Is anyone here a member of Lifestyles Unlimited or does anyone have any experience with them. They are a mentoring program that helps you get started in REI based out of Houston. From what I can tell so far they seem to be legit. I attended a "Case study" last night but was unable to stay long but I am attending a workshop in early January and I will let you know how that goes.
Thanks
Although I was never a member of Lifestyles, a few years ago I taught some classes for them as a guest lecturer and attended some others. I also got to know some of the members as well as Del and others working for him. I do not think Lifestyles is in the same category as many of the other guru and mentoring programs, in that Lifestyles provides a hands on approach with very specific guidance and an emphasis on the actual purchase of residential properties. Their emphasis seems to be on realistic approaches to real estate investing, unlike many of the easy money (and useless) methods taught by the "gurus".
On the down side I have found that Lifestyles "over promises". Hence they are able to lead an inexperienced real estate investor to believe that obtaining "the lifestyle" i.e. passive cash flow is much easier than it really is. A number of the members I am personally aquainted with have purchased a large number of multi family units, however, for the most part these have been management intensive apartment projects that do not lend themselves well to absentee ownership. I know quite a few ex members who said that they were able to obtain positive cash flow from their investments, but that the passive part was a myth, that they were spending lots of time putting out fires at their properties. The truth of the matter is that Lifestyles bread and butter are C and D apartments, in these absentee management usually means profits are absent also. Further, Lifestyles tag line is that they can teach anyone enough so that anyone can be successful as an investor in real estate. My experience in the business (30 + years), has shown me that this is absolutely incorrect. Just like not everyone can be a successful surgeon, airline pilot, or major league baseball player, not everyone can be a successful investor. Better to find out if you have the capacity for success in real estate before you invest your money, find out if any of the ingedients you might be missing are obtainable and then figure out if they can cost effectively be obtained.
Jody, Lifestyles may very well work for you in your ambition for real estate investment success. Lifestyles is certainly a much better choice than most of the other so called guru or mentorship programs. However, I think you are currently suffering from myopic vision, seeing only the positive and not the negative. I'm afraid the tone of your posts are similiar to those of new multi level (network) marketing recruits, i.e. Amway, or whatever their name is this month. It sounds like an almost religious feverence, Del is a deity whose only purpose is to help people, the mentors at lifestyle do it to give back, not the money, etc. The truth is Lifestyles is a business like any other business, despite what they may claim or it's membership wants to believe, they perform their service for the same reason we all work , THE MONEY.
Your experience doesn't match up with the story the ponies were giving Debbie. Good for you being able to see through the high pressure tactics. That is a sure sign that you have the discernment to actually be in this business!!!
Mike
These guys have weekly radio shows in the DFW, Houston, Austin area. I listen quite a bit when I'm online. Usually, they are either motivational in nature or discuss specific REI topics. I think they do a good job overall on their shows. Although I have not been to any of their meetings to meet the people, I do get the distinct impression that they are all about growing their membership. Isn't the basic issue that if you are a newbie, you have a few choices to learn the business, REI clubs, books, self education. The question should be which is the most efficient way to learn? No matter which path you choose, you will spend time and money. Everyone in the REI education business is out to make as much profit as they can. Is it cheaper and quicker than self education? I would suspect that if you follow LU's plan, you and LU will both profit.
hey is this thread still going i was really getting in to it good points brought up by the members.
I live in Texas and listen to the LU radio shows. I'm considering whether to join or not, so this thread captured my interest. With that said..
MikeOh, your big issue here seems to be "real" expenses. Charles S. has laid out his experience, so I ask that you please share yours.
Assume a $100k property renting for $1,000/month (effectively ~$940 assuming about 6% or 3 weeks of vacancy per year)
The formula you're giving (50% of gross rent) works out to $30,000 over 5 years.
8% for monthly management = $4,800
PM fees to write new leases - say 3 times over 5 years = $1,500.
