Just about everyone of us has encountered the get rich quick scam at one point or another. The huxsters may change (or simply change their names) but the underlying scheme is always the same. They pretend to have the knowledge necessary to make you rich beyond your wildest dreams. Unfortunately, the brutal truth is that most of these people are just generic salesmen who, if they weren’t selling real estate courses, would be selling cookware or home electronics with the same sleezy tactics. To save you the hardship of being deceived yourself, we’ve assembled this list of real estate scam warning signs.
They Tell You That “Anyone Can Do It.”
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Scam artists know that they won’t sell many books by telling people that they need specific skills and personality traits to be successful in real estate. Instead, they cast an impossibly wide net by saying things like “so easy, anyone can do it,” or “this course is all you need to start making your fortune!” But if you think about it, what other lucrative, high-paying careers are there that “everyone” can do, regardless of education, knowledge, experience, or any other qualifying traits? You’d be hard-pressed to name a single one, and real estate is no different.
They Focus Heavily On A Lavish Lifestyle
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Real estate scam artists make their fortunes selling dreams, not realities. They understand that most of the people who wind up on their website are not ardent students of real estate, but adults drunk on fantasies of wealth and self-employment, who are sick of working their 9-5 job and dream of the day they can stick it to their boss and walk out forever. The charlatans of the Internet know that the best way to sell to these people is to talk about the huge sums of money you can make, and all the awesome things you’ll be able to buy with it.
These con men are the easiest to spot. They’re the ones who take pictures of themselves standing around expensive cars, private jets, huge houses, and tropical resorts, making promises like “you can have all this too, it’s easy!” In reality, real estate investment is full of hard work, extremely long hours, and possible financial losses. Though the top 1% in the industry may have achieved great financial success, it is by no means an easy-breezy riches parade, and anyone promising to put you in a Ferrari by next year is pulling your leg.
They Sell On Hype
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A common tell of real-estate chicanery is the use of “hype language.” Real estate guru critic John T. Reed explains that the trustworthy experts state the bare facts in their bios, which are sometimes kept to a mere sentence or two (such as Leigh Robinson, who humbly describes himself as “A landlord to 360 tenants and lectures in Landlording for University of California Extension.”) Be on the lookout for excessive use of adjectives and subjective claims, such as “world’s best,” “industry known,” “wildly successful,” and similarly exalted titles, keeping in mind that true experts don’t need to proclaim themselves as such.
Many so-called “gurus” not only attach ridiculous hype to their reputation, but also to the product they are trying to sell. Calling a training course a “millionaire-maker,” or promising an absurdly early pay-off is nothing more than a scheme designed to rope in starry-eyed prospects. Sometimes the hype is more subtle, and seeks to make the information seem secret and exclusive so it appears more desirable. “Guru” Nouveau Riche practices this approach, referring to his workshop as the “Wealth Summit VIP” to make his followers feel like they’re going to a part of something greater than a mere training lesson.
They Post Bogus Sounding Testamonials
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Testimonials are designed to make prospective customers believe that a product has worked for other people just like them. An effective testimonial makes a connection with the reader and lets them know that “real people” have tried the training course and are now living the results it promises. Scam artists frequently exploit this age-old sales technique by writing their own testimonials tailored to overcome the concerns they know people are likely to have. Thankfully, bogus testimonials are easy to spot if you know what to look for.
First and foremost, be wary of any testimonial that doesn’t link to the person who said it. A true testimonial from a reputable source should show you who said it so that you can verify the authenticity of the statement. Real estate gurus also know that people might think “it’s a scam” when they arrive at their webpage. Hence the many tired testimonials that start with statements like “at first I thought it was a scam…” These are only there to mislead the skeptics.
They Focus On “No Money Down” Techniques
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Most people are intimidated by the seemingly high cost of buying investment real estate. Few have tens of thousands of dollars to splurge on a portfolio of properties, and the gurus know that if they don’t address this objection, it will cost them a ton of sales. To overcome the fear, bogus gurus tend to focus their sales pitches around “no money down” techniques – a real estate strategy that allows investors to flip properties before any money has to leave their pockets.
Though these deals can occur, Your Advice & Education on Realty Development (YAERD) points out that they are rare in most situations. Although no money down sounds like a one stop solution for all investors the truth is most people will never see the opportunity to do it in their lifetime,” they explain. “These “gurus” use the same tactics as the lottery, they promote the one or two people that succeeded and do not focus on the near non existent chances of you actually turning a profit.”
They Dont Mention The Negatives
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Every salesman in every industry focuses on the positive aspects of their product, but its the ones who make no mention of any downside that you need to look out for. Real estate investing is often a dicey game of battling banks and government offices in court to acquire and sell properties. Every investor takes some loses, and the headache of constantly responding to legal threats against your assets can drive some people out of the industry entirely.
However, a true shyster’s sales letter will never warn the novice investor about such unpleasant times. Instead, all you will ever read about are the fortunes to be had and the easy life of working from your home office without a boss to answer to. As mentioned above, the con man’s game is one of selling dreams, not realities, and when the reality is anything less than desirable they will completely omit it.
They Always Want You To Buy More
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A common game that real estate conmen use is the continuous up-sell. At first, they use the hype tactics discussed combined with an extremely low training course price to make you feel like you’re getting a steal. However when the course comes, it contains nothing but basic information and an attempt to sell you the “advanced” course for a much higher price. Disappointed, you conclude that the advanced course is what you really need and send away for it, only to find that it too tries to sell you supporting DVDs and workshops that explain “the real secrets you need to know.”
At this point, it isn’t about helping you succeed, in fact it never was. It’s about squeezing your dream for all its worth and selling you as many seminars, booklets, training DVDs, memberships, and everything else under the sun until you eventually catch on and leave for good. By then however, its too late – all you have for your time and money are empty promises and an even emptier wallet.
