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.
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.
Ah! That explains a lot.
No, a REIA itself is not a "scam". There may be a small fee for membership or per-meeting to defray the cost of renting the venue.
Phill Groves, however, is one of the "gurus". I'm sure that's enough said.
Many REIAs do have a monthly guest speaker, usually selling their own "educational" materials. Most of them are not "gurus", just local or notable people who have achieved some success and think that qualifies them to teach (it doesn't).
David J Dachtera
"Success is not a destination. Failure is not an event. Success is a process, failure is a choice."
- DJ Benedict
Sorry REIA?
Real Estate Investors association
All of you have great summaries of what real estate investment groups are about; people who run or own them and their guests run it to better themselves by selling overpriced, overused, outdated material directed to the uneducated people who dream of being real estate entrepreneurs. They all have "cutting edge" software and "exclusive, and newly developed" systems that nobody in the whole wide world has knowledge of. They all have the same sales pitch. Does anyone catch that everything in real estate programs have values or cost of: $97, $197, $497, $2,997, etc. Lucky seven I guess. If you listen to most of their webinars, they last 1-2 hours and they could make their pitch in 15 minutes. They all have a "feel-good" story with them to make you feel like you are actually bonding with real people. I could go on forever.
I think your best bet in real estate is slowly start networking with people outside these groups. I believe someone made this point that real estate investment groups are 90 some percent of people who will never do anything and the rest are people are these gurus, unethical contractors, useless merchants that are preying on there next victim. There is some information that is useful in these groups, but it certainly is not worth the price to be a member.
@Bill Gulley You are very quick to judge, based upon very little information. Not sure how you can judge anyone's materials or business practices without actually seeing them and/or dealing with the person. This is purely my observation, but you also seem to regard yourself as being above, or better, than everyone else. It's one thing to be confident in your knowledge and abilities; it's something else entirely to be arrogant while putting everyone else down in the process.
Paying money for a course and/or coaching/mentoring is certainly not necessary for someone to be successful, nor does doing so guarantee success - as a previous commenter said, the majority of people who buy a course never do anything with it. Some people want full immersion into a strategy, and want to accelerate their business and shorten the curve. Others prefer to get their information and resources from multiple sources over a longer period of time. Neither one is wrong - everyone is different, with different circumstances and goals. I know many successful people in this business - some have invested $$ in their education, and some have not.
While it is a very short list in my opinion, there are a few good "gurus" out there who teach because they enjoy it firstly; getting paid is secondary to them. All of the people on this short list make far more money from their real estate endeavors than from speaking and teaching. When you've been around enough of the national speakers, it becomes easy to tell the difference between those who teach, and those who pitch. Those who teach generally despise being referred to as a guru in the first place. Those who teach and provide information are providing a service. There are many, many people in other service-oriented professions whose entire business models are based on selling their time and knowledge (information).
People that expect everything to be handed to them for free, with no respect for others' time? There is certainly a limit to my generosity (also, people like that tend to burn bridges quickly). I have no problem doling out advice for free when someone asks a question - I do it all the time. I enjoy helping others become successful in real estate, no matter how small a role I may play in that, especially for someone who is genuinely grateful. There is an inherent difference between people who expect, and people who appreciate.
On the flip side, there are only so many hours in a day, and when someone constantly asking for advice becomes so time consuming that it takes away from my own business activities, then I think it's quite reasonable to expect that I be compensated for my time. People who are serious about getting into real estate as more than just a hobby will gladly pay for another's time when needed - even if it means just going out for lunch/dinner/drinks and they pick up the tab while we talk shop. If someone isn't willing to pony up a few bucks for that time, well ... refer back to the previous paragraph.
Too bad most REI clubs don't adopt the model embraced by the FIBI clubs in southern California. These were formed on the basis of content and absolutely no sales are allowed at the front of the room. Not to say some speakers don't try, but they are often not invited back. I've seen some get cutoff with a semi-hostile reminder from the crowd.
Some REI clubs, such as those sponsored nationally, intend to make a profit and you should recognize this before you go. It's unfortunate that with little exception, I find most of these club owners and their speakers obnoxious. Some, like FIBI, charge a nominal entrance fee to defer the room rental and beverages. Some much more. Most clubs that charge an annual fee will also let you pay by the meeting. I've observed that the discount here is usually small. Miss a meeting or two and you're even. Memberships exist to lock you in and are not normally in your interest.
Most club organizers don't do this for the few dollars they might make at a meeting. Earned or not, there is a certain credibility standing at the front of the room and club owners get to stand in the middle of deal flow. All will tell you they do this to build their business.
