to network and get something out of it.
@Justin Pillion I think you went to the group run by Bock and Chaplin right? While I haven't done transactions with them, I know many that have and EVERYONE of the people that did are still waiting to get their money back. Be cautious!
With that being said, most REIAs do have presenters that SELL you something. Most clubs get a percent of the sale. There are some that do NOT allow a sales pitch. Some that are closer to a 'meetup' but still have presentations, networking, etc. Just no gurus, no sales. Look for those groups. I found one here, and it is when I finally got serious and made real estate a priority.
To the OP, yes, usually when they toss around HUGE NUMBERS, it is a misdirection. There are rare deals where HUGE money is made. The Guru types always harp on those, as if they were the norm. They aren't. However, good solid money can be made in Real Estate, just don't think it is a get rich quick concept.
yes that couple has a group in San Antonio also. I went for a couple of meetings but found out it was a big pitch after I paid for a year membership (about $150 for the year). But that was ok. I met quite a few people and networked. That was the value for me. San Antonio has two big groups that actually have education. I am sure there are some in Dallas also.
You could always start up your own group. I did and I have about 10 to 15 people regularly that meet and talk about real estate. The real value in the groups whether large or small is getting to meet people. Some you can help and others will help you somehow. It might not be about real estate.
I met a beekeeper at my meeting who is willing to trade some local honey for some real estate advice. Life is great when people get together and help each other. I just told several people about his business and he will have several orders for honey. He will use my advice to find a deal that we will co-wholesale or he will wholesale to me.
That is a WIN-WIN.
A scam? Well, what is it walking in that you think you'll be learning and when you walk out, what did you learn?
Free is free, not much of a scam, but what did you really get for free? Ideas, maybe opinions, that's a lot like something else and everyone has them.
Did you get any meat or were you thrown a bone?
I just spent a few minutes listening to what someone calls a course on real estate investing. Actually, they took the dictionary definition and broke up each of the requirements as if they were different ways to invest. Not even correctly reading the definition was amazing to me, it requires all of the activities together until it says, and renting or selling for a profit.
Like many trying to "educate" the teacher doesn't even know what real estate is, why it's valuable or where value comes from. As if the foundation of the industry is assumed and we just jump in with myths and folklore flying right into storm without the instructor having a real education.
Making money in real estate is easy at times, without a real education it's not so easy.
When I hear someone say something like, "wow, that was great to learn from that guru", I'm laughing :)) what they are really saying is, wow, I didn't know anything about the subject but let me assure you, I'm now qualified to and can make a judgment call on the quality of the material presented. No! What you are is impressed, fired up, ready to go with the impression you learned something! You have no idea if you learned anything valuable or not. Generally, usually, in fact most often you're not learning, you're getting ideas.
Tell you what, I'll write a check for $25,000.00 to anyone who can show me a guru course that actually teaches the fundamentals, requirements and basic concepts of real estate that was published prior to this post! Don't waste your time looking, there isn't such a program. Conventional real estate schools and universities are not guru programs!
A simple example, can anyone describe 3 ways to profit from an owner having an encumbrance to title? Bet not, my bet is Phil Grove doesn't teach what encumbrances are much less how to use them to make money!
Seems everyone wants to pay big bucks to learn how to ride a unicorn, then go meet with others who claim to ride unicorns, you know, those like minded people......they are like minded all right.
We the unknowing, lead by the incompetent, attempt to accomplish the impossible with nothing but determination. While part of that is an old military slam it seems appropriate for the motto for newbie guru followers. REIA, cheer up, things could always be worse.
Come on folks, are you really willing to learn or do you just want to play big dog? :)
Isn't an encumbrance also a 'cloud on the title'?
That would be various liens, easement, water lien, demolition lien, mechanics lien, tax lien, water/sewer lien - something that title companies look for, when they do a title search.
As to gurus teaching - to me it's all about 'ideas' and not so much a 'paint-by-number' formula. I've always found myself some niches and they weren't taught by the gurus. I worked with the various ideas and filled in in-between the lines
I have yet to attend any local REIA that didn't have some sort of pitch involved. It's a pretty big turnoff.
I agree. I've attended Cincinnati REIA twice and it's a little content and a lot of hype and a lot of newbies drinking the koolaide and paying the high membership fees. No thanks.
Isn't an encumbrance also a 'cloud on the title'?
That would be various liens, easement, water lien, demolition lien, mechanics lien, tax lien, water/sewer lien - something that title companies look for, when they do a title search.
As to gurus teaching - to me it's all about 'ideas' and not so much a 'paint-by-number' formula. I've always found myself some niches and they weren't taught by the gurus. I worked with the various ideas and filled in in-between the lines
You're one of the sharp ones, any ideas on how to profit from those encumbrances?
