The Four-Stage Pattern Behind Fake Authority

The Four-Stage Pattern Behind Fake Authority

Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes

After years of watching people build followings in this space, I've noticed a pattern that repeats so consistently I think it's worth naming.

When someone has a real product, real deals, a real track record, they lead with that. It's the easiest thing to sell because it's true.

But when the product isn't really there, you start seeing a predictable fallback sequence:

1. No product? Sell an idea. Almost always dressed up as "you can do this with no money down." No capital, no credit, no experience needed. That sounds like it's removing a barrier, but it's actually removing the one filter that would otherwise weed out an audience, because a pitch that works with zero capital and zero credit is a pitch that's designed to work on anyone.

2. Idea doesn't hold up? Push a lifestyle. Cars, trips, the visual of success standing in for the substance of it.

3. Lifestyle isn't sustainable? Shift to a message. Motivation, positivity, inspiration content. Vague enough that it never has to connect back to an actual result.

4. No message left? Fall back on values. Family, faith, tradition. This is the hardest layer to push back on, because it starts to feel like you're attacking someone's beliefs rather than their business claims. That's exactly why it's an effective last line of defense.

The test that cuts through all four stages is the same: ask for the actual deal. The purchase price, the real return, the closing statement. Someone operating from any of these fallback layers will redirect back to the story almost every time instead of answering with specifics. And if the hook was "no money down," ask the follow-up: if this genuinely works with none of your own capital, why isn't the person teaching it just doing it themselves at scale instead of selling you the how-to?

What other fallback tactics have you run into that don't fit neatly into these four stages?

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
3w

for anyone who has been to the come to a free meeting to learn HOWTO the speaker will always start with pictures of his kiddos and wife and state this is HIS WHY and that starts the process.. this was all developed in the MLM Pitch of the 60s Amway and the like. So then you have fulfillment companies mainly out of Utah that are hired to run these Guru's back ends and marketing its all the same presentation. The why then the HOW are the Hook and then hand over the money and we will teach you how to actually do it..

See this reply in the discussion

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  • V.G JasonPro Member
    Investor · Member since 2022 · 3k+ posts · 3k+ votes
    3w

    So basically the standard lifecycle of every "guru" pipeline once the smoke clears.

    The 5th one is the manufactured enemy-- Wall Street, "capitalists", or some other big bad enemy.

  • Stuart UdisPro Member
    Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
    3w

    I believe the bigger indictment is of the general public, which accepts this garbage as fact without asking the most basic questions: How? Why? Any sensible person who asks those questions or spends a few minutes investigating should be able to identify the many falsehoods behind these gurus claims.

    What I’m currently observing is how quickly these gurus change the offering, story, strategy they’re selling. They don’t even bother deleting their older social media content.

    • Chris SeveneyBusiness Member
      Moderator
      OP
      Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
      3w

      exactly, they continue to change the story until it becomes to stage 4 when they throw in values, and for a newbie there is no way they are going to question someones values.

      Its like when you were young and in school, you were always taught to trust your teacher etc. and you would trust them and not question them because you thought they were correct...

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    • Don KonipolBusiness Member
      Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
      2w
      Quote from @Stuart Udis:

      I believe the bigger indictment is of the general public, which accepts this garbage as fact without asking the most basic questions: How? Why? Any sensible person who asks those questions or spends a few minutes investigating should be able to identify the many falsehoods behind these gurus claims.

      What I’m currently observing is how quickly these gurus change the offering, story, strategy they’re selling. They don’t even bother deleting their older social media content.

      The indictment isn’t the general public, it’s an educational system designed to brain wash with leftist ideas rather than provide necessary and useful information for everyday monetary success. 
      Private Mortgage Financing Partners, LLC
    • MD/DC · Member since 2024 · 1k+ posts · 1k+ votes
      2w

      People making money off teaching are suspicious to me especially when there is a theatrical flavor. As with most scams they are designed around human greed and laziness. Never once did I hear that I could expect to live in dumps for 25 years while working 50-60 hours a week at my day job to reach FI at 55yo.

  • Technology · Dallas, TX · Member since 2022 · 455 posts · 289 votes
    3w

    It’s easier than ever to mint fauxthority with AI. As a moderator, you have enormous sway. Are there things we can do, technology and feature-wise, that can combat this? The forums need to evolve if we’re going keep this a place that people want to connect and learn.