Advertising should be included in the lease fees paid to your PM. Even if it isn't, figure $50 for a 2 newspaper ads for each of the 3 vacancies = $150
Utilities & lawn care for 3 wks/year * 3 vacancies = $600
Assume one of the 3 vacancies was an eviction = $1,000 in legal fees. (is that reasonable? Texas is extremely LL-friendly)
Assume the evicted tenant caused some damage. Figure $5,000 in repair costs, minus their $1,500 deposit = $3,500.
Entity maintenance (I assume that's for an LLC?) - is $500 over 5 years reasonable?
So for a 5 year term, all of that totals up to about $12,000. I have looked through several of your posts and I believe that covers all of the expense items you mention except for maintenance.
That leaves $18,000 ($3,600/yr) to cover maintenance & other expenses. Can you please describe exactly where you expect to spend this much money?
There are several sticky threads in the Rental Property forum about the topic of expenses. Please read those posts and ask expense questions there. Lets keep this one on the Lifestyles Unlimited topic.
I am a commercial hard money lender and commercial real estate investor based out of Houston and have been investing in Texas properties since 1981 and lending since 2001. Lifestyles is a private for profit real estate investment club and a member of the National Association of Real Estate Investment Clubs. Years ago when I was residential lending and investing I was a speaker at a number of Lifestyles events. I had business dealings with 3 or 4 Lifestyle members, and these members were successful at purchasing small to medium apartment complexes. All found the work at managing and rehabbing the properties to be much harder than anticipated, and the expenses to be much higher than they had forecasted. However, each said that they would not have been able to complete the property purchase without help from Lifestyles. The two investors that I had followed up with were eager to sell the apartments and invest in NNN properties!
My opinion is that Lifestyles probably does provide a solid educational basis for a mult family residential real estate investing career. However, their hype and over selling lead members to believe that investing in management intensive real estate (residential) is not time consuming nor difficult. I remember them telling prospective members that they could travel/vacation 3 weeks per month and check on their properties the other week! Lifestyles would be a good program if potential members were told the "reality" up front and could then make the decision with true information as to whether they wanted to put in the time, effort and money to be successful.
But I guess that really is the problem with all "guru" programs it's not that the principles taught won't work, it's that the new investor is misled about the time, knowledge, experience and capital needed to be successful.
I just heard about LU. Is it wirth joining? i have no money to invest but would like to start. can this be done with no money out of pocket?
Read the whole thread and you should be able to form an opinion about lifestyles unlimited. Your other question needs to go into a separate thread, though there are many threads on that question already.
This is in response to the several inquiries about Lifestyles Unlimited.
I joined two years ago (Jan.2008) and found the two day introductory class to be very informative. I regret that I became a P.I.G. member as I soon learned the houses they offered to investors were junk houses priced par with most others in the same area.
The offered houses were not livable and required many thousands in repairs to bring up to livable standards. They like to say: "Mr. Investor captured $xx dollars in equity on closing". Now, think about that statement for a minute. The property cannot be sold for profit the day after the investor closed so how can their be equity? They will tell you the equity is assumed based on comps. for the neighborhood averages for like kind of house. In reality, my experience was the selling price and others that were owner occupied were valued about the same except that the ones offed by Lifestyles were in terrible condition. There was no comparrision whatsoever!
Keep in mind that Lifestyles Unlimited is a real estate broker and their goal is to sell houses!
They will pitch a membership as a "perfered investor group (P.I.G.) and tell you it is fully refundable. The P.I.G. membership fee 10K. The problem is it is refundable in small percentages of the seller agent commission. In today's financing market very few if any investors will quallify for enough loans to earn back the membership fee.Therfore, the 10K fee is not a good investment in my oppinion unless you need the tax deduction as a business loss. Even with that, I would not do this if I had it to do over again. I also would warn any novice investor to reconsider real estate investing as the ecconomy has a long - long way to go before real estate prices stabilize. There is much more drama on the horizon. Believe it! Residential and Multifamily values have not found a floor and 2010 will be a complete disaster for anyone holding leveraged debt.
I recommned you apply due dilligence and research this topic on youtube and listen to the professionals.
Yes, California trouble will visit Texas!
