Here is my 0.02 cents on LU inc.
First about me. I have no RE investing experience and have not attended any other training other than LU inc. I consider myself to have a lot of common sense and have thought off and on about buying SF homes to hold as rentals, but never gave it too much thought beyond that. What I did know, was that it isn't rocket science and that others in the world were doing it, so to could I.
I had an inside track on LU inc from a member, who happens to be a friend of my brothers outside of LU inc. My brother is not a member. Knowing this members success of nearly 100 doors (SF/MF) over a 3 year period and knowing that he is a stand up guy, I decided to attend the free informational presentation. I knew going in that I would be upsold, as I knew that they are a business and they have to make money someplace.
Sure enough, the sales pitch came, $500.00 for 2 years. BUT, this was a special deal for today only as it was the presenters birthday and he had spoken with the mystical "Del" and gotten permission to offer this deal. I did not join that day. After the class I got a few emails encouraging me to "take action now" the sky is falling kind of stuff, as if I didn't get in now, I would never have another opportunity.
About 20 years ago I worked in a business that there who deal was selling, although I was not in sales, so I knew of some of the games and tricks sales people use to close sales. I wasn't too worried about letting the "deal" slip away. Two months later, I contacted the presenter/sales person to ask about who they reccomend for FICO improvment. I was told that I had to join to get that information. A few weeks later I decided to join to get this secret access to the FICO professional and to attend the 2 day classs to see what I could learn. Funny thing, when I went to the office to join, it was still $500.00 for 2 years. The person who signed me up acted as if she were extending me some special courtesy and might get in trouble for doing so. I told her that the "special" was insulting to anyone that knew the basics of sales and closing sales.
For $500.00 I get the 2 day class, which is a boot camp for REI, 1st day on SF and the 2nd day progressing from SF to MF. I learned a few things in the class, such as the formula that they use for property evaluation, but not much was new to me as I had listend to every podcast that I could find prior to going. They are careful to not give away the farm on the radio show, but if you listen enough and can put 1+1 together to come up with 2, then you can put the basics together. You also get access to other classes on property evaluation, guest speakers on a wide range of topics, who I suspect have a dog in the fight, as they are vendors. You get unlimited telephone access to "junior mentors" who are not real estate agents. They claim you can call and be walked through anything at any phase of your deal. The will not however evaluate or opine on any deal, claiming they can not do that because they don't know if one of their realtors is working the same deal with an upgraded member (More on upgraded memebers below). You also have the ability to sign up for Lifestyles Quest, an online tool that imports data from the MLS for comps, rent comps etc and formulates the final estimated numbers on the deal that you are looking at. This access cost $79.00 a month + tax and is only for the DFW, Houston & San Antonio/Austin markets. They teach you how to do the evaluations on paper, but claim, that it does require that you find a real estate agent that is willing to work with you by providing comps "quickly" the way that you want the comps and who is willing to put in multiple offers on small priced sales. They are claiming that they are putting this power in your hands with this tool and then you only have to find an agent who is willing to put in the multiple offers to compete with all the other investors.
BUT, for the low low price of $5,000.00 you can become a challenge member and have one of their realtors do all the work for you. Mind you, this is a special for today only, "I spoke to Del late last night for hours to convince him to let me give you this special, it is regularly $6,000.00." What they don't say until you go to sign up (and no I had no interest in signing up) is that it is $5,000.00 for the first year and $1,000.00 for renewal charged all at once for a total of $6,000.00. Which shell is the pea under? (another insult IMHO) Now if you are the type of person who can't decide to get out of the way of speeding bus, I suppose this might be an ok deal. My opinion is that they are likely working for too many investors, and you would be better off going and finding a hungry RE agent. Which, if you rub a few elbows in the class, you will find that there are RE agents sitting right there among you.
The challenge membership gets you a a babysitter if you are not able for whatever reason to do it yourself, be it lack of motivation, common sense, time, skill, education... They will find deals evaluate it and blast it out in email for the hounds to fight over. They evaluate it using Lifestyles Quest (remember $79.00 a months + tax), so you can do it yourself. If you call them directly or go to the office and sit down with them, they will locate deals directly for you to evaluate and make offers on. They do not allow one LU memeber to compete with another LU member on the same property if you use their agents, and strongly discourage you by contract not to go to an outside agent with anything they give you. You also get to attend SF roadtrips, where they go out and evaluate properties on site and vendors give on site classes on various topics about REI. At the end of the trip the hounds have a chance to put in an offer on the properties visited. If there is more than 1 member intersted in the property, they draw cards to see who gets to make an offer. Some properties are MLS listings others are wholesale deals.
OR you can become a PIG for $10,000.00 on sale of course from $12,000.00 just for today. You had to pay for the following years membership at the same time, but don't remember what the price was. This is is for those who want to do MF. They will not let you be involved in MF as a passive or lead without being a PIG. They claim you need education and credibility, which can they can teach you.
Interestingly, both Steve Davis and Del Walmsley came from selling gym memberships 22+ years ago, I can't help but think that they got this idea of adding on the second year up front from that. Most people sign up and don't follow through, money in the bank.
What you get being a PIG is 200+ hours of classroom training, some certifications on APT MGT and they will evaluate the deals from start to finish. They will take the available and willing PIGs to the property to walk each unit, find ways to cut cost without cutting quality, audit leases, losses, projects rent increases as the property is rehabbed, project RUBS, they whole works. Unless you are on point doing this yourself or want to hire someone to do it for you, I would guess this would be an OK deal, but purely a guess. It is not need for SF and they tell you so.
In the other thread about LU inc, someone brought up the smugness of the MGT & office staff. They are people, in every group you are going to find different personalities. I did find it to be true that some of the people working there seem to walk around as if they are the **** of the walk, but all seemed nice enough and willing to talk to you and answer any questions. There were certainly a few peacocks, chest out, feathers showing.
As for the mystical "Del", I have not met the man, and really have no interest in doing so. I am not a sheeple, nor a Koolaid drinker. There seem to be plenty of people around there willing to kiss his... he doesn't need me. He may be a real nice stand up guy, I just don't have any interest in going out of my way to schmooz, not my style. I can say that it seems a little cultic when it comes to him.
They do teach "best product, best price" and screening tenants to keep your expenses low. This, as others have said, involves replacing anything that might be a problem. Further, they advocate getting out of the SF properties within a few years, taking the equity capture to MF, so long term expenses are not an issue if you follow that advise.
Oh... I almost forgot, remember that FICO professional that I was seeking? Well when I called the junior mentor to get the info, I was told "I could get in trouble for giving you this information as this person is not a LU vendor". Well then why did I have to sign up to get this information if it isn't a LU secret?
Overall, for $500.00 I got a basic education and a map to proceed on. I get to call up someone on the phone and ask them questions to help me from making mistakes, I can go rub elbows & even worship Del if I choose. There are continuing education classes and I have access to the vendors list, which I think is a little sparse. I am guessing this is because they charge to be in the list (so another poster says).
IMHO, it was $500.00 well spent for someone with no education or experience in this area.
For the record, I am a member of LU inc at the lowest level, I am not an employee of LU inc, nor do I ever want to be. This is my first post, but I suspect that this will not be an issue, because I do not think that they walk on water.
One thing that I thought was careless about the 2 day class, is that they "suggest" people cash in their 401K or IRAs and other investments, take the penalty and make it up in RE. This seems like a personal financial decision that shouldn't be promoted to the masses, considering the masses are blinded by the hand picked examples of the great wealth to be made in RE. They did not show or speak of one failure.
That is my 0.02 cents.
Questions? Would anyone like to sign up today?