    BiggerPockets
    • Chris SeveneyBusiness Member
      Moderator
      OP
      Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
      3w

      I want people to understand moderators are not paid or employees of BP. We are here to make sure people follow the rules but we do not say who can and cannot post to BP. We are investors just like everyone else.

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  • Investor · Pacific Northwest · Member since 2026 · 538 posts · 300 votes
    3w

    You’re making a fair point, but you’re stopping one step short of your own standard.

    If the problem is fake authority, vague expertise, or people selling confidence they haven’t earned, then name the claim, show the receipts, and test it against reality.

    Otherwise this becomes the same thing you’re criticizing: broad language, no identifiable example, and no way for anyone reading to verify whether the criticism is actually deserved.

    “Ask for the real deal” is good advice.

    So give us the real deal.

    • Chris SeveneyBusiness Member
      Moderator
      OP
      Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
      3w

      Fair challenge, but I think you're asking for the wrong thing.

      Two points. First, a lot of people who fall for these pitches don't want to hear it's on them. They want someone else to blame when it goes wrong, and "call out specific bad actors" quietly shifts the responsibility from the person who didn't do diligence to the person who warned them. That's not what this post was for.

      Second, I don't run in those circles. I'm not going to sit here and name every person selling a fake mortgage note course who may have stolen $2M from investors, or a no money down flip strategy that you can learn overnight, because I don't spend my time in that world. That would be like asking someone who's traveled a lot to name every scammer working a tourist strip. You don't need a name to know "be careful with the guy pushing cheap fancy jewelry" is useful advice.

      This was pattern recognition for people on BiggerPockets who keep running into this and don't know what to call it. If you want a specific target, you're welcome to bring one and I'll gladly break it down deal by deal

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  • Stuart UdisPro Member
    Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
    3w

    @Michael Eskenasy It is difficult to keep track because it feels like a game of whack-a-mole with seemingly new gurus surfacing weekly. Making matters worse, these gurus create and legitimize new gurus who then spread the same garbage through scripted segments of what appear to be podcasts or interviews that are turned into social media posts.

    Dutch Mendenhall is one example whose name will be familiar to many people in these forums. He sold real estate education in addition to operating his investment company. He aligned his brand with conservative political personalities and incorporated faith and Christian values into his marketing. If you review the SEC complaint,it even points to using Christian values and patriotism to gain investors’ trust.

    @Aaron Breckenridge Don't you believe BiggerPockets has a responsibility too? Why exclusively put the burden on the moderators. I would say Pace Morby is a fairly controversial real estate personality pushing subto financing onto people who clearly were not financially qualified. I believe some the Morby minions who used to post in the forums proves that. The last three pieces of Pace Morby content that appeared on my social media feeds were a clip of Pace with Karlton Dennis explaining how he bought $4 million worth of computer equipment by financing 95% of the purchase price, leased it to a data center and then wrote off the full $4 million. 

    The next showed him outside a former Pizza Hut being converted into a Chipotle, explaining how he made more money on the deal than two average household incomes in the US.....whatever that means and without finding it, lending his own money or owning the real estate. All very vague, but you could sign up to learn the process. 

    The most recent was advertising training on how to buy a cash-flowing businesses with zero money down. Last I checked he's an upcoming speaker at the BPCON. Don't you believe everything in his videos should be verified before you allow him to speak in front of hard working paying BPCON customers? 

    It's been proven that BiggerPockets as a platform provides credibility and there's been some bad outcomes as a result which is why I find your comments placing the burden on the message boards and moderators questionable. Why can't BiggerPockets take the initiative and verify?

    • Investor · Pacific Northwest · Member since 2026 · 538 posts · 300 votes
      3w

      @Stuart Udis I think that’s the stronger version of the problem.

      The issue isn’t just that people fail to due diligence. It’s that credibility can be manufactured upstream.

      If someone appears on respected podcasts, gets repeated by other investors, is featured by recognizable platforms, and accumulates enough social proof, then the average person isn’t evaluating one claim anymore. They’re evaluating an entire credibility stack.

      That doesn’t eliminate personal responsibility, but it does mean platforms and communities have some responsibility for what they repeatedly legitimize.

      Teaching people to recognize the pattern is useful. The harder question is what happens when the ecosystem itself is helping manufacture the pattern.

