A Broad Rant About Guru Real Estate Investing Courses

by Julie Broad

Last week Dave and I attended a real estate investing club meeting in Langley, BC. We went for many reasons… the biggest ones being that we like to meet like minded people, we wanted to meet the man behind the club, and we had a few questions about sandwich leases that we wanted to find answers for. Since we weren’t going to be far away from the meeting, we stopped in.

The feature presentation was from a local area mortgage broker. And he did an excellent job of explaining the important things you need to understand about mortgages as a real estate investor. It was a good refresher for us and an excellent talk for those new investors in the room. When we got to the part where we started discussing credit scores the mortgage broker mentioned a couple he just tried to find financing for that had a bad credit score because they had 16 credit cards.

"Get as many credit cards as you can" suggest many guru real estate courses

He went on to explain why having so many credit cards can be very damaging to your credit and how you should keep it to five max. He also gave some other great tips like to keep your credit card limit high but always keep the amount you owe low because your credit will be negatively impacted with balances that are close to your limit. For some other tips on how to effectively manage your credit, check out this article on how to check your credit.

At this point one of the new real estate investors in the room raised her hand. She said “I just took a real estate investing course that told us to go out and get as many credit cards as possible. They said that having all that credit was a good thing.

I actually felt Dave shudder beside me. That brought back memories of the real estate investing courses WE took early on as investors. And some of the advice that causes so much damage that it can take years to recover from (as it did with us). We knew instantly that it was one of a few get rich quick guru programs that had come through town recently … but the mortgage broker was horrified and said “Who taught you that?

Sure enough … she confirmed that a get rich quick guru course had struck again.

And the worst part is I think that this woman didn’t actually believe the mortgage broker when he explained why this was horrible advice. She tried to argue “well you’re not necessarily going to use the cards you’re just supposed to have them in case you need cash for a quick flip.

If it weren’t for the fact that we were trying to keep a low profile –  I would have stood up and suggested that there are many things that guru taught her that were high risk and very dangerous if she decided to act upon any of them without learning the fundamentals of real estate first.

There are also things that the guru taught just because they stand to make money off your fear!!

Here’s some of the horrendous things we were taught at a get rich quick guru program and the motive behind the lesson:

  • You must have a triple tiered corporation – you are stupid and foolish if you don’t have one. They actually used these words, explaining all the horrible risks and extra taxes we’d pay without one. Um… guess we’re beyond stupid because we bought a two tiered corporation and were not able to buy and finance a single property in that fancy pants $3,000 corporation the guru sold us – and for 3 years we tried!
  • Call your credit card company and demand a lower interest rate and higher balance on your credit card. Conveniently they get us to do this during your lunch break in the course. We did as we were told – and by gosh – we were successful. It’s a good thing too because thanks to that call we had $20,000 of available credit on our card that we could use to finance the big mentorship package they convinced us to buy at the end of the weekend. And, they reassured us, with one deal we’d pay it off so why not?! By the way, it actually took us over a year to pay it off and then 2 more years to fix all the problems we created for ourselves by buying several troublesome high leverage properties.
  • Wholesaling, assignments and sandwich leases are going to make you tons of juicy and gigantic cheques within weeks of learning the techniques. These were hot topics at the course we took because the cash looks so much juicier than a ‘boring old buy and hold’ that takes years to get super rich from. And yes, one good assignment or wholesaling deal CAN give you a nice juicy cheque but guess what, you aren’t going to find that deal a week or two after the course because there are still a lot of things you have to learn to do that first deal. But luckily before you leave the program they help you to realize that there are many more details you need to know before you can do those deals – AND they offer just the solution – specific courses on each subject for $3,000-$4,000 so you can go out and learn more.

Listen – we fell for everyone of those things so don’t feel bad if you did too. These folks are master marketers. If there is one thing the get rich quick gurus do know how to do it’s sell! And we were determined to be successful as real estate investors so we believed what they said and dove head first into everything they had to offer.

