6 Signs It Could Be a Scam

Guru programs are notoriously difficult to assess in terms of quality or outcome for their students. Some students rave about their gurus, while some complain about how they got ripped off by a fake guru.

Six Signs Your Real Estate “Guru” Might Be a Rip-Off

There are a few patterns that raise yellow and/or red flags that I want to call out that are concerning and should make you skeptical when deciding whether to spend thousands (or sometimes tens of thousands) of dollars on guru training.

1. They have a celebrity connection that they never stop talking about

Gurus will typically flaunt a network of connections that include a celebrity that they have “invested” with or promise will be involved in their course or seminar. Chances are the celebrity will not make a live appearance, and the closest you’ll get to the celebrity is a recorded video of them discussing all the massive benefits of real estate that will surely turn you from the “average Joe” to a rock star owning a yacht. 

2. You will get rich quick! Or will you?

Real estate investing and wealth building is a very long-term game that requires significant capital, education, and risk. Real estate is a very slow, long-term investment that includes cyclical markets that can take years to recover from. 

Putting in no money, spending no time on education, and relying on a course to help you get your first deal is the best way to increase your risk and start off on the wrong foot. No and low down payments are very common practices you will hear to get you started, but let this be your warning that if you have no money, you should reconsider investing in a course or your first deal.  

Additionally, speaking to the “no money needed” advice, you will be surrounded by advice that will teach you “why” you should invest in real estate instead of “how” to actually invest in real estate. Do not get shiny object syndrome, and definitely do not let the redundancy of FOMO (fear of missing out) affect your decisions to invest in real estate. 

Here are a few very common phrases that should ring alarm bells that you should definitely avoid: 

  • “How to invest in real estate without doing any actual work!”
  • “Make a fortune in real estate with this secret!”
  • And, of course, my personal favorite: “Automate your portfolio and travel the world while your tenants pay your mortgage.”

3. There’s no money-back guarantee

Legitimate programs offer a money-back guarantee if you are not satisfied with the product. A big way to increase your risk is to join a program, group, or seminar that comes with an intro fee but does not mention a money-back guarantee in its description. 

Expectations should vary based on the duration of the programs as well. If you are 14 weeks into a 15-week program, I would not expect you to want a refund on your payment. But a two-week program? I would definitely expect some form of a money-back guarantee. 

4. You will be surrounded by upselling

You’ll be inundated with content about how the guru was just like you before they became ultra-wealthy. You will find that the seminar is focused on the benefits of why you should invest in real estate, how your day job is holding you back from becoming a successful entrepreneur, and, of course, opening your wallet to pay for an advanced course.

You will likely see that there is a massive discount on the advanced course if you sign up during the free webinar, driving even more FOMO. Do not be pressured into making a decision on a deal that sounds too sweet. If it is a great deal while you are in the webinar, it should absolutely be a great deal tomorrow as well. 

5. There is no risk or downside to real estate!

All investments come with risk. So when you’re told of “guaranteed methods to get rich,” run in the other direction.

You are flat-out being misled if you do not think there is any risk associated with investing in real estate. Like any investment, real estate can go up or down. You can earn a big payday when you research and make a sound investment, but you can just as easily lose big if you don’t know what you’re doing. That’s not to mention factors that are unexpected or completely unknown that can ruin a deal.

6. Overwhelmingly positive testimonials and reviews from students

The “reviews” for a guru come exclusively or overwhelmingly from individuals who create accounts on BiggerPockets with seemingly no other purpose than to dispense undying love and/or personal loyalty to the guru, with lengthy commentary about the complete life turnaround that spending $5,000 to $100,000 had in a very brief period of time, rather than a rational assessment of the pros and cons of the program and their outcomes achieved so far.

Tips to Avoid a Fake Guru

Now that you have seen some of the most common tactics used to get you hooked into the trap, you are likely wondering: How do I avoid this? 

I grew up in the digital age and can attest to the fact that it is extremely easy to fall into the “guru trap” with how accessible online education has become. Aspiring to become a real estate investor takes numerous hours, days, and even years in your educational phase, and to be steered away from get-rich-quick habits in this business will only benefit you in the long run. 

I have paid for courses and programs that I did not receive the expected value in return, so please let the following tips to avoid the trap save you time, energy, and hard-earned capital.

Use our trusty friend Google

This will take you five minutes and will give you a wealth of information about a particular guru from multiple sources. You will certainly find positive and negative feedback and likely a few golden nuggets about the pricing of additional programs that would come later down the road. One step further than Google, I’d add, is to check the Better Business Bureau website to see whether consumers complain that the company hasn’t followed through on its services or promises.

Ask questions in the forums

I am going to beat this drum as long as I live. There are numerous ways you can find out information about a guru before you inquire about their offering directly from the source. This is not a shameless plug for the BiggerPockets forums, but I will guarantee you that our community will steer you away from these types of traps. 

There is likely not a question about real estate that our community has not answered in detail over the many years of existence on the forums, but you should never let that hinder you from asking again and seeking additional information. We have an extremely dense population of investors who have either had the same question or have gone through a negative experience that will be shared and bring more light to the situation. 

Test free subscriptions and services

Very commonly, you will see that you need to upgrade to the next tier to unlock a basic service, tool, or platform that you will likely be able to use for free! Do not upgrade to anything extra if you have made no money in the “free” service. If you have made no money in a free program, why would you make money in the advanced program? 

This is a business—treat it like one

As emotional as you think investing in real estate is, it all boils down to your numbers. I will guarantee you that talking to a guru will make you feel like you are on the sidelines and that you will be missing out on the most golden opportunity of a lifetime. 

Automating a system, subscribing to tiered communities, paying for coaching calls, taking online courses, and paying for a private networking trip (AKA a vacation) all sound amazing and feel like something an investor would do daily nowadays. However, this is not true, especially for a beginner. There is no secret in the sauce except for taking consistent action. 

Here are some action items: 

  • Attending local meetups
  • Analyzing deals daily
  • Listening to podcasts
  • Talking with agents and property managers for leads
  • Networking in free communities online
  • Shopping rates with various lenders
  • Sharpening your personal financial habits
  • Paying much smaller fees for books

And there are so many more things I could list that I could list that would benefit you more. 

Final Thoughts

I have been lucky enough to stumble upon BiggerPockets at a very early stage of my career, and being able to ask questions to a trusted community saved me hundreds, if not thousands, of dollars on education alone. 

Do not make the same mistakes that we see recurring on a consistent basis, and always do as much research as possible until you feel comfortable moving forward with your endeavors. I have made mistakes in the past and will continue to make mistakes in the future, but these mistakes will certainly be insulated and far less expensive due to the guardrails of the trusted network I am extremely proud to be a part of.

Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button