  • Investor · Pacific Northwest · Member since 2026 · 538 posts · 300 votes
    3w
    Fair point. Here’s a concrete example of the pattern. If someone is selling a “no money down flip” system, ask them to walk one real deal all the way through: Purchase price, financing structure, cash actually brought in, rehab budget vs. actuals, carrying costs, timeline, closing costs on both ends, resale concessions, taxes, insurance, and final net profit after everything. Not the story. Not the headline. The full stack. The reason this matters is that fake authority usually lives in the gap between a catchy outcome and a fully accountable breakdown. The people with real reps can do that math cleanly. The ones selling vibes usually pivot to mindset, testimonials, or “you’re missing the point.” That’s the pattern I’m talking about. Not blame-shifting — just a simple way to separate performance from packaging.
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    3w

    for anyone who has been to the come to a free meeting to learn HOWTO the speaker will always start with pictures of his kiddos and wife and state this is HIS WHY and that starts the process.. this was all developed in the MLM Pitch of the 60s Amway and the like. So then you have fulfillment companies mainly out of Utah that are hired to run these Guru's back ends and marketing its all the same presentation. The why then the HOW are the Hook and then hand over the money and we will teach you how to actually do it..

    • Chris SeveneyBusiness Member
      Moderator
      OP
      Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
      3w

      @Jay Hinrichs and they have a credit card machine in the back of the room giving you a "must sign up today" offer as well

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    • Jay HinrichsBusiness Member
      Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
      3w

      I was at a meeting in Provo offices of Nudge Zurix who got in massive trouble.. they wanted to me fund Detroit deals for their buyers but their expectations and profit margins meant the buyers were going to get totally fubared and I passed they were also doing this in Lehigh acres ( fort Meyers) with the million platted lots there.. buy them for 5k sell to students for 30k type of thing.

      Anyway it was a pass for me.. But while I was there another vendor was pitching unsecured loans to pay for the students 50k program.

    • Don KonipolBusiness Member
      Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
      2w
      Quote from @Jay Hinrichs:

      I was at a meeting in Provo offices of Nudge Zurix who got in massive trouble.. they wanted to me fund Detroit deals for their buyers but their expectations and profit margins meant the buyers were going to get totally fubared and I passed they were also doing this in Lehigh acres ( fort Meyers) with the million platted lots there.. buy them for 5k sell to students for 30k type of thing.

      Anyway it was a pass for me.. But while I was there another vendor was pitching unsecured loans to pay for the students 50k program.

      Why are the all the companies “swindling” someone operating out of either Las Vegas, Nevada or Provo, Utah? 
      Private Mortgage Financing Partners, LLC
    • Jay HinrichsBusiness Member
      Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
      2w

      from what I understood in Utah call centers the folks manning them have gone on their missions and are used to cold calling and are very good at it.

  • Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    3w

    Spot on. Especially the Faith thing. I've never seen one of those people who advertise that they are "Christian Business Owners" be anything but other than snake oil salesman. It was one of the 1st red flags I noticed about Brandon Turner. Once he started pushing his Religion I could tell folks where gonna get burned.

    • Jay HinrichsBusiness Member
      Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
      2w

      Ya its a tough one the religion angle. I tend to agree when you walk into an office and the person your meeting with has their Bible front and center on their desk I think religion is personal and should stay that way..

      when I had to go to jackson MS in the bad ole GFC days I had a few meetings at the big baptist churchs' trying to sell my OREO.. And the lead pastor and wife both had Mercedes with matching plates in the parking lot.. the Mrs. had 100k or more of jewelry on and Pastor has his solid gold Rolex.. Etc etc.

  • Don KonipolBusiness Member
    Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
    2w

    In the field of “I want to be able to quit my job and be a full time real estate investor with enough PASSIVE income so I never have to work again” this faux credentials/authority/back story adoption of the “AMWAY” MLM model has been going on since 1977.  It’s gotten more sophisticated, much higher priced, and much more profitable and dangerous through technology. 

    In 1959, William Nickerson published “ How I Turned $1,000 into a Million in Real Estate in My Spare Time”.  Despite the name it was and remains a great book outlining exactly how to successfully invest in residential real estate as a small investor and grow an estate over a 20 year + period of time.  And it was the start for every small investor I met for a period of time. 

