When Donald Trump was running for office, a lot of attention was drawn to Trump University, a provider of costly real estate seminars sold under the name of Donald Trump. As the failure of Trump University suggests, the cost of a real estate investment seminar may have nothing to do with the value of the information you'll receive as a customer.
The company that sold seminars under Trump's name is reported to have sold the same seminar at a much lower price point, using the same materials and the same instructors, before partnering with Trump to sell the programs under his name.
Just as the promise of getting rich, quickly and easily did not start or end with Trump University, real estate seminars that suggest an easy path to a very high income continue to proliferate. A significant number of celebrities allow real estate seminars to be marketed under their names, often with little concern for cost or quality.
Before we get into the nature of real estate seminars, the costs, risks and potential returns, it makes sense to look at the big picture: What is a simple rule of thumb for when it's too late for the average person, not already in the real estate business, to jump into a real-estate-related enterprise?
If there's a reality show about it, it's already too late.
That's not a perfect rule, in that with the correct combination of luck and savvy most markets are open to new entrants, but for most people it comes close to gospel.
By the time an idea reaches the mass market through reality television, you can anticipate that the market is saturated with competitors. Also, reality television can be highly misleading about the actual amount of work, cost and risk in a real estate venture. Reality TV is thus doubly misleading, suggesting that anybody can get rich in real estate, while diminishing or ignoring the down side.
As with Trump University, the fact is that most of the real estate seminars you see advertised are produced by one of a small set of companies. While you believe that you'll learn the lessons of a specific real estate expert or celebrity, the probability is that you'll be receiving a pre-packaged seminar that may be sold under a wide range of celebrity names with next-to-no changes.
At the lower end of the price scale (which is still pretty high) you aren't going to see the celebrity, save in photographs and perhaps on video. As you pay greater and greater amounts of money, and travel to the organization's national seminars, you may encounter the celebrity but it's unlikely that their participation in the course is going to be significant - because other than in name, it's not really their course.
Whatever information you receive at your first seminar, you'll be promised that even bigger secrets will be available if you sign up for another, more expensive seminar. And at that seminar, the company may try the same tactic, promising even more secrets and perhaps access to industry experts or celebrities, with "only for today" pricing to encourage you to sign up.
You will likely find that if you decline a more expensive seminar, you'll be offered a later deal to attend the same seminar or a similar seminar at a much lower cost. You may find that the company only runs out of seminars when you run out of money.
Pause and consider: Who do you believe is getting rich?
Here's one answer to that question: In 2013, one former host of an A&E house flipping show was reported to be grossing $100 million per year pitching "how to" seminars. Despite an "F"-rating from the Better Business Bureau, that year his company reportedly sold his seminar to approximately 350,000 people at more than 3,500 events.
The true fortune is not made on the real estate venture, it's made by selling the courses.
If hundreds of thousands of people are just as eager as you to learn how to get rich, whether through flipping houses or through another real estate venture, then the market should be completely saturated, with some people attempting to carry out the venture and many more finding that they are not actually able to enter the market or to make a profit.
You may hear about a star pupil who made hundreds of thousands of dollars, or more, based upon what he learned in the seminar, but with the proliferation of these seminars that pupil could literally be the one in a million who succeeded.
The simple truth: There is nothing particularly secret about what is taught at real estate seminars.
The question is much less, "will you learn something", and is much more, does what you learn have value?
If you know little to nothing about real estate, you may find the seminar to convey a great deal of useful information, save for one important fact: That the odds of you're becoming rich by following their ideas hover between slim and none.
Beyond that, what about the information you do learn? The truth is, if you do your own research, check out industry websites and forums, look for books on the subject, and explore for similar resources, you will be able to learn everything that will be taught at a real estate seminar at next to no cost - with the added advantage that you'll get a more realistic perspective on the costs, risks and difficulty of real estate investment, house flipping, or similar ventures.
Here's something you won't learn: Real estate fortunes are sometimes made and lost on luck and timing.
- Somebody who made a fortune flipping houses in a rising market, before it became a well-known business model, may not actually have anything useful to teach you.
- Somebody who made a fortune investing in real estate by purchasing cheap land, holding it, and then finding that by virtue of sheer luck the surrounding area was developed or gentrified resulting in an enormous return on their initial investment, may not have anything useful to teach you.
Unfortunately, the lesson you're most likely to learn at the end of a real estate seminar when you realize that what you've been taught doesn't live up to the hype is, "Sorry, no refunds."