Real Estate Rip Offs?
In the past couple of weeks I have spoken with an alarming number of people, male and female who have spent ENORMOUS amounts of money on real estate courses and systems and still have no idea how to get started. And if they did know how to get started, they couldn’t, because they have spent all their money on real estate COURSES instead of on real estate.
In my area of Florida, we are blessed with real estate trainers who have been in the business since the 60s and 70s. These members of the Old Guard, as I call them, keep the prices of their courses affordable — usually around $500 for two days — for the average person. More importantly, when you go to one of their seminars, they are actually TEACHING you how to do real estate, rather than bringing in ten speakers to sell you more real estate courses.
The problem is that they are low priced, not flashy, and definitely not the polished marketers you see hawking glossy, shrink-wrapped multi-media packages. They don’t have professional hucksters doing a dog and pony show two weeks before they hit town so they can fill up the local auditorium. And they don’t sell you into a $25,000 boot camp.
The reason I am so pissed off is that I have spent too much time listening to people debate whether or not they should spend $99 on a one day seminar my sig other and I are putting on this weekend. Quite frankly, I am tired of hearing that they spent literally tens of thousands of dollars with some big-name guru and now they are not sure if they should spend $99 (or $24 for a book) with someone else. The first few times I heard it, I was sympathetic and tried to give them some good sources to get inexpensive information. After all, they had just been cleaned out by the guru. But I am changing my tack. My response to them now when they are debating purchasing my (or anybody else’s) product: “Don’t buy it. Call the guru you spent all that money with and ask them for help.” And I think, “Let’s all hold our breath until he calls you back.”
Is that mean? Absolutely. But not nearly as mean as taking $30,000 from someone that you know is never going to do a real estate deal.
There is a theory that the more money someone invests in something, the more likely he is to take action. And I think that is true, up to a certain level. Marketers talk about bringing prospects into a sales funnel and developing them as clients. You start people with a relatively low-priced item, usually under $100, move them to a $300 or $500 product, then to the $1,000 level and so on. Most sales funnels as far as self-help and investing tap out at the $25,000 - $50,000 range. But, the people who end up at that level are people who are in that business, making money and looking to move themselves into the professional strata. Using a funnel system, people get a feel for what they are doing, decide if they want to continue on and self-select to take themselves to the higher priced levels. The trainer has built a relationship over time with their client and has obviously given them valuable help and information or the client wouldn’t keep spending money with them. Taking someone who is brand new to an industry, whether it is real estate, the stock market. or even acting and selling them into a $25,000 product immediately ends up breaking their bank and their confidence. It is a one-hit sale and it is a big hit.
The other side of that coin is that if something is not high-priced in today’s marketplace, it has no value. People equate price with quality. So trainers who try to keep things affordable for their clients find that they are shooting themselves in the foot. I know of one real estate guru who charges $25,000 (actually more now) and has been in the real estate speaking business for almost four years. Which coincides exactly with the real estate boom. He has no depth of experience, and certainly no experience with a down real estate market. But he is flashy and smooth, gives VIP service to his clients on all the superficial stuff like picking them up in limosines and having lunch catered. His real estate expertise is maybe two notches above his newbie clients. But because he charges so much money, people think he knows more.
From all this, you may think I am against the high prices charged for courses and boot camps. But I am changing my mind on this issue. I can tell you right now why speakers and trainers charge outrageous prices. It is because they got tired of listening to people debate over whether or not they should spend the money to educate themselves. Time is money for most of us. And spending more than ten minutes on the phone with someone who can’t decide whether or not they should spend a hundred bucks wastes more than a hundred dollars of my time. Charging $5,000 for a seminar makes it worth my time to help someone through that should I or shouldn’t I debate.
Bottom line? Well, there may be more than one here. First, if you are new to something, if you want to learn, start off by reading books on the subject. Most books are under $30 and many can be found in the library, on eBay or half.com. Meet with people in the industry. See if this is something you actually want to do and more importantly, something you have some talent for. Don’t jump into something just because there is a boom going on. If you are not in the industry and are just hearing about the boom, pretty much you have missed it. Take a long-term stance. Figure out what your interests and talents are and go in that direction.
The second bottom line? We are raising our prices for seminars and counseling. Anything that takes us out of our house is going to cost money. Why? To have someone trying to bargain us down on an already low price is insulting and wastes our time. Time is the most valuable commodity we have.