Want to work with a Real Estate Guru? Something to consider . . .

BiggerPockets Founder · HI · Member since 2008 · 16k+ posts · 5k+ votes

A friend of BiggerPockets, @Justin Pierce reminded me this morning of a piece he wrote at the end of 2013 about a real estate guru that I think is an important read for anyone considering working with a guru:

Colorado case offers cautionary tale on real estate investing schemes (via Washington Post)

There is some good wisdom in there folks....

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Rick H.

Lender · Greater LA/Orange County area, CA · Member since 2012 · 3k+ posts · 3k+ votes

11y

I think the majority of conflicts arise out of unrealistic expectations.

From the trainee's perspective, new folks believe a trainer is going to provide them a treasure map that leads to certain riches.

From a trainer's standpoint, they know most trainees will get distracted, become frustrated, loose interest and go on to the next thing that will capture their attention (for a time). So, investing you much time without a clear financial commitment from the student does not make sense.

The trouble arises when trainees' have spent serious money on the front end but before they understand the fundamentals and try to take shortcuts. As I've said on these forums before, the time to invest in training is not until you've learned the basics of real estate snd are ready to focus on a niche. And even then, many people are not ready to use the tools they purchase or how to 'implement the implements'.

I can give you a treasure map and sell you a shovel, but you (the new person) must still do the digging!

