"3 Hours Worth of Work for $10,000" am I doing something wrong here?

Question

I keep watching these "guru" videos and they say "3 Hours Worth of Work for $10,000".  My question is, what are they not doing that I AM, or what am I doing that I SHOULDN'T?

I walk my neighborhood daily and end up with a list of 10 more houses that are either: abandoned, realtor for sale, condemned.  I take this list and pull the info about the house.  This is hours of work.

A few of these gurus, are like, yes, I spent 90 seconds in the house and drove down and wholesaled it for a cool $7,0000 after closing, for a mere one hour's worth of work.

It takes me more time to pull of comps on houses than that.  Mind you, I pull up the clerks office, registrar, recorder and look at all the transactions concerning the property.  Then I pull up the comps.

What are these gurus doing that I am overdoing?

Jon Holdman · Answer

A better question is what are these gurus really doing.  Maybe they really do spend only a few minutes on one particular house and collect a big paycheck.  What they're not saying is that they spend the same few minutes (or, three hours) on dozens or hundreds of other houses and make nothing.  If they could consistently make $3,333 an hour WHY ARE THEY STANDING IN FROM OF A ROOM BLABBERING?  If I could make $3,333 an hour, I'd be working 12 hours a day, seven days a week.  I'd make $280K A WEEK!  I'd do it for a year, make $14.6 million, pay the taxes, buy a house in Vegas and one in Miami Beach and drink mojitos all day.

Is it possible?  Yes, maybe.  If you do 100 deals, you are very likely to hit a few out of the ball park.  Are you going to find ten possible houses and hit one of those out of the park?  Possible, but probably not.  If these guys actually did such a deal, then it was because they built up a whole infrastructure and business to be able to do that deal.  Its because they waded through thousands of prospective houses, sellers and buyers, did a bunch of much smaller deals and had a few home runs.

Wholesaling is hard.  Really hard.  You will spend a lot of time and effort and maybe eventually do a deal or two.  Birddogging is even harder because you're making a much smaller paycheck and the buyer and seller can easily cut you out of the deal.

You might think about getting licensed and getting a job as a RE agent.  Its essentially the same job as wholesaling and briddogging, but you have the law on your side and an infrastructure behind you.  These gurus are selling a dream.

Don Konipol · Answer

I have been investing in real estate for 30 + years in all kinds of markets and have seen all kind of gurus with all kinds of product - come and go.  For what it's worth here are my observations.........

1- 80% of the information on investing in real estate being sold ranges from totally worthless to incorrect and or possibly illegal

2- another 10% might work under some circumstances but either the recipient of the information needs a much more educated and experienced background than he is led to believe or the circumstances regarding the success of the method being sold are limited to a certain geographical area or a certain type of market

3- the 10% of information that has value requires work, dedication, persistence, education to be used successfully.

4- Certain types of individuals can self study utilizing free information available online and learn as much or more as any program or course will teach them

5- most gurus are not currently successful using the methods they teach; they may have once been successful in a particular type of market or in a particular location, but they are not currently utilizing the method they teach successfully.  This is because most of the "methods" are not based on solid, long term principles of real estate, they are methods that worked for a short period of time due to a market abberation.

6- most people who purchase a course or program will intially defend it vigorisly against any negative comments.  only after they have totally given up will they be willing to admit even the possibility that the information is not workable. many will still excuse the guru by repeating platitudes such as "you have to work the program" or "its a good program for the right person".  This defense may even go so far as the person who has just purchased the course lying about their success - although they have not closed a transaction.  Any opinion to the contrary given by anyone else will result in the accusation that "you are trying to stop competition because you're afraid we will be successful" or "everybody has to start somewhere " and they will tell each other "don't be discourage by negative thinkers".

7- the best education in real estate comes from courses given at colleges and or by realtor organizations or by CCIM.  The crazy promises are omitted, the hype is left out, and a truer more rounded picture of the real estate industry is provided. additionally, these courses provide information on the fundamentals that are so neccessary as a base for success - but which are either ommited or glossed over by the gurus selling the latest "get rich with no real estate experience" method.

Will Barnard · Answer

Kevin,
The key ingredient here is the "guru". By definition (ours here at Bigger Pockets)they are glorified slaemen who make everything sound easy and that with just a few clicks of your mouse and a phone call, hundreds of thousands of dollars will fall from the sky!