This is what I do when I attend a REI club:
Never feel pressured at these meetings.
The REIA group that I am on the board is Nationally affiliated, however we are non-profit and rarely have national speakers selling product. I think its been 3 years since there was such a speaker here. Our speakers are typically local lawyers, CPAs, local businesses, local housing organizations, almost all of which are non-profit, many are government affiliates like Section 8.
2 of the four groups that I attend have no dues.
I didn't read through all these posts and decided to just answer your question based on my local REI.
Initially, they were not charging but are now charging $10 per month, discount if paid yearly, and half for someone attending with the investor. So one person attending is discounted and the other person is half. This means that two people in one household can attend and one is paying half. I actually suggested that because my household is a 2 person attending household. Well we both are getting the same information so why should both pay.
They are now charging because it pays for the speakers food (at a restaurant we meet at that does not charge for the meet up) and gas money.
I asked if I pay up for a yearly membership and I miss any of the meetings, what then. They are providing video tape only to the paid members so any missed meetings can be seen by video.
I'm not sure if this answers your question but it's my experience with my local REI that may apply to your situation.
I think it really depends on which REIA you join, I've been to some REIA meetings where half of the time they were talking about the coaching program they are trying to sell, that was a little bit too much, but REIA does provide me a great opportunity to meet with other investors and local private lenders, so there is pros and cons
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 wish our local reia was like this. It's good in that they don't have a lot of sale pitch, typical none in general meetings but ccasionally they bring in people with programs. They do a good job of screening and vetting those people out though. My only complaint, and the president is a member here so I don't want him to think I'm dogging the reia, is that the annual fee, which is around $700 now I believe, is too expensive so I don't attend it anymore.
Thank you all for this most interesting forum. Thank you @Jeff S., @Bill Gulley, and @Christina Carey especially.
I want provide another prospective of REIA clubs as a president of Northwest REIA, a non-profit REIA in Portland OR.
Our mission - to provide an arena for safe real estate investment education and a network platform for our members and the community. (Don't quote me on this as I am not pulling it from the Bylaws) however; that means my job is not only to put on these meetings, but to also protect the membership and others from the predators that come to the meetings looking for gullible investors.
A few months ago I asked a board member to assist in moving one such predator from handling the door. This unknown had come down from Seattle and was handing out his "make it reach on turnkey properties in Detroit" brochures at the door. Real estate investing is big-money business and there are ugly sharks out there!
Some REIAs protect you, like the ones associated with National REIA - as the protection priority is in all of our bylaws. The other REIs - I wouldn't be so sure of.
Best check if your REIA is a Chapter of National REIA.
Lisa I know how you feel. I went to my first real estate meetup here in NY and the whole thing was a sales pitch in which we were asked to not talk till the end. VERY frustrating because they advertised the meetup as a networking event.
It seems like one needs to look a bit deeper to find groups where people want to network and discuss/help each other and not give a sales pitch.
I think REIA's are solid though. There's a lot of people who are successful investors to network with even if there is a sales pitch.
I belonged to a REIA association for many many years, and would still belong except i moved away. You can go to these, keep your money at home. I even go to repeat events (free seminars etc) because you might learn one or two things new that can save you money or prevent you from making a huge mistake. Some people make tons of money. Many will not. As with anything else, you have to go in and decide which avenue of real estate investing you plan to get into. Too many people go in without a plan. This is another reason these REIA events are helpful. You can NETWORK, NETWORK, NETWORK. Husband and i did rehab and sell homes and would not take one on unless we were going to pocket $20K or more. That was before the market fell out. Now we have a mobile home park and are bringing new rentals homes, due to our local demographics.
I was on the board for NJREIA and we required speakers who had something to sell, also give, for free, valuable information to the group. You can learn something from almost everyone. When i relocated, i sold TONS OF materials purchased at seminars. look online... ebay... you can sometimes find the same stuff, maybe a year or two older....
Of course I love BP! But 90% of your success is local, right? How can you avoid networking with successfull folks in your own zips?
The smartest thing new folks can do is hook up with local expert(s). You may have to even pay a few.
Paying minisquel dues to a REIA is a huge value! And I poach free knowlege from all the speakers at my REIA and I am glad I've bought alot of their systems to reverse analyze and pull apart.... and assemelate into my own knowledge and system.
A smart fellow I follow said: do not learn from your own mistakes, it'll be 70 before you are successful. (IE why are so many Porsche's driven by old'sters?). Learn from the mystakes of others especially the successful who are willing to share what not to do, and what TO do.