    Robert Allen read the book, did a couple of deals in Utah, and decided to “up the ante” by claiming to be able to purchase real estate both under market price and for “Nothing Down” which became the name of his book, his course, and his system.  Albert Lowry saw the success Allen had and wrote his own book which quite frankly didn’t do very well (initially) probably because it didn’t make any exaggerated claims or promises.  So Lowry decided that he would convince Nickerson to partner with him (which Nickerson did) and Lowry’s book was sold as a package with Nickerson’s as well as stand alone, with big sales volume for each.  Since Nickerson was well into his 70’s by then Lowry did all the introductory seminars, workshops, mentoring, etc with Nickerson just lending his name.  About 4 or 5 other “gurus” began to appear at this time (1981) using the late night informercial format and selling “books and tapes”.  Lowry apparently decided to abandon honesty and joined the “rush to the bottom” revising his “system” to include dubious operating methodology, patently false claims of results, and publishing a revised edition of his book which simply incorporated Robert Allen’s published strategies.  Nickerson spent a lot of money and time eventually succeeding in untangling himself from “Al” Lowry. 

    Private Mortgage Financing Partners, LLC
    • Jay HinrichsBusiness Member
      Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
      2w

      Dont forget Dave Del Dotto on the beach in Honolulu with Bikini clad babes.. He ended up being a vintner in Napa valley and one of his wineries was a stones throw from my house.. I sat with him a few times drinking some nice cab while he regaled me on his business. He was one of the very first to do late night commercials and he though he could have owned that niche.. well he made bank and as we know it takes bank to own Wineries in Napa Valley.

  • Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
    2w

    @Chris Seveney while I agree I also can never fully blame the "gurus". I tend to think most are pretty bad at what they do, but I also don't think they know it. It is a niavete issue more than malintent. And from there, it is everything we have talked about on these forums: they are better marketers than they are operators.

    These guys are no different then AI in many ways. "You" need a level of underlying knowledge to begin to understand if what they are feeding you is BS or not. If you fall for the images that come across social media and trust that because they are pictured in a ferrari that it is theirs and they earned it through prudent investing, or that believing in the same god as you makes them trustworthy, then "you" are the same person that likely believes that if AI gives you an answer, it has to be right or because there was a facebook post shared by 2,000 people that whatever that post said must be true.


    I am just so exhausted by it all that I have little empathy left. If you invest with someone because they host a podcast, good for you. If you pay $50k to join a group of other people whose only real criteria to be there is they also paid $50k, good for you. Feel free to share about how it was a terrible investment or a good investment, but don't come crying to me.

    In fact a year ago, there was a guy on these forums asking about investing in a group that was also posting on these forums. I volunteered to look at the offering and share feedback. He emailed me, I did my little bit of DD (seemingly class C assets, young guys with very little experience, a few numbers that seemed off but a market I didn't know well and disclosed) , and when I sent my comments/questions, the LPs investor basically said, "I met this guy in person and he was really nice, so I am going to invest". Again, hope the investment goes well, but especially if it doesn't, don't come crying back on these forums how you lost $50k.

    • Don KonipolBusiness Member
      Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
      2w
      Quote from @Evan Polaski:

      @Chris Seveney while I agree I also can never fully blame the "gurus". I tend to think most are pretty bad at what they do, but I also don't think they know it. It is a niavete issue more than malintent. And from there, it is everything we have talked about on these forums: they are better marketers than they are operators.

      These guys are no different then AI in many ways. "You" need a level of underlying knowledge to begin to understand if what they are feeding you is BS or not. If you fall for the images that come across social media and trust that because they are pictured in a ferrari that it is theirs and they earned it through prudent investing, or that believing in the same god as you makes them trustworthy, then "you" are the same person that likely believes that if AI gives you an answer, it has to be right or because there was a facebook post shared by 2,000 people that whatever that post said must be true.


      I am just so exhausted by it all that I have little empathy left. If you invest with someone because they host a podcast, good for you. If you pay $50k to join a group of other people whose only real criteria to be there is they also paid $50k, good for you. Feel free to share about how it was a terrible investment or a good investment, but don't come crying to me.

      In fact a year ago, there was a guy on these forums asking about investing in a group that was also posting on these forums. I volunteered to look at the offering and share feedback. He emailed me, I did my little bit of DD (seemingly class C assets, young guys with very little experience, a few numbers that seemed off but a market I didn't know well and disclosed) , and when I sent my comments/questions, the LPs investor basically said, "I met this guy in person and he was really nice, so I am going to invest". Again, hope the investment goes well, but especially if it doesn't, don't come crying back on these forums how you lost $50k.