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Bill T.Pro Member
Investor · Brewster, NY · Member since 2014 · 69 posts · 24 votes
11y
Thank you Joshua for sharing... Great reading ....
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Rick H.
Lender · Greater LA/Orange County area, CA · Member since 2012 · 3k+ posts · 3k+ votes
11y
I think the majority of conflicts arise out of unrealistic expectations.
From the trainee's perspective, new folks believe a trainer is going to provide them a treasure map that leads to certain riches.
From a trainer's standpoint, they know most trainees will get distracted, become frustrated, loose interest and go on to the next thing that will capture their attention (for a time). So, investing you much time without a clear financial commitment from the student does not make sense.
The trouble arises when trainees' have spent serious money on the front end but before they understand the fundamentals and try to take shortcuts. As I've said on these forums before, the time to invest in training is not until you've learned the basics of real estate snd are ready to focus on a niche. And even then, many people are not ready to use the tools they purchase or how to 'implement the implements'.
I can give you a treasure map and sell you a shovel, but you (the new person) must still do the digging!
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Justin PiercePro Member
Rental Property Investor · Woodbridge, VA · Member since 2008 · 543 posts · 121 votes
11y
Rick, this case is way beyond unrealistic expectations on the part of the students. This is a blantant case of false advertisement and more. When I spoke to the FTC Attorney I couldn't believe how brazen this guy was in his tacktics. I knew this stuff happend but it worries me that this guy could be this blatant and get away with it for that long. Makes me wonder how many more are out there right now
In the piece it also tells you how to report these guys. We need to police our own.
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Joshua D.Pro Member
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BiggerPockets Founder · HI · Member since 2008 · 16k+ posts · 5k+ votes
11y
@Justin Pierce - They are out there . . . the FTC needs to continue to clamp down on all of them.
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Mack Stuckey
Wholesaler · Camp Lejeune, NC · Member since 2014 · 13 posts · 6 votes
11y
As a student of the REI business and BP, I am definitely with Rick on establishing a foundation of general knowledge of the business before even thinking about indulging in the QUICK CASH programs. I have to admit that I was certainly heading in that direction before I found BP and all of its members. I strongly believe that there is no need to spend money on courses when we have a wealth of knowledge at our fingertips. There are a lot of Subject Matter Experts in this community that provide valuable information on a daily basis. I personally try to read every new post daily simply because 1. I want to at least sound like I know what I'm talking about when dealing with buyers and sellers and 2. I somewhat understand what I am getting myself into in regards to a deal. and 3. I have some pre-planned exit strategies! I have got to give a big SALUTE to the founders of BP and ALL the investors here that share their experiences and knowledge to this community. You are true leaders in this industry!
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Joel OwensBusiness Member
Moderator
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
11y
To Rick's point.
"From a trainer's standpoint, they know most trainees will get distracted, become frustrated, loose interest and go on to the next thing that will capture their attention (for a time). So, investing you much time without a clear financial commitment from the student does not make sense."
This is also TRUE for a majority of agents wanting to join a brokerage. I get asked all the time. I used to try to help and then would hear from them " It's too much work!" or " there are so many steps" or " I have kids, another job, blah, blah, blah ". They said they wanted it but didn't want it bad enough. If you want something bad enough you find a way to do it. I have found them putting money on the line requires them to really assess if they want it bad enough before they even start.
I got rid of all of my agents. People that contact me today I say I am not interested in them joining my company etc. My time is very valuable. If they want to give 25,000 upfront and non-refundable with a 50/50 split then I might look at it. I had had a few almost take me up on it. lol They called me and I didn't call them. If they put in the time and the work and closed their first deal for 50,000 commission they would get it all as they have paid the 25,000 upfront for example.
It's understandable most people do not have that kind of money to start but also the fact is that 99% of them do not have what it takes. So If you constantly help people without charging you are actually losing money you could be making doing your own deals or working to close deals with clients. This is why I love BP as you can share knowledge 24/7 without taking up all your time and a lot of people can see it.
Most attorneys, architects, etc. I know will do a little "pillow talk" but after that will require an upfront retainer before going any further. Some people will actually give you business and others just want to pick your brain for eternity and not do anything. You can't run an effective business model that way for best use of your time. You have to make them commit after you have proven your initial competency and worth.
Guru's, lenders, point takers, brokers, whoever there are these types in every field. For every one you shine a spotlight on there are so many others you can't see. In the pursuit of a dollar some will ride close to the line or even way over it to make a profit at all cost.
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Bill Gulley
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
11y
Haaah! Cash flow machine, okay, I'll say it........I told you so!
Justin, good article!
Everyone needs to reset your BS meter, the ones to watch out for are those that boast of making money or imply $50,000 in profits as if that's a normal day, easy or to be expected.
First thing they want is your attention, money chatter seems to be what they think is necessary to do that.
BTW, RECs, HUD and other agencies have "hotlines", you don't need a loss or cause of action to report those doing wrong, they can investigate cases simply from a tip, better, a documented tip. That can include what some guru type splashes on the internet!
Good article. :)
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Jeff Rabinowitz
Investor/Landlord · Farmington Hills, MI · Member since 2011 · 1k+ posts · 1k+ votes
11y
@Justin Pierce, this is very well written. May I have permission to post it (in its entirety, of course) on my real estate page?
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Brian Gibbons
Investor · Sherman Oaks, CA · Member since 2008 · 6k+ posts · 3k+ votes
11y
When I got sales and marketing training from NY Life, they invested 10s of thousands $$$ in new agents, and many agents did not work out. A successful life - mutual fund agent goes through a lot of rejection and Series 6 - 63 training, and sales - marketing - referral prospecting training.
I had to give 50% of commissions away for life, but I received high producer bonuses when I earned them.
Sell to Eat. No sell, No Eat.
Real estate credentials is a joke compared to insurance and retirement planning. Just pass the RE test.
And the penalty for fraud is different. Just look at poor "Bud Fox" at the end of "Wall Street": SEC, US Postal Service, US Dept of Justice. Can you spell "Orange Jump Suit"?
The psychology-sales training needed in REI is different than the psychology-sales training need as an agent. As the Brits say, its like "chaulk and cheese".
The "Dave Deldados and Russ Dalbys will get theirs, they are sophisticated fraud promoters.
My advice,
Read books, ask questions here on BP, you will do well.
And it will take you a while, so be patient.
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Justin WindhamPro Member
Banker · Nationwide · Member since 2015 · 4k+ posts · 1k+ votes
11y
Wow. Thanks for posting, @Joshua D.. Nice article, @Justin Pierce
A family member of mine got pretty involved financially and emotionally in Dalbey's products. I'll have to share this with him.
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Rick H.
Lender · Greater LA/Orange County area, CA · Member since 2012 · 3k+ posts · 3k+ votes
11y
Originally posted by @Bill Gulley:

Haaah! Cash flow machine, okay, I'll say it........I told you so!
Justin, good article!
Everyone needs to reset your BS meter, the ones to watch out for are those that boast of making money or imply $50,000 in profits as if that's a normal day, easy or to be expected.
First thing they want is your attention, money chatter seems to be what they think is necessary to do that.
BTW, RECs, HUD and other agencies have "hotlines", you don't need a loss or cause of action to report those doing wrong, they can investigate cases simply from a tip, better, a documented tip. That can include what some guru type splashes on the internet!
Good article. :)
Bill, Since I only now bothered to read the article, and saw "Russell T Dalby" my BS meter immediately deflected fully towards the Red/orange area.
Reminds me of the final line spoken to Jack Nicholson's character, Jake Geddes, in the 1974 movie hit about deception, real estate, water rights and...incest:
"Forget about it Jake, it's Chinatown"
And you thought Dalbey would be slapped around, crying 'she's my Sister...she's my Daughter!'
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
11y
@Brian Gibbons Del Dotto retired long ago.. I used to live right across the street from his vineyard in Napa. Have spent many an afternoon sipping Cab's in his caves !!!
http://www.deldottovineyards.com
No one will be getting him anytime soon... NOt sure about Dalby or the current versions of Guru's that are on the traveling circuit.
I do recall this guy tho he would instruct his students to put adds in craigs list I buy notes. And in many states a license was required to do what they were doing.
But ya know RE is kind of a free for all these days
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William Byers
Engineer · Jacksonville, FL · Member since 2013 · 182 posts · 66 votes
11y
Great article @Justin Pierce
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Justin PiercePro Member
Rental Property Investor · Woodbridge, VA · Member since 2008 · 543 posts · 121 votes
11y
Originally posted by @Jeff Rabinowitz:

@Justin Pierce, this is very well written. May I have permission to post it (in its entirety, of course) on my real estate page?
Jeff, yes, feel free to post on your page.
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Tami DuBose
Lender · Prairieville, LA · Member since 2014 · 146 posts · 114 votes
11y
Yes, it's important to 'call out' the bad guys, spread the word & hopefully a few less people are hurt. Still, we need to beware of wanting 'big brother' (ie. FTC @Joshua D. ) to babysit for us.
The BAD GUYS are everywhere. The consumer needs to take some responsibility (I'm not referring to the article - just generalizing.)
My background is in mortgage lending where some of the biggest BAD GUYS have made their mark. Today, I am happy to be out of the industry due to all the regulation, including compensation limitations. Where does it stop? Will I have a limit on how much I can sell my Christmas decorations on Craiglist?
@Joel Owens makes an excellent point. Some of us are gifted with the ability to teach & all of us have knowledge worth sharing. Still, not all of us have the time or energy to give it away for free.
The Consumer - shame on the consumer who does not do his due diligence. Shame on the consumer who does a little due diligence, doesn't find the answers they want & moves forward with a bad investment. I saw this all the time in the mortgage industry.
I would advise someone that the home they wanted might be bigger than their budget, DESPITE THE FACT: THEY QUALIFIED. I've even told some I would not do their loan because I felt wrong about it. (ie. on a fixed income & wanted an I/O loan, and/or ARM - What do you do in 3 years when your mortgage goes up & your income doesn't? Oh, yeah - you let it go & I buy it later.) Sadly, most are offended that I have the audacity to tell them what they can afford. They go to a lender who will give them what they want.
I am a seminar, books, tapes (yes, tapes), education junkie. I have spent 10s of thousands of dollars investing in myself for the last 20+ years.
People are going to pay a price one way or another. I simply don't want 'big brother' having his hand in everything. I want to make my own mistakes.
FINAL NOTE: Yes, there are BAD PEOPLE who need to be wearing orange jump suits & in no way am I defending them. Articles like @Justin Pierce 's need to be part of a consumer's due diligence.
Tami (not Chad)
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Rose Kabu
FL · Member since 2015 · 25 posts · 5 votes
11y
Great read and very timely for me. I am new to REI and while researching one of the gurus, I came across the BP forum. There's plenty of information here on BP both good and bad on the gurus and needless to say, I have made my decision. I plan to continue using BP and to network through my local REIA's.
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