I recommend waiting it out until 2013 before making your move. Right now keep your powder dry.
I have been reading all of this and I am a member. I read the things that people are saying. I feel sorry for them. They are not educated on the subject and talk as though they are. I am sure the believe what they are saying because of a bad experience or someone that they know and trust has told them about there bad experience. All this tells me is you need to stop listening to how to do it wrong and put away your pride and listen to someone that has done it right. It doesn't matter if it is 1 house or 600 unit apartment building. If they did it right they are a step ahead of you and you might learn something from them. Someone earlier was complaining about a mentor that only has 2 rent houses. Well I can tell you this I would rather listen to that mentor that did 2 homes the right way and is not afraid to tell me that they might not have my answer right then but is smart enough to get me the right answer. I will take that kind of advise any day over a person that has 20 houses and can tell you every way they did it wrong and that they still cant do it right. How does that help me? We can all find people willing to give bad advice but I would bet most don't even own real estate. I have been around the ones that do and once they push there pride to the side and actually hear what member after member say and are willing to teach them. Much less the mentors, they realize that there 20 houses could have been 40 or 50 if they just knew how to do it right from the beginning.
I am not a PIG member although I wish to be one day. I paid $500 for my membership and as far as high pressure sales pitch I can say no there is not . They will go thru the last hour or so of the 2 day and show you why you would or would not want to move up in levels. If you have less than $50000 it is not even a question. They tell you not to pay for the PIG membership. They do have a membership that they call Challenge. But they will tell you that they have and will teach you how to do this on your own. That the Challenge program is for people with know time, very scared, or just plain lazy.
I have 2 houses now and have done quite well with these homes. You can find them at .50 on the dollar. You have to remember why they are sold at that price (they need work). Most are what the lender would call uninhabitable. You can't ask full price for that house. You can't even get a conventional loan for that house and most people do not know how to get around that. That is another reason for the low price. My 1st house was $68500 and after a $13500 rehab is worth $118000. Rehab is the key word here and people that believe there are no houses out there just dont understand. I would not pay $118000 for a house that needed foundation work, new roof, appliances, cabinets, paint inside and out, carpet, tile, water heater, lights, fans, foists and many other little things that go into a rehab. I would pay $118000 for a house that looked and smelled new and every major item in the house was new and under warranty. I was out about $10000 on this house that's with 2 closings and 10% down. I screen my tenants very well and it is not luck that I have a good tenant. If you have a bad tenant it was do to 2 things, your greed and laziness. My tenants are responsible for keeping the home in good repair. I have it spelled out in my contract. A good tenant does not have a problem with this. They can see that everything is new and what might break has a good chance of being under warranty. Now back to the numbers. I now have $80000 loan $794 payment that includes taxes and insurance. I rent it out at $1200 a month. That is $406 in cash flow a month. My tax assessed value went down and now my cash flow is up another $69 a month. That puts me at 406+69= $475 a month all from 1 house along with the $38000 in equity or if you take out what I have out of pocket $10000 it still is $28000 that is a 280% return equity alone. You can also look at it like this in less that 2 years I will have been paid back every dollar I put in on this house.
OK house #2 I paid $69000 with $14500 in rehab. The house appraises for $126000. I have $8000 out of pocket. After 2 closings I have a $79000 loan with a payment of $694 including taxes and insurance. The house rents for $1200 a month that gives me $506 in cash flow. Along with $47000 in equity or $39000 after my out of pocket on the deal. I would do this deal again in a heart beat. I would do it if it was only $200 in cash flow and $20000 equity. The percentages are still far better than that of a 401k or an IRA. I would have to pay into those every month but my homes pay me a total of $981 in spendable cash every month that I do not have to pay a penalty on or excessive taxes on to get my hands on like the 401K or IRA. That's also $85000 in equity on top of all that. Just look at what 10 houses would do for you at that rate.
