I purchased the Ameraco "program" in April '09 and I can say I learned a lot about it in the last two weeks...some good, some not so good. A lot of what everyone said here in this blog and on other blog sites is true and credible advice...too bad I did not heed it. I can also tell you that I asked my credit card company to enter a dispute against Ameraco and issue a credit. I feel better now, as I came to the realization, that I probably wasn't ever going to do a deal with them or their investor network (if it really exists, and I cannot say if it does or doesn't yet).
This post is to help prevent anyone else from wasting their time, money and dreams on Ameraco. It might not be a classic Internet marketing scam like some of the others, but if it's legitimate, then it's nearly impossibile to execute a deal and get paid, in my opinion.
In a nutshell, I spoke with one of their sales reps for about a week before the sign-up, asked lots of questions, got lots of positive feedback (as well as immediate callbacks), and the FedEx with the "program" and membership info arrived as expected a week later. I got a package containing a manual, some supplemental books with links to Internet resources, an audio CD and the account/password to their private-access Website (deal submission online form and other resources, such as basic real estate contracts in PDF format). I read the manual on how to work their program and listened to the audio CD containing a scripted Q&A session. (The supplemental information with links to Internet resources was nothing special that I couldn't find on my own.) The manual they sent was somewhat helpful (as far as a basic real estate information and contracting were concerned, plus how to submit a deal), and they did go to a lot of trouble to explain how the program could work given the right circumstances and perseverance, and why/how it was legal (assignable contracts), but it left me with more questions than it answered. Plus, it had several outdated references, redundant information, poor examples and big holes regarding the execution of current real-world real estate investment deals. I also learned that a big part of the strategy relies on the seller waiting for and putting-off the ernest money until/if an investor picks up the deal (unless you want to risk your own money). In theory, the program sounds good, and might have worked for someone at some point in history, but in reality, it's very difficult to execute in today's market given the very tight investor requirements, deal submission process and "highly motivated" seller assumptions. It's like finding a needle in a haystack just to locate the target property...and then you need to find at least 3 other almost identical, sold "comparables" to prove your good deal and current market price...and still be at least 30% below fair market value for nearby residential listings (on top of deducting necessary repair expenses), and at least 40% for an REO...and don't think you can submit a deal for vacant land, commercial or anything else that is not a standard family residence. There's a lot of home foreclosures out there, but it's difficult to find a property/deal that meets Ameraco investor requirements (and you won't find them on Foreclosure.com or any other well-known source)...and it's still not clear how much commission % will be paid...or how quickly...if at all. The method for calculating the commissions and the details of how it gets paid are ambiguous and not well documented in the manual. You're definitely being paid to be a bird-dog (at best), and you have to find the bird...then you might get paid...but I cannot verify that with anyone.
Much to my dismay, as soon as I was a paid member, I never did get to speak with my sales rep again to get my questions answered (even though he said I would be able to) and I always got transferred to a "Support Line" voice mail when I called. Support never called me back (oh, and they know if the caller is a paid member by the incoming phone number, I found out, and then it's "straight to voice mail" from then on. Before sign-up, the operator would tell me if my sales rep was "in" and she could apparently see him from where she was sitting, but after sign-up, she claimed she couldn't see his desk and he was always "out" for family issues or some other reason unavailable, and my v-mails left with that sales rep were never returned anymore after he got me to sign-up).
Eventually, after not receiving any support call-backs, I asked the Ameraco operator/dispatcher to transfer me to the sales manager. He didn't return my call until many hours later (saying he was in meetings). I mentioned that I wanted a refund (being dissolutioned and dissappointed with the support) and that's when he told me that the program was sold as "non-refundable" and I should have seen that in the terms and conditions. I told him that my sales rep said I could get a refund if I was not happy with the program...so the sales person basically lied to get me to sign-up (one of the many lies). During the call he went to great lengths to blame me for not making the program work...I wasn't trying hard enough or looking in the right places for a deal, apparently. Eventually, during the call and after a lot of hostility on his part, the sales manager agreed to refund my money if I sent all the materials back to him (less shipping, of course). I also told him I would file a complaint with the BBB and post some negative blogs entries. However, it remains to be seen if he really follows through with the refund.
On a side note, I think that at one time in the past Ameraco might have been a viable company...even though their claim of 10,000 investors in the network is doubtful. But in the end, it's becoming clear that Ameraco's primary objective was just a "boiler room" operation on the front end designed to get the $495 out of every caller, and the sales rep will just tell you what you want to hear just to get you to sign-up...such as, deals are easy to find in my area, investors are plentiful with lots of money to spend, and commissions are big, easy and quickly paid. Once you are in the network the relationship immediately changes, there are new surprise conditions that they didn't tell you about before you sign-up, and there's no guarantee that an investor wouldn't steal the deal behind your back (although, I cannot say if that really happens, but they address it in the materials).
I also called the Florida Better Business Bureau to find out more, and I talked with an agent at the BBB. Seems Ameraco has had 11 complaints in the last 36 months, and 4 this year in '09. All complaints have been addressed by the company, so on one hand that is a good sign, but I'll bet that Ameraco bends over backward to rectify those complaints to keep that A+ rating because it's an integral part of their sales strategy. So, I would be very cautious about this rating...it's easy to get an A+ because it's calculated by the BBB computer based on a formula for the number of complaints and the rectification of those complaints.
Oh, one more thing...when I talked with the credit card agent, she looked at the details behind the transaction and apparently the charge is run through a "Barber and Beauty Shop" merchant account, even though on my credit card statement it said "Ameraco". When I told the BBB agent about the "Barber and Beauty Shop" merchant account, she asked to see the detail so they can address it with Ameraco.
I'll post more details about my experience if anyone is interested. Mike.
Edited Jun 26 2010, 07:59 by Mike Schroff