It seems as though every man and his dog have made the decision to become landlords in recent years. The promise of an escape from the dreaded debt trap, and a ticket to the life we all dream of through the hallowed passive income stream has led many individuals to take the path into real estate investment … and lots have found their choice has brought much success.
Unfortunately, as with all methods of investment, there are significant risks involved. Money may be lost far more easily than it is made, especially if research is not conducted properly. It’s vital to be aware that as the demand for expert information in the real estate world has grown, so, too, have the number of “gurus” who claim to have “the secret to real estate success!” This insider knowledge is frequently packaged into an attractive shiny must-have offering, that is tempting to newbies in the industry.
Of course, the growing number of gurus, has made the marketplace hard to navigate, and many people are unsure whom they should be listening to, especially when it comes time to part with cash in exchange for knowledge. It is a concern that many of our readers have been bringing to our attention, and it is for that reason we have compiled this article. We want to highlight what you should be looking for when it comes to these experts so you have the inside scoop on the so-called Real Estate Guru Scam Trap. We will share with you exactly how the scams tend to unfold, and what you can do to make sure you avoid them.
Real Estate Guru Scam Lures
When deciding on an area in which you would like to purchase an investment property, as well as the specific property itself, you need to dig deep to arm yourself with as much information as possible. This includes knowing what the going market rate is, how much rentals are being leased for and so on. Much of this information can be gathered yourself through internet research, as well as through speaking to real estate agents and brokers.
You will essentially make or break your success by purchasing a property at the right price, providing it appeals to renters in the area you have chosen. There is no other hidden ‘secret’ to success. Of course, listening to others that have made their fortunes in real estate can be useful, but the industry and economy fluctuate, and you need to keep current.
Knowing this, you should sense a red flag when you find people trying to persuade you to join their “get rich quick” seminars, even if they are inexpensive or even free to attend. Your warning bells should be sounding, as these terms often signify a trap.
The “secret to real estate success” courses and seminars to look out for often follow a particular formula.
- They open by sharing some wild success stories, which demonstrate how people’s lives have been changed with the guru’s own method. These are the hooks that capture the imagination of the attendee.
- Sometimes a celebrity will join the stage, too or well-known names will at least be mentioned, in order to make the system more appealing. Name-dropping may seem like a cheap trick, but it tends to work.
- Often you will be armed with a set of persuasive tools or a step by step method of negotiation.
- You will then be challenged to demonstrate your new skills by calling your credit card company to raise your credit limit.
- This will be followed with a hard-sell on the part of the guru, who will push for the attendees to sign up for an advanced course or even additional coaching.
- Of course, the fact that you suddenly have credit available can make this opportunity all the more tempting and difficult to decline - this is the key to the trap.
- An additional up-sell that many of these so-called gurus will use to follow their free course, is private mentoring, to guide you through the first steps of being a landlord and to source the best property deals for you.
When you see the formula written down in black and white like this, the scam is quite obvious. You may think that you would never be caught by something that is clearly manipulating, but in the heat of the moment, many have fallen prey to this trap.
How to Spot a Real Estate Guru Scam
The sad thing is that there are many genuine real estate experts, who offer legitimate advice that can be quite useful to people starting on the path of becoming a landlord. So, the question is: How do you know which gurus are part of a scam, trying to trap wannabe landlords?
The only real way to keep yourself and your investment protected is by doing your homework. Research all seminars that you are tempted to try, look for ratings online and in publications and ask for referrals. Be cynical and don’t be tempted to believe everything you read online. It is easy enough to add fake reviews to a website, so follow up on referrals and to determine if they are legitimate.
A good question to ask yourself is whether the actual real estate professionals are spending all of their time and effort persuading people to join their seminars. Do they really need to put pressure on people to sign up to their advanced courses? The answer is probably no.
However, if you are interested in a seminar that seems legitimately helpful, remind yourself that this is a business, and be sensible. Don’t get blindsided into signing up for extras, especially the basic seminar that didn’t make you any cash. If that is the case, it was probably all a scam to persuade you to sign up, while they attempt to hook you in for the real sale.
Foolproof Tips on How to Avoid a Real Estate Guru Scam
The water can get murky when it comes to real estate, and knowing who to trust can be difficult. While we recognize this is an industry requiring money to be spent in order for a profit to be made, watching where money is going is imperative to your long term success as a landlord.
Don’t allow yourself to be caught up by the charismatic sales manipulation of a real estate guru. It is easy to be swept up in the appeal of the promises they make, but expensive decisions should not be made irrationally. The excitement often wears off outside of the heat of a seminar. A true real estate guru wouldn’t rush you into an immediate answer since worthwhile research takes time. So, work at your pace, to your own schedule. This is your investment, after all.
If you strongly feel that you would benefit from a real estate seminar, look for one with a money back guarantee. These can provide you with peace of mind that you will find success through the system that is being sold to you. Of course, there is still the potential for such draw cards to be used simply to lure you in for a hard sell, so keep your wits about you.
The knowledge that such scams and traps exist, to con new landlords to part with their cash, should be enough to arm you against potential red flags. As with all investment opportunities, there is always a degree of risk, and the responsibility for all investment decisions lies ultimately with you. No matter how persuasive an advert for a seminar may be, or how you might feel you need to enlist the services of a mentor, be sure to research thoroughly before you commit.
The job of a landlord is challenging, requiring you to wear many hats, but the fundamental role must be to make careful decisions when it comes to spending money. The overall goal of the whole venture is to develop a successful passive business that can supplement your income and help you live the life of your dreams, so be sure to keep your business head on when it comes to promises that seem too good to be true. Stay in the know, always conduct thorough research and invest wisely. This is the only real way to avoid falling prey to real estate guru scams and traps.
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