Does this sound familiar? You’re new to real estate and want to get ‘in-the-game’. You open up Google, type in a few real estate words that peak your interest, and click ‘Search’. BOOOOOM!!! You are flooded with blog posts, message board posts, websites, YouTube videos, and last but not least, guru courses. This can truly an overwhelming feeling, but also an awesome opportunity to “earn” some money. Please, allow me to explain.
The theme slogan for this article comes from our good friend Benjamin Franklin: A penny saved is a penny earned.
The majority of what you will find on the front page of many Google searches are real estate guru courses. This isn’t by coincidence, they spend money to get themselves there. Whether you’re a newbie or a veteran, the question is, are they worth it?
The short answer: yes and no.
I know what you’re thinking, “what a wimpy cop-out answer that was!”, but in all actuality, it is the true answer. On that same note though, you need to ask follow-up with the question, how much is my time worth?
Let’s Face It
1) Guru’s make their living collecting publicly available information, packaging it into fancy websites, and marketing/branding it as the “ground-breaking”.
2) 99.9% of the information the Guru’s are selling can be found and pieced together by using BiggerPockets and Google.
3) Like death and taxes, you can be certain there will be some form of hidden costs.
In Statement #1, two of these three aspects can be beneficial. Collecting and packaging the information all together DOES create an aspect of value in terms of time savings. On the other hand, as Statement #2 tells us, BiggerPockets and Google create a vast amount of value in regards to being a great “detective tool” to reverse engineer what these guru courses are teaching. Whether the guru course deals with flipping, short sales, subject-to’s, wholesaling, REO’s, blah, blah, blah, it is nothing “new”. Sure, it may have a “new” name, but the strategy has already been around the block multiple times.
I’ve taken all the paths…
Overpaid for the courses and felt like “notch in the Guru’s belt”.
Refused to buy and found the information on BiggerPockets and by other public means.
Refused to buy and wasted so much time going on a wild goose chase that I should have just bought from the beginning.
Bought a guru course, saved myself the time of reverse engineering, and learned a couple great things.
What Path to Take?
My personal strategy in determining what path to take…
1) How specific or broad is the topic? What are they claiming?
2) Estimate reverse engineering time (time spent on BiggerPockets and Google, and then piecing it all together)
3) What is price?
This is the most important estimation, as it will help answer the following question. If the topic is something broad like wholesaling, flipping, short sales, etc., then odds are there is a boatload of information available at your finger tips. If the topic is something broad, but they’re claiming some sort of “new twist”, then it will probably take a bit more time of digging before you can uncover the concept they are “re-branding”. On top of this, if indeed it is an actual “new twist” (highly doubtful though), this will impact Question #3.
This one is easy. The broader the topic and more information available, the less time needed for reverse engineering. The more “twists” and “never heard of tactics”, the more time will be needed.
This will let you know how much money you are “spending” or “earning”.
Scenario: I’m Googling and I see a course for $97 (Question 3) about raising private money. Since private money is a pretty talked about topic (Question 1), it would probably only take about 2 hours of reverse engineering time to find and get a grasp on the topic (Question 2).
I can either “spend” $97 or “earn” $97. How do I decide? I need to figure out the cost of my time.
$97/2 = $48.50 per hour
For my business model (especially given the fact I have a monthly “education budget”), I would rather just spend the $97 and use that 2 hours to either network, check out a new property, or spend it with my family.
Now, if the course had just come out and was at the typical $997 price, that is the only variable that changes. There is still a boatload of information available regarding raising private money, so all other variables remain true.
$997/2 = $498.50 per hour
A penny saved is a penny earned, so I will GLADLY sit in my underwear at my computer and do some digging in order to “save,” and therefore “earn” $498.50 per hour. For some, it may still be worth it to just buy the course, but for me and where I am currently with my business, it makes more sense for me to take two hours out of my schedule to locate the information.
Scenario: I’m Googling and I see a course for $97 (Question 3) about how you can wave a wand and it will mesmerize the bank doing the short sale to automatically say ‘yes’ to whatever off you are presenting. Being this is a strong claim and that I imagine has information that will take time to dig and find (Question 1), it would probably take about 10 hours of reverse engineering time to find and get a grasp on the topic (Question 2).
$97/2 = $48.50 per hour
But wait a minute… remember Statement #3 about hidden cost? Let’s suppose there is a way that this strategy is actually ‘new’. Well, I live in a different state than the guru does, so does that affect me? If so, how? Doing this sort of strategy seems to open up a can of liabilities doesn’t it? How can I protect myself?
Yikes!! I can either head to law school and get a degree or talk with a local real estate attorney. Both costly things to do. Add these costs onto the $97 and the costs could spin out of control.
My choice: forget about the strategy and don’t allow myself to either A) get ripped off or B) waste my time going on a wild goose chase.
Remember, there is always more than just what the initial price suggests. The more goofy claims, the more hidden costs there are going to be — unless of course you just want to walk on thin ice and open yourself up to lawsuits from all directions (but then again, that would just be ANOTHER hidden costs).
Should you press the ‘Buy’ button? You should evaluate each buying decision on a case by case basis. We all are at different points in our businesses, and all of our time has different values on it. So, while it may make sense for Bobby-Boy to hit the ‘Buy’ button, it may not make sense for Timmy-Tom to make the same decision.
It is essential you consider the value of your time and to do a realistic estimation of the hidden costs that could potentially turn that $97 purchase into a $1,997 purchase.
Photo: Adriano Agulló