All Forum Posts by: April C.

@April C.

Almost every real estate training program is a scam. If you want a real education in real estate get a degree. It will cost less and you can do something with it 

All the education programs have certainly put more people into multi-family, which has probably driven up competition, and prices. But, if these programs are teaching their students how to underwrite properly, AND they choose to stick to the teachings, perhaps it keeps them from being the "dumb money," and paying too much. What I mean is, if they were pursuing the same deals without a mentor, then they might be paying even more, driving up market prices even further. It's hard to really know for sure. Any comments about the overall effects are just opinions. 

@April Ceng yes sometimes there is manipulation of people trying to learn something new. I have found myself in a few of those classes! If you are looking for free education in Multifamily, I recommend you listen to Michael Blank and use his resources. TheMichaelblank.com

Most of the responses are about whether any education program is worthwhile. I am going to address the other part of the question...

When I first started studying real estate investing, I thought it was quite odd that an investor would sell a property to another investor. Why not sell it on the open market and get top dollar from a retail buyer? Lots of reasons, actually, such as a faster close with a cash buyer, and some properties are simply only bought by investors, such as apartment complexes.  

When I was considering joining an education program, it was hard to wrap my head around the idea that a student would sell a property to another student. Is a win-win transaction possible? Isn't the best way to make money to either buy at a discount (if you're a buyer) or sell to someone who is overpaying (if you're a seller)? With multi-family, it is standard practice to leave some "meat on the bone" for the next buyer: you make some improvements, increase the income, and then sell it for more than what you paid a few years later. The next buyer repeats the process. You don't make every improvement possible, because then no one else would want to buy a property with no upside left. As long as the underwriting stays conservative and is in line with the market (not the hot market of the last several years, but the historical average for that area), it is possible for each buyer to make money. Eventually, there will be a downturn. Multi-family here in Texas has been on a tear in the last 7 or 8 years or so, maybe longer. Everyone knew it wouldn't continue that way forever. Will the last buyer end up being the greater fool who is stuck with a piece of crap when the music stops? If they overpaid because they thought they could continue to raise rents 4% a year, then maybe. If they were conservative and budgeted for flat rental income, or even a decline, then they might be fine. 

Anyway, back to the original question. If the students of the program were only selling properties to each other, that would be suspicious. But if only 1 out of 3 or 4 transactions involve a student selling to another student, and the rest are buying from or selling to outsiders, then I don't think it is necessarily cause for concern. You could even decide never to invest in a deal where the property was bought from another student, and still have plenty of opportunities left, if that made you more comfortable. I know of investors who invested in a deal, made a bunch of money when it sold, and chose to invest with the new buyer again in the same property!  

 I like this line. I happen to know which event @April C. attended, but even if I didn't, my response would be the same. Yes, the same information that a mentor will charge you for is available out there free from other sources. But plenty of bad information is also out there for the same cost, and often on the same forums or in the same types of books or YouTube videos. The real value of education is knowing which knowledge to apply and when, if any of it needs to be tweaked for your specific situation, and which needs to be disregarded altogether. Sure, you can become just as knowledgeable on your own through your own research and personal experience. But many decide to pay for a mentoring or education program because it significantly compresses the learning curve. If you could become an expert in two years on your own, would it be worth paying someone to get you there in six months? For many, the answer is yes.

Lifestyles Unlimited is an education and mentoring company. It is not a multilevel marketing company. Lifestyles Unlimited teaches a very specific investment model, and has no investment or other interest in any investment members make. There are a lot of events where members can meet and get to know each other while learning - in person and online - and after 30 years in business there is a large community of investors from across the US and several other countries surrounding Lifestyles Unlimited. I have made great friends at Lifestyles Unlimited. For full disclosure, I am the EVP of Lifestyles Unlimited and a long time member.

@April C. that program sounds like a Broker Dealer for syndicators if they are matching you up with syndicators. There is a fine line the SEC does not want crossed. Education and Mentoring and networking opportunities to meet people and learn is different than Education Marketing where the purpose is to give you some education but the end game is you invest with the presenter or owner of the business. It’s wild if you pay them to then invest with them. If someone says they are the “go between” or something like that they are raising money for syndicators and either being paid for raising money - check to see if they are a licensed broker dealer or just ask them - or they are part of the management of the syndication allowing them to raise money. I have seen people get in some significant problems with the FCC, FTC and SEC by doing this illegally. Often they have not taken the time to understand securities laws regarding syndications- pretty common for smaller syndicators of Multifamily. I emphasize this education because getting it wrong can ruin the lives of syndicators if not their investors.

Nothing wrong with being skeptical and taking the time to sort out what is going on before committing to anything.

Hope this helps!

You had me at "I attended a weekend training program offered by a multi-family investment club." I didn't need to read anymore. If you are holding weekend training programs, there is going to be an ask and it's going to be bigger than the free lead-in course designed to hold the true value for the big payments. It's like when someone offers you a free timeshare, you know it's not that. You aren't overreacting, it's all MLM all the time. The best value you will receive is one-on-one and in small personal masterminds where there is no ask on top of an ask. You don't need to pay for coaching or mentoring until you are doing business and want to expand it and take it to the next level. You can learn everything to get started for free here in the forums, on podcasts, and by building one-to-one relationships here and at REI meetups.