It’s a good thing we were determined or we never would have picked ourselves up and gone on to succeed after the early mistakes.

But now when I meet people who actually DO all these risky “techniques” that the latest guru has taught them I want to shake them to their senses and save them from the years of stories and pain we experienced.

People – you have to educate yourself in order to be successful as a real estate investor. And good quality real estate investing courses ARE a fantastic way to meet like minded people, get solid advice, and learn what you need to learn to move forward.

But look for the people who are genuinely trying to help. Look for someone that presents a realistic side to the story. I look for teachers who are upfront about risks, the time and the effort you have to invest. I also look for people who are teaching fundamental principles as well as their particular spin on investing. And most importantly, I want to know whatever else they are selling in advance, so if they are telling me I should invest in Florida I know whether they are saying that because they also happen to sell investment properties in Florida or because they just like the market fundamentals. It’s ok either way but I want to understand their bias. Just like if they say I need a 3 tiered corporation I want to know whether it’s because they are going to upsell me their package for  a 3 tiered corporation or whether it’s because it actually saved them from losing everything in a law suit.

As the next guru rolls into the city nearest you … I beg you to think carefully about what you NEED to learn. And if that course will give you what you need then go. But before you sign up for ANYTHING they are selling think about the bias that might be behind what they are teaching. And question what they are saying. Why in the world would anyone ever suggest you take on 15 different credit cards? Can you imagine what a mess your credit would be if you actually started to use them and something went wrong – and by the way some things will go wrong as you get rolling – so why put yourself in such a dangerous position? Just having so many credit cards does serious damage to your credit that takes time to repair without even using them. And as a real estate investor you should covet, love and care for your credit score.

And yes, I do have a real estate investing course to sell that is focused on the fundamentals, and yes I welcome you to purchase it, but no… that is not why I am ranting against guru real estate investing courses. I am ranting because I care about the moves you make as you become a real estate investor – and there are things you can do to make your life a whole lot easier as you start – and spending tons of money on guru programs isn’t one of them!

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30 Comments

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30 responses to “A Broad Rant About Guru Real Estate Investing Courses

  1. Wow Julie, this was an awesome post. Those guru’s that you talked about are huge parts of one of the REIAs that I stopped going to. Even the founder of the club was constently pitching his product or affiliate products.

    I only purchase items now from people that I’ve met online and have gotten to know over a period of time, like tampa steph or steve cook.

    It’s very dangerous to rush into real estate investing. Those professional sales people pray on those that do.

    You and Dave really have your act together and it’s good to read about how your past mistakes got you to this point.

    • Thanks Scott!! You’re so kind!!
      Many of those weekend seminars from big name gurus are like drinking from a firehose when you are new. Or worse… going to a Las Vegas buffet when you are STARVING!! Everything looks so delicious and you try to eat it all but you make yourself sick!!

      Ok… no more analogies. We learned a lot from the programs we took early on but not all the lessons were good. Your approach is a good one… get to know somebody’s style and what they are about and then take their programs. We still take all kinds of courses but we figure out what we need to learn before we go there so that way we don’t buy programs we don’t need … most of the time 😉

  2. Is there a way to mention the guru with the bad advice? Rhymes with KIA …

    I know that there will be more coming through, I’m just curious.

    • The guru program she took was different than the one we took. But the advice was oh-so-the same.

      Honestly I think you know the ones we’re talking about… famous American guru guys … the ones whose name is all over the program but they never actually ever show up themselves.

  3. Kirstin

    That’s why I like to read your blog: I feel it is honest, no BS, real (because you are actively investing) and your course wouldn’t costs me an arm and a leg (charged on one of my 15 credit cards, hahaha).

    • Thanks Kirstin – it’s been a tough day for me. One of those days where it’s not just the weather raining on my parade – and reading your comment gave me a great big smile!! THANK YOU!!