      The thing I find so amazing is that people with absolutely no experience, knowledge or provable ability in investing, finance and business, believe they could be successful investing if only they find the “right” strategy, formula, or mentor.  

      Once those people learn the “talk”, make a couple of deals that either turn out “lucky” or more likely haven’t cratered YET, they’re apparently qualified to market themselves as experts.  
      Private Mortgage Financing Partners, LLC
  • Real Estate Investor · Memphis, TN · Member since 2016 · 404 posts · 131 votes
    2w

    @Chris Seveney

    I would agree in a way. Its like every single "investor" that has made some money in Real Estate Starts recording the "Grass Roots Movement" At this point I think its legitimately an attempt to "Pay it Forward" with content that helps people get started.

    The part where I notice that the "Guru Bug" has infiltrated a new host. The Programming changes to "Getting a newbie their first deal". Thats the first step to being a guru. If someone with a YouTube Channel, Instagram and or TikTok and whatever else these days hops on the Alex Hormozi train the has a Skool Community. Then Operation become a Guru is in full effect.

    This is the point where the cycle you point out begins. I will say if someone has a skool group they may not be looking to to 100 million in revenue. But to the ones that haven't figured out the actual market, product, system or the industry that they are recruiting for, This is were it becomes obvious. "How to get started" is the Guru Call sign. Operators that stay here are probably legit players, if they ever move from How to get Started to "some ideal" then the process starts of them being path you point out.

  • Attorney · 10451 Mill Run Cir #755 Owings Mills, MD 21117 · Member since 2024 · 360 posts · 132 votes
    2w
    Quote from @Chris Seveney:

    After years of watching people build followings in this space, I've noticed a pattern that repeats so consistently I think it's worth naming.

    When someone has a real product, real deals, a real track record, they lead with that. It's the easiest thing to sell because it's true.

    But when the product isn't really there, you start seeing a predictable fallback sequence:

    1. No product? Sell an idea. Almost always dressed up as "you can do this with no money down." No capital, no credit, no experience needed. That sounds like it's removing a barrier, but it's actually removing the one filter that would otherwise weed out an audience, because a pitch that works with zero capital and zero credit is a pitch that's designed to work on anyone.

    2. Idea doesn't hold up? Push a lifestyle. Cars, trips, the visual of success standing in for the substance of it.

    3. Lifestyle isn't sustainable? Shift to a message. Motivation, positivity, inspiration content. Vague enough that it never has to connect back to an actual result.

    4. No message left? Fall back on values. Family, faith, tradition. This is the hardest layer to push back on, because it starts to feel like you're attacking someone's beliefs rather than their business claims. That's exactly why it's an effective last line of defense.

    The test that cuts through all four stages is the same: ask for the actual deal. The purchase price, the real return, the closing statement. Someone operating from any of these fallback layers will redirect back to the story almost every time instead of answering with specifics. And if the hook was "no money down," ask the follow-up: if this genuinely works with none of your own capital, why isn't the person teaching it just doing it themselves at scale instead of selling you the how-to?

    What other fallback tactics have you run into that don't fit neatly into these four stages?

    @Chris Seveney, one thing I would add from the legal and business side is that I pay close attention to what is actually being promised in writing. I’ve seen people get pulled in by a strong story, but once you look at the agreement, the refund terms, who is actually providing the service, and what results are really being promised, the picture can look very different.

    For me, the best protection is simple due diligence before paying anyone. Ask what exactly you are buying, what support is included, who is responsible for delivering it, whether the claimed results are typical, and what happens if the program does not match what was represented. I try to separate the marketing from the actual agreement every time. I sent you a connection request as well. I appreciate the way you make people slow down and look at the substance behind the pitch.

  • Don KonipolBusiness Member
    Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
    2w

    In actuality what these guru mentoring programs are promising is a SHORTCUT.   If it was offered in medicine it would read “no need to spend 4 years in medical school, two years in residency and another year as an intern.  Our 4 day boot camp along with our ongoing mentoring and support, as well as being part of a tribe of like minded and positive thinking medical professionals allow you to prescribe medications, recommend medical procedures, perform diagnosis and advise patients in as little as 30 days!  Spend an additional 2 months taking our YouTube video course on surgical procedures will allow you to perform surgery at 245 hospital in the U.S. “ . 

