Feel free to laugh with me (or at me, whichever) as I begin my journey into real estate investing...
So I went to a “free investment advice” session, found via Instagram. Must be legit. Doug Hopkins, star of the Discovery Channel's hit tv show Property Wars wants to make me rich.
I get it, I know the sales tactics and pitches. I, along with the founder of a fledgling social good technology startup hell-bent on changing the world raised a sizable seed round of equity financing from private investors in New York City, many of whom scared the daylights out of me and their employees on a minutely basis. The story we told was a compelling one, even for those hardened hedge fund boys. Needless to say, I know a good story when I hear one.
I listened to the smooth talking friend of Doug Hopkins tell us how we could create a brand new life for ourselves through their tried and true investment strategies, all we had to do was sign up and put down the investment in ourselves of $2000 (reduced from the normal $5000) required to attend the 3-day accelerator event that would tell us all we ever needed to know about real estate investing. They used all of the tactics (emotional appeal, cheap suits, bad cologne) to reel us in and guess what, I was hooked!
I'm not a slow person. I knew it was a sales pitch from the get-go (the session was free in a world where nothing is remember?), but that fact was trumped by the idea that these guys could connect me with lending partners that would put up 100% of the value of home and let me keep the profits. Not to mention that they had access to listings for REO and pre-foreclosure properties that don't show up on an MLS listing. I wanted those listings. This seemed like a plausible way to get them quickly.
After the emotions and thrill of the chase that the smooth talkers evoked in me subsided, I did what I should’ve done in the first place - looked. I looked online for other resources. Not one said - “Hey, paying for gurus is a great idea, well done!” I told my uncle about the event - he scolded me and said, “You better get your money back. Like now.” I agreed, so I did. No harm no foul. (As a side note, when I called to get my money back, the gentleman on the other end of line offered to reduce the price an additional $1000 for relocation costs - lesson learned, they can always go lower.)
The questions I have for the Bigger Pockets community are:
1) Was I wrong in thinking that access to lending partners willing to put up a high percentage of the property value (regardless of personal credit) was something to be valued? And if not, what channels are others using for access to capital (especially those that have student loan debt to choke down every month and few assets to their name)?
2) Is it worth it to pay for access to curated listings of pre-foreclosure and REO properties as a newbie who doesn't have the connections for access elsewhere? What methods are others using to gain access to these same listings without having to pay for them?
I'm curious to know everyone's thoughts...until next, time happy investing.
