24 September 2007 1115 views 4 Comments Print This Post  Email This Post

Want to make millions in real estate? You better be extremely hard working, patient, and know what you’re doing. Going to a seminar will not make you rich. Buying whatever that seminar is selling will definitely not make you rich. To make real money in real estate investing, simply learn and do, then repeat those two steps. Take the time to read real estate investment books and websites, talk to knowledgeable people then actually go and invest. You’ll make mistakes and learn from them and the next time you’ll do things differently. You’ll learn and do things many times over the course of your investment career. Unfortunately, people who fall for seminar scams don’t want to do all that. These types of seminars appeal to these people, which I mentioned in a previous article about get rich quick schemes. It is people who are impatient and do not want to put in the hard work who are keeping these so-called educational companies alive while simultaneously wasting their time and money. Surprisingly, the schemes of the past aren’t much different than those of today. Today’s are just cleverly disguised.

Look at this video from a while back by the infamous Tom Vu. Feel free to laugh.

You’ll notice that the draw that he used back in those days was the notion of a good life without hard work. Look at his boat with the nice looking ladies on it. Check out the group of people who are claiming they made X amount in profit during the first deal. Why would they frame the check and why would the check only be in the amount of the profit and not the whole proceeds from the property sale? Strange. Look at the guy claiming he will become a millionaire by age 25 using Tom’s system. He looks like he’s a 35 year old while saying that. We look at the past and laugh if anyone were gullible enough to buy Tom’s program. But at that time he did sell a lot of his program to people. Nowadays, the same types of programs are just cleverly disguised.

A friend told me about a so-called real estate investor’s university called Nouveau Riche university. I won’t even honor them with a link. This so-called university teaches people to invest in real estate and build wealth for a hefty tuition payment. This company runs seminars to recruit new “students”. This company has all the fundamentals of the traditional get rich quick scheme. They make it look extremely easy to make money. They will teach you the fundamentals of real estate investment. They will give you access to their database of foreclosed or short sale properties of their choice. Their properties will come complete with a tenant and they will even set you up with their in house property management team. I believe she mentioned that the cost to join was only $15,000. Sounds great doesn’t it? Wait, there’s more to it than just that. If you can’t afford to pay $15,000 to join, they will kindly assist you in finding a student loan for their program. Now you can make all this money and pay off the loan over time! Excellent idea so far right? That’s just the tip of the ice berg. You can make even more money than that. Once you enroll, you can become a student advisor and recruit new students to the program and each time you do so, you receive a cut from the “tuition.” Wow, real estate investment profits and residual income all rolled into one. As you can see, this makes it seem like a no-brainer and it makes it appear very easy for anyone to do.

Lets look beyond the initial facts for a moment and dig deeper. These guys will give you access to their list of foreclosed properties after you pay. If the company themselves own these properties, then they have ready and willing buyers all the time for whatever they are selling. If the company is just brokering these deals, they get commission for selling any of these properties. I’m willing to bet that these properties are never great deals. The students are buying at the wrong end of the flip. They’ll also manage the property for you so you don’t have to lift a finger! What you will have to do is pay them for that service every month. What if you can’t afford it and opt for their student loan services? That’s great for them too since they probably earn a fee for originating the loan. To top it all off, its a multi level marketing scheme. As soon as you realize you can’t make a dime with their so called investment properties, you’ll want to make that tuition fee back. The only way to do that is to recruit, or sell this package to another unsuspecting person. For every person you recruit, the company makes money. Wow, this actually is a very great system, for the company that is. They make money off of tuition, loan origination fees, flipping properties to their students, property management, and I’m guessing a few other avenues. From a marketing perspective its actually kind of clever.

The only thing that is worth something in this whole process is the books and materials they provide, which probably gives a decent overview of real estate investing. Unfortunately that same information could be had for less than $100 from books and websites. These seminar pitches will continue to evolve and get more clever. Looking back at the Tom Vu seminars, its easy to spot it as a scam. It just looks so cheesy. However this so called university may seem like a legitimate school to most people. You see, we can laugh at the past and those who actually fell for Tom Vu’s program, but we still need to be extra cautious and make sure we’re not the ones being laughed at 20 years from now.