To end my story, Lifestyles is a business and they will tell you that it does very well. But the money is not made from memberships. They give that back to you in 40% chunks in the commissions they make. They make there money in the commissions they get off the real estate side of the business. They are closing multiple apartment deals a month not to mention houses. Do the math how much is the commission on a $5,000,000 or more apartment and this is done all the time. Multiply that many times over every month with all the homes on top of that and you might start to get the picture. I don't know where it became a sin to make a profit. I am happy for them to make theirs, because if they didn't they would not be here and I would have never had the nerve or knowledge to make mine.
Also I maybe a one post wonder. I dont know. There is so much negativity on here. I dont like to surround myself with that. You will become what you take in and from what I see here, this is not a healthy place. If someone asks a real question, because they honestly want to improve I there situation and I can help, I will. Also Lifestyles is in Texas. These strategies are for these markets. They can be used other places but always find someone there that has done it right first.
Clint
Just wanna throw my 2 cents in. I live in Houston and have 1 rental. I have listened to LU's 1 hr radio show for 3 years everyday, and find it very informative. It Does feel like a sale job though, its all about memberships. The radio show covers some RE topics but generally is motivational in nature and usually has a guest that "made it". The info they give is very general and not the full truth; however they do give good advice on property management and i will admit i have called and asked questions. They do however make it seem like renting is the easiest thing in the world.
I wish natalie would post on BP and give LU more credibility as i have often thought about joining, but would like to see some awnsers to the 50% rule questions, and the other valid questions posed that still remain unawnsered.
Steven
Saw some activity here, so I thought I would check in again.
First, Clint, congratulations on your houses, sounds like you are doing well. BTW Natalie has posted here some, but I think she probably got turned off by the negativity that abounds here. Seems there are a lot of people here that have nothing but very general and bad things to say about RE. That's too bad, because it can be quite lucrative if you know what you are doing.
As far as me, I am just sitting back collecting my three rent checks from my three rented houses, paying the bills, putting aside money for the annual bills and the unforeseen expenses, and pocketing an extra $1000 a month.
I am very grateful to Del, Dawn, Jeff, Chuck, Natalie, and all the rest at LU for giving me the knowledge and confidence I needed to get started. I probably didn't need to go PIG as soon as I did, but I've gotten a good chunk of my $10K back and I'm sure I will get the rest back this year. It is nice to have access to all the training about multi-family and have the option to make that move as soon as I am ready.
Best of luck to you all and please don't let the failures of others on this site turn you off from RE. You can tell from their attitudes why it is they fail. It's not RE that failed, it's they that failed in RE, but they have probably failed in many other things too.
Charles, if you take time you will see that many posters in this thread that are critical of LU are very successful LONGTERM RE investors and that is why we listen to them.
The 50% rule is not a random number, did you not read that it is the national average across real estate.
I understand LU's model and listen to the show, however i have many questions never awnsered that have been posed.
Ill list a few questions i have and maybe Natalie, you, or someone at LU can awnser becuase i am in search of a group/mentor in houuston.
1. please explain how/why the 50 percent rule doesnt apply to you/your group.
2. Why the mentors ALWAYS praise robert kyoski on the radio show.
3. why LU rents the building they operate out of and not own it themselves and lease it back to LU.
4. My main problem- why the upfront fee is more then the yearly dues. The fact that the joinup fee is double the yearly dues tell me that they do not expect repeat business.
5. Why have i heard mentors on the radio show say if you get the right tenant in you will likely not see them until it is time to renew the lease. I mean comeon, i have heard this with my own ears.
just a couple i have.
Steven
Clint and Charles, I agree with Steve on the quality of the longtime posters here on BP. They are topshelf and offer great, detailed advice without expecting to make $ off of us. I hope you spend some time on here reading old posts, ask new questions, and share your experience with us. I've heard on the show that most repairs are addressed in the lease and require the tenant to pay. Can you address this?
BTW, I'm listening to their old radio shows online as I'm working/surfing.
I will try to answer these questions the best I can...
1. please explain how/why the 50 percent rule doesnt apply to you/your group.