  4. Like Scott said, this is why I stopped going to REIA’s all together, let alone “sale-minars” or “pitch-camps”

    I do what I do and I kick ass at it! I’m legit and for real.

    A former mentor/coach of mine used to be a speaker at one of these(I won’t mention which one, but You’re FIRED! seems to ring a bell)

    He thought he was doing the right thing until his 3rd appearance when he found out right before he went up on stage to speak that the co-speaker for that weekend was a young punk that lived in his grandmas apartment and took a city bus to the event. He said he walked up on stage, told the audience that unless they were braindead, they would leave immediately. He was escorted out and hasn’t spoke since 🙂

    he’s one of the good guys

  5. Hey, great rant, Julie!

    When it comes to the REI education we all need, you just gotta be COMMITTED to not letting your knee jerk at everything that glitters. All the sales triggers in the book are at play…and if you don’t see it and prepare mentally for it in advance, then you’re at huge risk of making a big financial mistake you’ll regret later.

    I always suggest to folks that you shouldn’t spend more than $100 at a time on REI education without an accountability partner you force yourself to check with first…and ideally someone who’s a lot further down the road than you. And when it comes to spending thousands…you better already be committed to whatever the model-at-hand is, and not just in the exploratory stage. You should spend hundreds figuring out where you want to focus, not thousands. The bigger investments in education can be very worthwhile, but can also be a big, huge, honkin’ waste.

    I better be careful or I’ll get on my own rant.

    Thanks for posting another great one!

    …jp moses

    • Hey JP! It feels like it’s been awhile since we’ve heard from you!! Nice to see you around here again. I think your accountability partner idea is fantastic!! And definitely make it someone that is not at the same event so when they sprinkle the magic buying potion over the audience your accountability partner isn’t also impacted. That’s what happened to me when Dave signed up for the $20,000 mentorship package years ago. I am pretty sure it was magic buying potion that let me support that decision… 🙂

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  7. Hi Julie. Nice blog. Your rant made me laugh. I attended one of those $100 infomercial events early on, from a “guru” (whose name rhymes with Russ Whipney).

    I remember the homework from Day 1… call your credit card companies and ask to increase the limits so you’ll be ready to invest… followed by the Day 2 hard sell (“Are you ready to be successful? Raise your hand if you’re ready! Now, follow the young ladies to the back of the room…”)

    The guy next to me had been telling me how hard he was struggling, then on Day 2 he charged a $8000 course on his newly-increased-limit credit card… although you could spend up to $54K!

    I didn’t buy… in fact I was angry. I went home and searched the “guru” online to find that he was an ex-con, banned from a number of states from selling his programs, and I learned of many more of the manipulations they used in city after city (like overbooking the room on purpose, and keeping the doors locked to create a stampede on Day 2).

    I went on to spend probably close to six figures over the years on education, mostly on really good courses, seminars, and coaching from decent gurus, and occasionally on a dud. I guess the best advice is buyer beware… it’s so much easier today to network with other investors, and so much info is way cheaper or free. And turn off that late-night TV and read a book!

    Best Regards,
    Brian

  8. Hi Brian,
    Thanks for your note! I wish we’d been so wise as to get angry but back then we were just so keen to make money as real estate investors. Since then we continue to spend a ton of money on education as well … we are just careful about what we sign up for!! You are right – it really is buyer beware. And these days you can really get to know the people you’re learning from before you spend any money with them too… thank you Twitter, Facebook and of course, the internet!! And you’re right … reading books is a low cost and excellent form of education too!!
    Thanks!
    Julie

  9. Great post Julie! I always enjoy reading and listening to you, JP, and Patrick. Thanks for keeping it real.

    • That’s nice to hear Scott – especially since I have a ton of respect for what JP & Patrick (P-Rid as I call him) do. You’ve put me in good company. Thank you!! Best regards,
      Julie

  10. Hi Julie,

    It is timely that I read this post today.
    I was also reading your comments section here and saw that your Dad posted the link to the article from the CBC on Rich Dad Poor Dad, from a few days ago.

