There is no shortage of real estate gurus out there – all kinds of fancy training and coaching programs that promise a path to riches.
They will share their secrets for only 4 payments of $3,999. And you can have an ongoing coach for only $6,999 per year.
As crazy as it sounds, this is actually attractive to plenty of folks. They want to get into real estate investing but are lazy so don’t want to educate themselves. They want someone to tell them exactly what to do.
The Guru Way
It starts with a conference or short event – heavy on motivation and light on details.
In fact, most of it is telling success stories – whether the namesake’s experience or someone else they claimed learned through the program.
Oh you want details? Well lucky you, they are running a promotion for everyone who is at this conference. You can join the hands on training program for just $17,999!
Then when you are done with the program you are hit with reality: it still requires action.
If you weren’t that type of person going in, you aren’t coming out either.
High Profile Examples
If you follow politics you likely heard about Trump University.
People were dragged along and upsold all the way up to $35k. The results vary. Of course a few are successful. And there are many more who never make a single dollar.
An even bigger example is the Rich Dad education seminars. Huge scale. Free 1 day seminars are held all over the country, followed by a $1k three day seminar, all which sets up for a $12k to $44k payment for their advanced material. Oh and they help you raise your credit limit so you can put it on your credit card.
If you want to be sick, watch this video that secretly records a three day seminar with constant upsells:
I Am Not a Guru
I admit that I’m still learning about investing in rental properties. We are in this together and I’m less than 5 years ahead of someone with zero experience.
I happily tell you that this isn’t a get rich quick scheme. It’s get rich if you can be patient over decades.
Everyone is different so I’m not going to promise a one size fits all approach. Find your own sweet spot.
And above all, adjust your mindset.
The Rental Mindset Way – Get Educated Wisely
You can get most of your education for free. It’s important to make sure the education isn’t passive – you need to talk to people and take action.
By reading only 2 books and listening to 20 hours of podcasts, you have just enough knowledge to move on to the next step.
You will be able to hold conversations with people will a lot more experience. Admit you’re a beginner and learn from them.
After a series of conversations with everyone from investors to lenders to property managers, you will be ready for the next step. It’s the hardest one.
Get started! Purchase a rental property in your name while limiting the risk as much as possible. You will learn way more by doing.
Which Isn’t to Say – Don’t Pay Anything
Don’t be the guy who is thinks everything should be free either. Small investments can really pay off.
Take books for example – they might cost as much as $15. Yes you can probably find all the information somewhere online for free. But purchasing a book will save you time and deliver one consistent message.
A low priced event is a great way to meet people. Just be careful that it isn’t with an organization that will hold back information and entice you to sign up for more training.
I went to Jason Hartman’s Meet the Masters weekend. I already knew a lot of the information presented (although there was plenty I didn’t know about lending and taxes), but the real value was meeting others who invest in turnkey rental properties.
One of my other goals was to see first-hand how reputable the company was. I made an in-person connection with the investment counselor I worked with in my first properties.
Add it up and I spent $500 on my education. Could it have been free? Yes. But it was $500 well spent and gave me the confidence to move on to actually purchasing a property.
If there are events less that $1000 that you would like to attend, and it will push you towards your first investment, go for it! Just make sure there isn’t an up sell.
If there is a course that is less than $1000 and will provide the spark needed to get started, go for it! Just don’t expect it to do everything for you. (I’m excited to hear people’s results from Afford Anything’s upcoming class).
Be smart about your education and don’t fall for the guru trap.
How did you go about your investing education? Are there any books or podcasts you recommend?
Agree, it seems to me must people ‘selling’ this stuff are also trying to sell the actual properties too.
I just learnt by doing, and made some mistakes. I love Afford Anything, I’ve learnt a lot from Paula’s website and podcast.
Ya absolutely true. The seminar I went to was a company who makes a referral fee when you buy through their network. I was thinking about going through them anyway, so was ok paying a reasonable amount to see if it was just a sleazy upsell company (and further my education).