I wouldnt say that it doesnt apply. Its just with them being here 20 years and with 1000s of members experience. We all share ideas here. Part of the membership is if they help you get what you want, you come back and help others get what they want. We all know REOs in general need work when you buy them. When we buy them, we rehab them with the purchase and have the expense capitalized. Anything that is broken or could ware out and break in the next 5 to 7 years is fixed or replaced. This helps with costs down the line. Most everything is under warranty. My lease states you break it you fix it. If it is anything else I use a $250 deductible per incident. This helps a lot. Also makes the tenant take better care of the property if they know they are out money. The work is up front. We look to sale the homes in the next 5 to 7 years. Before the warranties run out and the place becomes in need of major repair again. Besides anything you didnt fix up front most buyers will want fixed when sold. Now you just moved things from capital improvements to an expense. We take our profits and buy more houses. $50k would buy you 5 deals like the ones I am in. Now I have turned 1 house into 5 with 5 times the profit.
2. Why the mentors ALWAYS praise robert kyoski on the radio show.
They like robert kyoski cash flow quadrant and how he puts it into simple to read terms for beginners what an investment is and what debt is. Not so much robert him self because if you are going by deals done and knowledge we have many members that are on par or done more than him. Its just how simple he has made it to understand. There is a whole reading list and not all has to do with real estate.
3. why LU rents the building they operate out of and not own it themselves and lease it back to LU.
Why not. When you grow it is easier to rent more space or move. Its like why buy or lease a car both have there good and bad to them. But to be honest I have not asked them. I do know that we have members that rent the house they live in or are in an apartment and they own rent houses. They say its cheaper to rent what they want and just put the money into there business.
4. My main problem- why the upfront fee is more then the yearly dues. The fact that the join up fee is double the yearly dues tell me that they do not expect repeat business.
Again why not. They never said they were not here to make a profit. They also tell you to leave your check book at home when coming to your free introductory seminar. I would suggest going to case studies instead if you are worried about this. They dont try to sell anything there. Also they encourage you to go out and get 20 real estate agents and make your own team to feed you deals. If you do this as I did they dont make a dime off of any of my deals but I have made so much off them using what they know.
5. Why have i heard mentors on the radio show say if you get the right tenant in you will likely not see them until it is time to renew the lease. I mean come on, i have heard this with my own ears.
just a couple i have.
This goes with do your work upfront. Screen your tenants. I dont talk to my tenants after they get in for months or years at a time like they said. They have a bunch of stuff on this aspect and this will be what keeps experiences down and saves you from evictions and law suits. They will tell you that there are 2 reasons to fail in real estate 1) greed 2) laziness. Both will stop you from doing what you need to do. I didnt do what they said for my first house and sure enough. I had a slow pay tenant and was always being called. I would have to send a 3 day letter out almost every month. Work work work! I learned to listen to them. Every house after that and the rerent to new tenant in that first house has been great. I have seen, done and lived what they have taught and found it to be true. I manage my own properties because there is so little work to be done on my part. But I had to put my pride aside. and listen to someone who just wanted to help. All this for $500. I call that a bargain.
I hope this answers your questions and I know there are people out there looking for conspicuous theories. Some people that dont listen and have lost. This makes for someone very bitter. What we do in our lives and in real estate comes down to our choices good or bad. We must live with those choices and not blame others for where we are at.
Clint,
Being in Houston RE and having attended some LU free seminars, listened to many radio shows, maybe you could answer a few questions.
1- You say they only make money from RE deals, OK, then can you name some multifamily properties they have sold or purchased over the last several months?
I monitor available MF properties and havent seen any for sale by their Realty company, actually not very many have been moving at all in Houston except to big portfolio buyers
2- With TREC rules, how is LU giving you a rebate on commissions from their RE company?
3- Is there a limit to the rebate commissions or can you affectively make money over your membership fee paid and therefore need a 1099 from them?
4- Why are their big time Mentors still working at a job when they are supposed to be very successful investors for many many years?
I just don't get why someone would do 5 or 6 radio shows and a seminar or two a week IF they really were independently wealthy with RE. It seems to suggest that they need the income from LU and that relects poorly on their hype.
Meanwhile, they advertise to show you how to get your life back from corporate america, but they are a corporation in america and are all working a job, it just does'nt seem to add up.