    Today, I actually wrote a blog post on The Rich Dad Seminars, and the attention that was drawn towards them by the CBC. It is an excellent piece that the CBC did. The feature article and interview by the CBC should be watched by everyone considering become a real estate investor. There are a lot of RE scams out there.

    Onwards and Upwards,
    Neil.

    • Hey Neil – I hadn’t watched that marketplace video. Thanks for sharing!! That really was exceptional journalism.

      My only issue with that video is that lawyer?!!! He did not add any value. His comments about lease options were extremely uninformed. But otherwise that was an exceptional video.

      WOW!! Good stuff. Thanks for sharing.

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  13. I am so glad I read this post…. I was skeptical about these things until I read your post and the CBC research.

    I am so sorry that you two had to learn that hard lesson for all of us to learn from. At least you didn’t quit and found your own way.

    Hope to learn more from you guys and your experiences.

    Eric

    • Hi Eric,
      Thanks for stopping by!! I am glad that we were able to help you out a little bit!! We look forward to having your around the blog,
      Julie

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  15. At least it feels good (or less bad) that other people have had the same experiences. I think one good piece of advice is to not overextend yourself. Also, it took me some time to build up contacts of people that I could turn to, whereas when I first started the my main source of information was what I was seeing and reading on the Internet from the “majors”.

    • Hi Eric,
      Thanks for your comment! It’s true that it does take time to build up your network … but the best thing a new real estate investor can do is start going to their local real estate investing club meetings. That way you can immediately start talking to people who have been around the block a time or two. That will short cut the time it takes to build a good solid network!!
      Thanks again,
      Julie

  16. I, too, sell real estate investing courses, and I shudder at the thought of being lumped into the undermost depths of guru deception. Maybe I would convert more if I promised instantaneous success, but I need to sleep at night. So, instead, I say this, “Hello, my name is John Lydic. I’m not a real estate ‘marketing’ guru or B.S. artist masquerading as a real estate investor, not entirely anyway. Among various other entrepreneurial pursuits, I am a nuts and bolts, feet on the streets, genuine wholesaler. I’m not selling some secret, magical system, and I’m not promising riches. I have no aspirations to work the REIA circuit to become a seminar superstar. I sell houses, information and sometimes junk out of my garage … good houses, good information and good junk!”

    Great job, Julie!

  17. Lewis

    Hi Julie,
    thanks for he blog. It was very informative, and inlighting. I am in the Georgia area, and am looking for a good mentor. I found a woman by the name of Susan Lassiter lyons. I guess she will teach me what I need to knoe to be successful. Have you heard of her? Any suggestions would be gladly appreicaited.
    Thanks,

  18. It’s good to find people who actually offer good information without selling it for an arm and a leg. My friend and i attended a 3 day $200 Rich Dad Poor Dad seminar and can testify to the unscrupulous way these ‘gurus’ push you into making disastrous financial choices.
    We are both 24, straight from college, have good jobs but still understand that the corporate ladder offer no security. Even now 2months after the seminar, we are NEWBIES at REI and still looking to start right, so you can understand how ripe we were for the pickings when Rich Dad came along.
    As the course went on, the first day they handed out the script on getting your credit limit increased, day 2 was the upsell on the 10K course and day 3 was hard core pushing of what you will get with “only” a 10K investment, and the various success stories that students had had. One guy in our class even signed up for the $85K course package and was being upheld in the class as a poster child for what making the right choices in life looks like.
    Although we could have pushed ourselves to afford that initial $10K course, thank goodness we are both highly skeptical people in general and could both see that the value proposition of investing $10K with no certainty of return was something no banker or even Kiyosaki himself would sign up for.

  19. Renay Strobridge

    investing is really necessary if you want to have some financial freedom. ^

    My favorite internet site
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