    Or if offered in say accounting “ only fools spend $200,000 or more for a BS in business with a major in accounting and an MS in accounting amassing enough credit hours to qualify for CPA designation.   With our 5 hours video workbook book keeping course you will be able to perform the same work high paid CPAs do.  And when you run into the rare occasion when you have a question but no answer, our exclusive AI program will guide you with 99.5 % accuracy!.  

    Why do 99% + of people paying gurus fail to achieve their objectives?  Because short cuts just rarely work, and almost never for a sustained period of time.  The guru formula is to teach a very specific strategy which (maybe) was profitable for certain people in certain location over a certain period of time.  Sustainable success in real estate investing requires knowledge of real estate principles, real estate finance and real estate law; experience, talent, and yes, luck. 

    Private Mortgage Financing Partners, LLC
  • Aaron ZimmermanBusiness Member
    Accountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes
    2w

    Great post! Thanks for sharing!

  • Stuart UdisPro Member
    Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
    2w

    @Don Konipol It goes beyond shortcuts. The biggest barrier to investing in real estate is access to capital. Many prominent gurus promote the idea that people can acquire real estate with none of their own money, which is unrealistic except in rare circumstances. They take an unusual deal that's difficult to replicate and present it as a typical case study. In many cases, they also embellish the facts, carefully manipulate their wording, or leave out important details.

    The latest Pace advertisement to hit my Facebook feed shows a spreadsheet for a seller-financed multifamily deal. He scrolls through the monthly payments to the seller on a spreadsheet and lands on $29,000 a month in cash flow. He then advances the spreadsheet from 2024 to the present, where the cash flow has increased to more than $70,000 a month. Of course, the link below the video is titled, “Ditch Your W-2 With One Deal.”. This is the playbook. None of your own capital needed. As soon as no capital is needed there are no longer any barriers. The most successful real estate gurus aren't selling shortcuts, they are selling access to investments that were thought to be out of reach.

    This is where I believe BiggerPockets has a responsibility to dispel bad information and verify accuracy of information that brings paid customers to the BiggerPockets community. When the idea that real estate investing is easy and requires little or no money runs rampant online, more people become interested, sign up for platforms like BiggerPockets and become paid members.

    Why wouldn't BiggerPockets want to establish a vetting process for the most influential real estate gurus and report on the accuracy of the claims they spread online? Give the gurus an opportunity to verify their claims and transactions. If the claims are validated, I can’t think of better PR for them. If they refuse to participate, BiggerPockets should disclose that to its community. If they do participate and the review uncovers half-truths, omitted facts or contradictory findings, those results should be shared as well.

    • Chris SeveneyBusiness Member
      Moderator
      OP
      Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
      2w

      I saw that and chuckled and thought "oh the RV park idea faded pretty quickly, lets try MF this week,.

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    • Don KonipolBusiness Member
      Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
      2w
      Quote from @Stuart Udis:

      @Don Konipol It goes beyond shortcuts. The biggest barrier to investing in real estate is access to capital. Many prominent gurus promote the idea that people can acquire real estate with none of their own money, which is unrealistic except in rare circumstances. They take an unusual deal that's difficult to replicate and present it as a typical case study. In many cases, they also embellish the facts, carefully manipulate their wording, or leave out important details.

      The latest Pace advertisement to hit my Facebook feed shows a spreadsheet for a seller-financed multifamily deal. He scrolls through the monthly payments to the seller on a spreadsheet and lands on $29,000 a month in cash flow. He then advances the spreadsheet from 2024 to the present, where the cash flow has increased to more than $70,000 a month. Of course, the link below the video is titled, “Ditch Your W-2 With One Deal.”. This is the playbook. None of your own capital needed. As soon as no capital is needed there are no longer any barriers. The most successful real estate gurus aren't selling shortcuts, they are selling access to investments that were thought to be out of reach.

      This is where I believe BiggerPockets has a responsibility to dispel bad information and verify accuracy of information that brings paid customers to the BiggerPockets community. When the idea that real estate investing is easy and requires little or no money runs rampant online, more people become interested, sign up for platforms like BiggerPockets and become paid members.

      Why wouldn't BiggerPockets want to establish a vetting process for the most influential real estate gurus and report on the accuracy of the claims they spread online? Give the gurus an opportunity to verify their claims and transactions. If the claims are validated, I can’t think of better PR for them. If they refuse to participate, BiggerPockets should disclose that to its community. If they do participate and the review uncovers half-truths, omitted facts or contradictory findings, those results should be shared as well.