I'm not being negative... just curious.
Great company and never a bad review or complaint to the BBB! I've been a member in San Antonio for almost a year now and love it! If you're interested in learning how to build wealth and passive income streams in real estate this is the group to be part of! I love Lifestyles!
Passive income streams. I've always wanted to make tons of money and not doing anything. Jody, tell me the secret because I dont have the three easy payments of $399.
Well if you don't think you would benefit from hands on mentoring, then don't become a member! That's all up to you. I am only 25, and the only education I have regarding real estate investing was the books I've read from Robert Kioysaki. After 3 yrs of reading books and sitting on the sidelines I found Lifestyles and joined right away. I was very happy with the support and mentoring, as a newbie I definitely needed it. Within 1 month I purchased 2 cashing flowing properties and currently looking for a 3rd. I also took my father to a case study and he was blown away...Anyway that's my experience, take it however you'd like. But the fact is the company has been around 20 years, NO complaints to BBB, and has many happy members. They are the largest network of investors in central texas. Hands on mentoring, unlike any other group I have ever been involved! You can be as negative as you want, but education does not come free. Please get the "something for nothing" mentality out of your mind.
Funny how those are thier exact advertising talking points you are repeating... but it's really curious how many people who claim to be members there just so happen to come to this forum on their very first posts and leave.
Possibly you could answer some of the questions I posed to the last Happy Member who seems to have left the building. After all, It's not being negative to ask questions where a $10,000 membership fee is involved.
I am very passionate about Lifestyles because if it were not for them I would still be sitting on the sidelines just talking about it and not doing it. I have also met many like minded friends and my life is much better since becoming involved with them. The talking points mentioned are repeated because it's the truth. But it all depends on what you as an investor are looking for. If you'd rathar learn everything on your own, then go for it. I love having a network of invstors I can learn from! I also have mentors I can call at anytime with any concerns I have and they are more than willing to help. As for answering your questions, sure I will try. By the way, I am not yet a pig member so I will not be able to tell you everything involved with that. I do know they go through an extensive education process and some will partner up on apt deals.
1- You say they only make money from RE deals, OK, then can you name some multifamily properties they have sold or purchased over the last several months?
I monitor available MF properties and havent seen any for sale by their Realty company, actually not very many have been moving at all in Houston except to big portfolio buyers
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Lifestyle's members own 20% of the Houston market. I am not a member in Houston but if you call the office there I'm sure they can tell you the names of the units. I'm a member in SA, and I just spoke with a several members thursday night who are closing on 4 apt deals this month.
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2- With TREC rules, how is LU giving you a rebate on commissions from their RE company?
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With every deal you do, they give a percentage back to you. You are only entitled to what you put in.
4- Why are their big time Mentors still working at a job when they are supposed to be very successful investors for many many years?
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Because they are very passionate about what they do. It's wht they LOVE doing. It's the same reason Robert and Kim Kioysaki still do seminars and write books. They have more than 36 million coming in every month from their real estate and still want to educate people!
Del comes from a family of teachers and it's what he loves doing! By the way, he is in the process of teaching someone else to do the 2 day classes for him. But many members love to learn from Del, he is an awesome teacher. If you have ever heard him speak then you would know what I mean! Almost all the mentors in the SA offices own cash flowing real estate, they even show you the deals they have done. Check the website for the videos on this.
http://www.youtube.com/watch?v=3avyZUrAUho
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"Del comes from a family of teachers and it's what he loves doing! By the way, he is in the process of teaching someone else to do the 2 day classes for him. But many members love to learn from Del, he is an awesome teacher. If you have ever heard him speak then you would know what I mean!"
I saw your facebook page and you seem real. You've apparently soaked up the material they put out on themselves very well, but I already know the answers. Believe me or not, I've heard him speak way more than I want to remember. That sales pitch that he's only in it to help people does work fairly well until you really know Del...
Good luck on your investing and think 10 times before you give him pig or challenge money. I will tell you that Del's father was an accountant... not a teacher if that's his story going on now.