When you know real estate, what can and can't be done, that's exactly what you do, get ideas, filter them through your BS Meter, apply appropriate tactics that are ethical and legal, be a transaction engineer and make things happen!
Really, have you seen my posts whee I say you can't paint a master piece with a paint by numbers set? LOL :)
Thank you, kind sir. I guess I fake it well. ;-)
In Atlanta, for example, city/county liens are treated the way the credit bureaus do: They fall off after 7 years. So, I've bought a number of vacant lots, that used have houses on them, that were demolished in the 90's. Owners didn't see the value in the lot, because the demo and water liens were so high, that they were fine to just get anything - because they had already given up. Well, once the title company/closing attorney puts together the final numbers for closing, they are being told that anything older than 7 years is forgiven. But sellers in Atlanta don't know about this. So, if you know this, you can offer 3K above liens (which they think are 15K) and the liens from the last 7 years might only be 4K.
You could negotiate with a seller of a property with extra road frontage to buy an easement and then buy the landlocked property behind it.
You can offer the holder of a lien a smaller cash amount to buy the lien and then force foreclosure, so that the owner pays you off.
You can make a low-ball offer on a small non-performing 2nd, that might about to be wiped out at the foreclosure of the first and then negotiate with the owner before auction and buy it ahead of time.
Buy a tax lien and wait out the waiting period and obtain the property that way.
Buy a judgment against someone, who also has a higher lien against a property and offer to take the higher lien in exchange.
Thank you, kind sir. I guess I fake it well. ;-)
In Atlanta, for example, city/county liens are treated the way the credit bureaus do: They fall off after 7 years. So, I've bought a number of vacant lots, that used have houses on them, that were demolished in the 90's. Owners didn't see the value in the lot, because the demo and water liens were so high, that they were fine to just get anything - because they had already given up. Well, once the title company/closing attorney puts together the final numbers for closing, they are being told that anything older than 7 years is forgiven. But sellers in Atlanta don't know about this. So, if you know this, you can offer 3K above liens (which they think are 15K) and the liens from the last 7 years might only be 4K.
You could negotiate with a seller of a property with extra road frontage to buy an easement and then buy the landlocked property behind it.
You can offer the holder of a lien a smaller cash amount to buy the lien and then force foreclosure, so that the buyer pays you off.
Well, I like the way you think! That's the best way to obtain an easement but not the only way, you really can't have land-locked property the courts will generally look to who caused it to be land-locked and find a cure from there. But this is rather a reverse profit or indirect profit from an encumbrance, very good. The other two are on target! Did I lose my bet? LOL
Okay, buy the lien at a discount, some might go at ten cents on the dollar, keep it active, collect later with interest. This is down the alley of tax liens.
Yes, deduct the lien from a sale price. Get rid of the lien or negotiate a lower payoff.
You can also let a tenant pay the lien/encumbrance off.
I can swap a lien I payoff for an interest in title.
Material and workmen's liens can be financed at full face value after being purchased at a discount by a clean-up contractor (one hired to complete unfinished work).
These are generally specific liens, you can work payoffs with general liens as well, an ex-spouse may accept less for a release and buy their interests.
An option is an encumbrance, buy the property subject to the option at a lower price, if the optionee buys, you sell, if not, you still win.
A deed in lieu of foreclosure can be had after the note is purchased at a discount.
You can buy the note at a discount and have the owner refinance, same with installment contracts.
Easements can be purchased, leased, traded or sold.
A lease is an encumbrance as well, they can be financed, used as collateral or sold as well by the holder.
Deed restrictions are an encumbrance, restrictive deeds can expire and a seller may not be aware if covenants expire or you can use deed restrictions as a negotiating tool and may still change the use without violating a deed restriction. Money saved is money earned.
There is more, but I think I'm (we are) off topic. You win! LOL :)
I have yet to attend any local REIA that didn't have some sort of pitch involved. It's a pretty big turnoff.
I agree. I've attended Cincinnati REIA twice and it's a little content and a lot of hype and a lot of newbies drinking the koolaide and paying the high membership fees. No thanks.
My experience with the Cincinnati REIA has been just the opposite of Stone's. I've been attending the meetings fairly regularly for the past two years and have found them to be very content rich. If you attend one of the main semi-monthly meetings when one of the national speakers comes through that portion of the meeting does have some sales with it. So what? Learn what you can for free and ignore the rest. But for the most part the meetings are lead by local investors with nothing to sell. Annual dues are less than $200. Between the main semi-monthly meetings and the various sub-groups there are probably 5-10 or so potential meetings each month that are strictly content and networking with local investors. BTW, I am not involved in the leadership of the group. Just a member who has found a lot of value in the group.
