Should You Attend an Austin Real Estate Investing Seminar? Probably Not

With all the news about the alleged fraud committed by Trump University, and how it ripped off unsuspecting victims, I wonder if any modern day journalists know that the Real Estate Investing Seminar industry was around long before Trump. And it remains alive and well today, doing exactly the same thing Trump is accused of. But if all you know is what you read and see on the news, you’d think he was the first and last.

If you listen to local radio while driving around Austin, or watch much TV, you’ve seen and heard the real estate investing seminar ads. At least 2 big Real Estate Investing seminars that I know of have come through Austin this year already, promising that you’ll learn how to become a real estate investor.

I think another one will be here next week. Do a Google search for “real estate investing seminar Austin”, then click on images in the results, and you’ll see something similar to the screen shown here. And you’ll see plenty of paid ads meant to capture your interest and take your money.

Should you attend a real estate investing seminar? Probably not.

I won’t claim that all real estate investment industry education is bogus. In fact, I purchased the Carlton Sheets video tape and workbook series for a few hundred dollars in the early 1990s. I was a sucker too (or was I?). More on that and how it actually helped me in a minute.

But attending the “big tour” version of a hyped up real estate investment seminar, almost always held in a big hotel ballroom for free initially (to get you hooked) and led by a charismatic TV Guru or one of his/her disciples, is almost surely a waste of your time and money. Except for the actual very, very few for whom the experience will in fact be life changing. The rest will simply get “ripped off”. Weird, I know.

The real estate investing gurus make money by selling you “information” products and “training”. Once you bite on the initial “special low price if you buy today” product, they try to take even more money from you by selling you “coaching” or higher levels of “personalized training” or “one on one”. Most will cost $1,500 to $5,000, but some as much as $30K or more.

Buyer beware. It’s that simple, no different than anything else in life. Be very skeptical, not of the validity of the claims, but of your own personal ability to capitalize on the knowledge and information you receive. Real Estate investing is like losing weight. There really is no secret. But most can’t or won’t execute, and will then make excuses or blame the system.

You would be much better off joining a local real estate investing club and getting to know the local Austin investors who invest in real estate in Austin. If you actually have what it takes to be a successful real estate investor, you just need a bit of knowledge and information to get started, not an entire seminar. Or you need a good investment Realtor (like me) to walk you through whether buying rental properties makes sense for your situation.

Back to Carlton Sheets. Those of you under a certain age may have no idea who Carlton Sheets is, but anyone 40 or older most likely does, as he use to own the late night infomercial space in the 1980s and 1990s with his real estate investing infomercials. Maybe he still does, but I don’t watch much TV anymore, so I don’t know.

Anyway, I’m about to contradict my “buyer beware” warning, because I actually owe some credit to the video tape training series that Sylvia and I watched in 1994. And the “one tip” I followed that led to my first investment property. So I don’t feel ripped off at all.

What was the tip? …

“Tell everyone you know that you are buying real estate, and ask them to let you know if they hear of anyone selling”. That was it. I thought, “ok, I’ll do that”.

So, I told my Mom and Dad, who also lived in Austin, “if you hear about anyone selling real estate, make sure to let me know”. Low and behold, shortly thereafter, the 90-something year old mother of one of my Dad’s friends from down at the Moose Lodge died, and my Dad told me the friend would be selling the house and gave me his name and phone number.

Sylvia and I met the son, himself in his late 60s or early 70s, at the house on Avenue G in Hyde Park. He didn’t need or want the house, and was planning to meet his Realtor the next day to list it, but said he’d just as well sell it cheaper without having to do any work or spend any money making it ready or pay a commission (a more common sentiment among sellers than most would believe).

As Sylvia walked through looking at the bedrooms, kitchen and bath, I didn’t make it past the living room.

“How much are you asking?”, I said. He said, “Fifty Eight Thousand. Not a Dollar less”.  I said, “We’ll take it”, as I pulled my checkbook out of my back pocket to write him a $500 earnest money check.

No market analysis, no spreadsheet evaluation, no inspection. I hadn’t even left the living room yet. It seemed like a fair price for the neighborhood, and what I learned from my video tapes was that, when you find a deal, “just get it under contract”. So that’s what I did, not knowing in that moment how I would actually buy it. This is what they teach at seminars.

I got my parents to co-sign a loan, and, since I was flat broke having just graduated college and starting a new job as a computer programmer (after my “gap decade”), I took a $6,000 cash advance from a credit card for the downpayment and repairs. Looking back, I bought that house “zero down, with other people’s money”. Another thing they teach at the seminars, but mine was mostly accidental, not planned.

The payment was around $500/mo, we leased it for $800/mo, kept it 18 months and then sold it for $92K. Then used the proceeds to buy another house for $60K one block off S. Congress in the ’04, which we flipped for $130K, then bought another, …

And we’ve been buying and selling real estate investments of our own in Austin ever since, including one I just purchased, owner financed, in SW Austin. I told that seller as well, less than 5 minutes inside the house, what I could pay and that I could close in 10 days (which we did yesterday), and he said “sounds good” and we did the deal.

I guess even 22 years later, I still owe a bit of credit to Carlton Sheets and his video tape training, because as I think back to all of mine and Sylvia’s deals, a lot of them were made on the spot, in an instant, without hesitation or any “thinking about it”.

This is why, today, when helping other investors buy in Austin, we unfortunately end up firing some because it becomes clear at some point that they are just not capable of making the leap of faith required. Since we are so low pressure and chill, we don’t push buyers into anything. But we will cut them loose when they sink into “analysis paralysis” and won’t listen to our advice. But I digress.

So, my point is that I’m sure more than a few people can attribute the nexus of their real estate investing success – that first domino that fell, that first planted seed of an idea or tip – to something they in fact learned at a real estate seminar, or from books and tapes they purchased. Let’s at least admit that, because people like me are proof. The books and tapes lit my fire.

The vast majority of people who spend money on these real estate investing products will simply have wasted their money though. The VAST majority of them. Same as the Trump lawsuit people. Attending the seminars and buying the books and tapes will leave many feeling cheated or ripped off.

Most people simply can’t do it. But they don’t know that when signing up for the real estate seminar. Well, … part of them knows, and doubts it, but they hide, suppress or deny that truth while under the influence of the intoxicating promises of the marketing messages. Those marketing messages make believers out of dreamers. Those believers fall under the spell of false hope and the lure of “big bucks”. People should know better.

Do I fault Trump University, or other huckster seminar traveling sales shows, including many outside real estate? No.

I do not think people who, of their own free will, enroll in a paid “Guru Training” for real estate investing, have anyone to blame but themselves when it doesn’t turn out well for them. If you pay thousands to learn how to invest in real estate and never in fact do a single deal, then you’re not alone, but it was your decision alone to take that risk when we all know the risks.

A safer way to invest in real estate in Austin is to find and hang out with other investors and learn directly from them, or hire a real estate investor Realtor, such as us, to help you decide if it makes sense for you.