      You make good points.  However, I do think “shortcuts” plays a major role.  At least half with the other half being “little or no capital”.  With all the capital in the world a novice taking a guru mentorship will most likely not have sustainable success, because unlike what the guru states, his mentorship is not a “shortcut” for the knowledge and experience necessary for long term success. Maybe you and I basically agree but just see the factors weighing in differently.  Anyway, I do see your point about capital, or more specifically ACCESS to capital.

      Doing a “nothing down” deal was a lot easier when I started real estate investing in the 1970s.  First, with inflation high and interest rates high, seller’s knew they’d have to provide owner carry back to sell their real estate.  Secondly, mortgage loans were assumable or assignable with no qualification or lender approval.  Third, title companies were “adaptable” to supporting “creative” transactions, and finally some “strategies” and “tactics” that are probably illegal now were perfectly acceptable then, especially as it pertains to what is considered mortgage fraud. 

      All that being said, I have observed over my 50 years in real estate investing, lending, and syndicating, that the majority of failure in real estate investments is not in choosing the “wrong” property, nor in badly operating the property, although those certainly can contribute.  The #1 reason for a failing real estate investment program is over leverage, unfavorable loan terms, and insufficient capital reserves. 
      Private Mortgage Financing Partners, LLC
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    2w

    A fool and his money are soon parted.

    Will always be true!

  • Real Estate Broker · Cape Coral, FL · Member since 2014 · 382 posts · 300 votes
    2w

    I've enjoyed reading this thread, thank you contributors. 

    I was showing a home to a buyer many years ago who'd called into my office about wanting to see a listing. It would've been his first deal as an investor/flipper. While his wife and kids waited outside in the car, we toured the home and discussed investing. He told me he'd spent over $25,000 (not a typo) to date on RE seminars and programs. I was flabbergasted but didn't say anything. He did all the talking, barely looked at the home, and we parted ways. 

    I felt bad for him because he wasn't very sophisticated and he'd been duped by seemingly every guru out there. He could've taken that $25,000 and used it on a wise flip investment, in what was at that time a rising market, and done very well. 

    fool + $$$ + guru = $0.00

  • Real Estate Consultant · Evergreen, CO · Member since 2018 · 1k+ posts · 729 votes
    2w
  • Stuart UdisPro Member
    Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
    2w

    @Chris Seveney Don’t forget the car washes, and now he is promoting the purchase of small businesses using creative financing. Mind you, this is someone who claims he had to start his entire business over in 2018 and then grew his single-family portfolio to more than 300 homes using creative financing. Within the past few months, he said he is now down to roughly 50 homes, doesn’t recommend owning more than 25 and believes investors should be very selective. According to Pace, it is better to buy apartment buildings, but only those with at least 50 units.

    He has also claimed that his “community” completed $5 billion in transactions in a single year. I would love to know what actually made up that figure. How much involved creative financing? What percentage was single family, multifamily or something else?  Who knows whether the $5 billion figure is even accurate, but if it is, imagine the potential downstream distress created by billions of dollars in creative financing transactions undertaken by Morby minions..... particularly based on the apparent qualifications his community members displayed in the forums. My personal favorite was the moron who claimed he didn't care if he acquired properties underwater using creative financing as long as the properties cash flowed..... Still can't believe BiggerPockets wants to provide a platform for this to its paid customers and all BiggerPockets representatives have to say is Moderators have sway and asking for suggestions on how to combat this practice while simultaneously giving them a stage and credibility.

  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    2w

    Generally I've always believed that no one can be swindled that doesn't want to be swindled. Meaning the individual has as much, if not more, responsibility in being taken than the one doing the taking, unless we are talking about the use of force. People who lose their money to gurus, MLM pitches, unqualified "experts" and the like have either tried to avoid the work of vetting investments, learning material & approaches, and getting their hands dirty, or they have absconded their responsibility of verifying the safety of their investment, whatever it is. If a bank opened up on the corner tomorrow with a sign advertising 5% more interest than the nearest competitor but no FDIC insurance they would still have no shortage of people standing at the street.

    That said, I think manipulating and taking advantage of people because you can - because you have charm or magnetism, or understand basic human nature, or have a name, or any other feature - is shameful and the lowest of the low.

    Skyline Properties
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