My two cents are this. Why buy into a system when you have a wealth of information here and access to many experienced investors who are willing to share their knowledge and experiences?
Because you get what you pay for and time is money. The system of wealth is just that; a formula for you to follow and guess what? they work! IF you also put in the work and if you have the same skill set as the guru teaching/writing the course. Most systems are not customized for you which is why coaching and mentoring can be so effective.
I'll take some of Bill's money too. :) I just wrote a new ebook called "Real Estate For Introverts" because not everyone is a Tony Robbins walk on fire, millionaire mindset, crowd loving personality who thrives on those type of events. Rather, 51% of us are introverts who just want to learn how to invest and reduce our risks by learning instead of chanting affirmations in a stadium.
Check out who is behind your REIA very carefully. Is it a 501 c(6) Trade Association or is it a for profit where all the profits go into the owner's pocket. You can get quality info from both but just like buying real estate, YOU have to do your own due diligence.
@Belinda Lopez. You are talking about handholding. If someone wants to pay me 10K to handhold them through a deal, hell I'll take it. But as far as learning anything from the "guru" systems, all the information is here. Blogs, articles, forums and podcasts. You will not learn anything new from a paid system.
@Belinda Lopez. You are talking about handholding. If someone wants to pay me 10K to handhold them through a deal, hell I'll take it. But as far as learning anything from the "guru" systems, all the information is here. Blogs, articles, forums and podcasts. You will not learn anything new from a paid system.
Yes but you can waste a great deal of time wading through all the info on the internet. A well structured course can save you time and keep you focused on the content instead of wandering off to look at 'shiny things' that may or may not be relevant. I'll agree to disagree on the point that you will not learn anything new. Everyone gets something different from a particular course or internet information source; we all internalize differently.
Another thing I hear folks tell newbies is to offer to take an experienced investor to lunch or coffee. I've learned to just say "No" to all these requests for the moment. One email or phone call turns into five or ten and you simply can't run a business by spending time giving out free help once you have five or ten newbies calling and emailing you. I understand why experts charge what they do; their time is valuable. It's one thing to be nice and network but you can quickly get overrun with requests for assistance from folks who won't take the time to learn the basics from a course or internet resources.
@Belinda Lopez. I do agree with you there. "One email or phone call turns into five or ten and you simply can't run a business by spending time giving out free help once you have five or ten newbies calling and emailing you."
I think the problem is people want something for nothing. Don't get me started on this generation. I have offered to mentor someone in return for then to bird dog for me. I also included a financial stake int he end deal if I closed. No reply. Crazy.
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? :)
Bill, I'll take your $25,000. I teach one and it is less than $500. Comes with a money back guarantee and less than 5 percent have ever asked for a refund. I'm happy to give you access to it so you can see the fundamantals taught.
As always i have learned quite a bit from the discussion about REIA.
Thanks to all at BP!
Didn't read the entire thread, but I want to give a thumbs up to my local REIA. The Metro East Real Estate Association (St. Louis) has been an extremely valuable and useful association. They occasionally have someone in to pitch their product or program, but the content delivered by these folks is still quite good.
Most of the time, it's fellow members getting up to share on a topic. Here's some of what we've covered in the last year, almost none of which were a pitch for products:
This is mostly a landlord association. I rarely hear about flipping or creative marketing.
They also have an ask-the-expert segment before every meeting. These usually have more selling involved, but you still get stuff out of them.
They also have a sub-chapter for one of the local towns specifically geared toward landlords. I've only been to one of them, but they had the director for the Lead Abatement program in Madison County present to us. Next month they are discussing landlord mistakes to avoid.
My point is I found a good one. If it hadn't worked for me, I would have left to never return and probably started my own.
There are a lot of scams out there, but REIA's are not one of them. You will find regional ones, statewide ones, and national ones. They are all connected. They are essentially trade associations.
@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.
You're correct @Dale Stevens I have heard the same thing.
I won't go to an REIA where there are any dues. I've gone to meetups a couple of times, it's nice to meet like-minded people and learn about how many different ways folks get involved in REI, but the Associations for me aren't so valuable. I looked at the website of our local REIA and to me it really had the feel of an info-mercial, so I've stayed away. Of course, not all are like this. More my speed- a couple of informal meetups per year. Good enough for me.
I'm a member of the association in my field at work, I go to their annual meetings (but not every year). There's just ONE association for the nation. In-person meetings for the work association and the REIAs have excellent value for beginners. And if you want to be a leader you really need to go and network.
My work association has valuable information on its website, like BP has wonderful information here. That's enough for me.