The real truth is, if it were that easy, everyone would do it and there would be no gurus selling their products and services, they would be out working a few minutes each week to make their easy millions.

I have received emails from my contact for REO deals, spent 20 minutes or so doing some paper due diligence, made a 2 minute phone call stating send me the contract, executed the contract, send out an email blast, read 5-10 quick emails, locked up a buyer and walked with $10k, $20k, and even $40k in profits. Do I do that every day, of course not. I spend coutless hours researching properties I never buy or even make offers on, and plenty more completing due diligence on other potential deals that I do not do. So all in all, I spend a lot of time on a lot of properties so that I can get that one deal done and closed.

Can you wholesale a deal and walk with $10k profit? Of course, I do it many times a year which is aside from the many more I keep, rehab and flip myself. Hard work pays off and you must put in the hours to make the money. I can easily work 70 hours a week or more but I also have the option to work 2 hours, that is the freedom you get once you have been doing this for a while.

Moral of story, DONT listen to guru blabber and nonsense, if it sounds to easy to be true or real, it is!

Jon Holdman · Answer

I don't believe wholesaling or any of the other real estate JOBs are dead.  Or that its impossible to make a nice paycheck when you close a deal.  Or that you might spend only an hour or three closing one specific deal.

I don't even have a problem with someone spending $1000 on a "course", if that course provided real value.  Ongoing training is a fact of life in many industries.  My day job is high tech and we have a huge training department.  There are many third party companies that offer training on our products.  And both my company and many others offer consulting services on using these products, often with some pretty hefty price tags.

But I've never seen anything in any of these offerings that shows the trainer on a beach with umbrella drinks and attractive women.

The problem I have with much of real estate training is that its filled with this "quick and easy" hype Kevin is asking about.  And its not filled with actually workable techniques.  Even if you're paying thousands of dollars for training, if you get information that's actually useful to you to do your job, whatever that job is, its worthwhile.  Look at the price of a university degree!  If you pay thousands of dollars to be told this is quick and easy and you'll see that for yourself right after I give you a few teasers and convince you to sign up for more training, mentoring, boot camps or whatever.

Will Barnard · Answer

Also, people reading this quote should be aware that it is the viewpoint of someone who also provides coaching services.

Account Closed · Answer

Investing in today's real estate market is hard work, there are a lot of people trying to find houses to buy way below market value. In the Phoenix area investors are coming in from Canada and paying full price at the auction because they know we are at the bottom or close, they know the properties will go up so their strategy is cash flow.

How do you compete with all the professional investors out there? The answer is you don't.

I invest in real estate using a technique called "The Sandwich Lease Option" which allows me to invest in real estate with out using any cash or use of my credit.

I make money immediately, I make a monthly cash flow and I will make profit in the future when the buyer refinances the property.

I am able to pick up the properties everyone else overlooks...It's a GOLDMINE.

Marv Rousselow

Paul Holman · Answer

I was trying to see what 'guru' could stand for... God-UR-Useless - any others out there?

Account Closed · Answer

Like that aggressive Armando guy on flip this house who has 30 minute infomercials on Sunday mornings, opposite Meet the Press... I always wanted to know what a guru's product looks like and have sometimes been tempted to order his stuff. I wonder if I gain 20 lbs and put on a shiny button down shirt if I can sell books on tv too. The closest thing I have ever gotten to subscribing to a real estate program is my membership at the Chicago Public Library.

Anson Young · Answer

I've had numbers like that....  But rarely.

Find a house on MLS, go look at it while having agent write up my offer.  Sign with mouse.  Make 2 phone calls to sell it, dont really think about it until week before closing.  Line up transactional funding.  Go to closing.  Walk with $9k.

Probably less than 3 hours of work.  But it was a huge amount of luck and timing.

Usually its: surf MLS in 2 metro areas for a solid week, make 30 offers, send 130 emails, get one-two, spend next 2 weeks marketing it.  Pocket $2-3k.  Per hour goes way up at that rate.

Will Barnard · Answer

I work in higher price point market areas (southern CA) and as such, my standard wholesale fee on a regular deal is around $10k, and I have made as much as $40k on deals in the past, it all depends on what the market will bear and how good of a spread you locked up in the first place.

"3 Hours Worth of Work for $10,000" am I doing something wrong here?

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