Glad to hear you read/listen to Paula too. She is crushing it! I’m excited to meet her at FinCon this year where she is a speaker.
Hi Brian, nice honest opinion. I super agree you don’t need to pay thousands of dollars like rich dad courses to learn to invest in real estate. It is insane that these courses charge so much,. learning by doing is excellent way combined with workshops, books, meet ups, blogs and surrounding yourself with like minded people is the most inexpensive way (but not the fastest way). another way to learn on the cheap side if you are short on cash is work for free for a mentor you aspire to be.
Ya! I just learned about a perfect meetup group in San Francisco for out of state real estate investors. Sounds like a perfect fit!
How did you get your education? Anything you recommend?
It usually is never a matter of resources but rather a lack of resourcefulness. Shoot if you want to learn real estate and a $15 book is too much, go to the library. You can’t afford to go to some professional convention, find a real estate meet-up. There are also some really good blogs out there.
It’s important for all of us to remember that the “guru” also is or has some of the best copywriters in the world. They job is to produce content that propels you to buy their programs.
Great points – the library is free! Reminds me of https://www.youtube.com/watch?v=ymsHLkB8u3s – “you dropped a 150 grand on a fN education you could got for a dollar fifty in late charges at the public library”
I just learned of a meetup by me I’m excited about: http://www.meetup.com/San-Francisco-Real-Estate-Investing-Out-of-State/
Great post! There are a lot of real estate investment scams out there. I paid a couple hundred bucks for one a million years ago, and once I really got into the material, I realized it was all ginned up stories that probably weren’t true and shoddy advice that glossed over reality.
The best education I got was buying the NOLO guide to being a landlord in California, and then reading through the very dry civil code sections that comprise the landlord/tenant laws. Then we bought a building and just learned as we went. It was a little scary, but it was the best education you could get!
That’s a great book tip. Landlording is one component I’ve outsourced so far, but before I try it I’ll be sure to check out a NOLO guide.
Agree. Gurus have their place, but need to find the ones with reasonable prices, and you as the consumer need to commit to TAKING ACTION on what you learn before you buy/attend.
Maybe the most valuable part of paying for a guru is the forcing function to take action, not the info! If you are paying money, you are signally to yourself you are serious about it.
Love the topic, Brian. I’m definitely with you here. Here are a few of my thoughts.
I’ve been investing in real estate full-time for 14 years now, and I’ve learned a lot about the guru process. Most of it turns me off, particularly the upsell tactics and HUGE prices that newbies get duped into paying. I mean you could buy a house free and clear for some of those prices!
The thing that annoys me the most, however, is that it makes people jaded about something that IS important – education. Looking back, two things have given me my highest return on investment of money and time:
1. Knowledge
2. Relationships
You can’t really buy the 2nd, except for perhaps some specific consulting advice. But people invest all the time in #1 – knowledge, and they do it in a variety of fields. I mean who really wants a doctor who bought only used books to train him or herself? Who wants an engineer building a bridge who learned by trial and error? Who wants to be defended by an attorney who learned through a lot of discussions in online forums?
I say all of that to convey the fact that education IS an important investment, either in time, money, or both. I personally invest time every day reading and learning. Most of it is free on the internet or inexpensive with books. But I also budget money every year for courses. I like in-person if possible (for the reasons you stated), but online courses where the interaction with other people is facilitated can also be valuable. And early in my investing career I invested more because my learning curve was steeper.
This really all is a ROI calculation. The problem with gurus is they don’t all care about their student’s ROI. They only care about their own. But if we all invest carefully, just like we do with everything else, education pays incredible dividends.
This is great advice – thinking of educationally investments in terms of ROI!
I frequently remind myself you only get what you put in (if you are into 90s music: http://www.vevo.com/watch/new-radicals/you-get-what-you-give/USMCV9800011). With education this is especially true. Knowledge isn’t a passive thing where you magically reap the benefits. To get the ROI on you education investment, you have to put in the effort.