I am not sure which REIA you are planning on attending, but I have been a part of several and while most are great, some can be full of sales. I prefer to attend the "non-pitch" meetings in which I actually get to network with like-minded investors and collaborate. It's all about going and testing to see which investment group works best for you, typically you get to go to your first meeting for free. After a year of going to about 10 different groups, I narrowed it down to which few I found to be the best fit and it has made the world of a difference for me. I have learned A LOT and met so many great people. So all-in-all, I definitely suggest finding a good REIA in your area and attending as often as possible.
@Lisa Marie, I'm in your area and, in a word, the answer to your questions is yes, they are pretty much scams. I've been to bunch of these over the years, and I have found them to be virtually worthless. They are generally populated by the unscrupulous and the uneducated. They are nothing like the REIAs I hear about in other cities where investors get together and simply collaborate. I'm sure there are some good ideas/people in these but the effort of finding them is simply not worth it. Smaller, one-on-one networking will get you much further.
I should add that I haven't been attended one in a year or two, so there may be a good one out there. I'd be surprised it that's the case, though.
I have yet to attend any local REIA that didn't have some sort of pitch involved. It's a pretty big turnoff.
I agree. I've attended Cincinnati REIA twice and it's a little content and a lot of hype and a lot of newbies drinking the koolaide and paying the high membership fees. No thanks.
My experience with the Cincinnati REIA has been just the opposite of Stone's. I've been attending the meetings fairly regularly for the past two years and have found them to be very content rich. If you attend one of the main semi-monthly meetings when one of the national speakers comes through that portion of the meeting does have some sales with it. So what? Learn what you can for free and ignore the rest. But for the most part the meetings are lead by local investors with nothing to sell. Annual dues are less than $200. Between the main semi-monthly meetings and the various sub-groups there are probably 5-10 or so potential meetings each month that are strictly content and networking with local investors. BTW, I am not involved in the leadership of the group. Just a member who has found a lot of value in the group.
Welcome to BP, John!
Don't get me wrong, there have to be some good groups out there, I'd think it has more to do with the leadership and true educational goals of the group and the quality of instructors and guest speakers than what guru might show up. They can be very good social spot! :)
I have yet to attend any local REIA that didn't have some sort of pitch involved. It's a pretty big turnoff.
I agree. I've attended Cincinnati REIA twice and it's a little content and a lot of hype and a lot of newbies drinking the koolaide and paying the high membership fees. No thanks.
My experience with the Cincinnati REIA has been just the opposite of Stone's. I've been attending the meetings fairly regularly for the past two years and have found them to be very content rich. If you attend one of the main semi-monthly meetings when one of the national speakers comes through that portion of the meeting does have some sales with it. So what? Learn what you can for free and ignore the rest. But for the most part the meetings are lead by local investors with nothing to sell. Annual dues are less than $200. Between the main semi-monthly meetings and the various sub-groups there are probably 5-10 or so potential meetings each month that are strictly content and networking with local investors. BTW, I am not involved in the leadership of the group. Just a member who has found a lot of value in the group.
Welcome to BP, John!
Don't get me wrong, there have to be some good groups out there, I'd think it has more to do with the leadership and true educational goals of the group and the quality of instructors and guest speakers than what guru might show up. They can be very good social spot! :)
Definitely agree. Leadership and that the REIA is a not-for-profit organization are important.
I have yet to attend any local REIA that didn't have some sort of pitch involved. It's a pretty big turnoff.
I agree. I've attended Cincinnati REIA twice and it's a little content and a lot of hype and a lot of newbies drinking the koolaide and paying the high membership fees. No thanks.
I was a member of Cincinnati REIA for a year. It was about 50/50. Sometimes there was a pitch sometimes not. They do offer a early meeting and a main meeting. The early meeting is mostly for us new guys and the main meeting was a pitch sometimes, other times it was very informative. There is a time between meetings called " buy, sell, trade" where you could do just that. There were also sub groups like landlords, Westside, flippers. Lots of time to network. They have a vendor night were local vendors (100 or so) give discounts to memders.
Sure they try to sell some programs or have a guru come in and pitch something but it was a great place to network and learn. Cost me something like $200 for 12 months. All in all a good experience. I may join again at sometime. For me it was worth it.
It's all what you make of it.
99% of wanna-be investors, who go to seminars, will never buy their first property. They all blame it on the various gurus not teaching enough, lying about things etc. , when it's really more convenient for them to not go outside their comfortzone.
The other 1% will learn and take kernels of knowledge from everyone they meet, gurus and other investors, and will forge forward.
Heck, I got into real estate investing after a late-night commercial by Dave Del Dotto. Yes, I absolutely credit my inspiration to a guru, that was blasted as scammer. I'm forever grateful to him.