Beware Get Rich Quick Real Estate Deals
This may sound a little far fetched but many people have seen those infomercials and advertisements for the real estate game. You know the ones I’m talking about, get a set of books, CD’s and videos and you can start investing in real estate and get money for quick turn around real estate deals.
They have testimonials where people say they earned so many dollars, as much as ten to twenty thousand on one deal and it only took them a month. After years of this you can earn millions. I have news for you.
You can earn millions doing real estate deals, but the one person who is sure and guaranteed to be earning money off this kind of deal is the guy selling the set of real estate or get rich quick with no money down books, videos and CDs.
Yes, I am going to say it, this is not the deal many hope to it is. The people who are selling this have no wish to help others get rich, why would they. They are getting rich, or trying to, but not by selling real estate.
Real estate is a hard career and making money in it is work, hard work. The seminars, late night TV commercials and other ways you hear about these schemes are not all their cracked up to be. You have to realize some real world things that happen in real estate to understand what is going on in these quick turn around or no money down deals.
There are all kinds of deals they talk about at these seminars or on these types of get rich quick deals, there are a few things that require your work but not your money. A couple of schemes you find a property that is going up for sale or is close to being foreclosed and you get someone else to buy it. Or you find a fixer upper, buy the contract for it and turn it over to a company or individual who will do the remodeling and you take a cut of the deal.
You can do things with property that does require money, such as buy homes or condos, fix them up in a month, before all those bills start to come in and sell it for a huge profit. This rarely happens as well as they like to tell you. The whole process of selling a home takes months, not days or weeks. If you can get the whole deal done in a month, your awfully lucky.
Yes, you can get rich on some of the deals they are talking about, but you have to be either lucky or persistent. To make the kind of money they want you to think you can make you need to have the luck and the savvy to guess the market. Not the knowledge of the seminar or plan they are selling you.
And how much does this whole thing cost you if it is no money down, you just put money down for the knowledge these guys want to give you to start with. That is the first thing they don’t want you to figure in about your cost. They are getting the first benefit from your interest in real estate. Some seminars cost in the thousands to join, and then you walk out of the seminar with a little knowledge and a few books.
Then they don’t tell you about your time, time is money. Let’s face it, if you spend time on something trying to make money, you have to figure out how much your time is worth to see if this kind of thing is for you. If you spend a weekend, let’s say two days at six hours a day finagling a deal like they talk about, and earn a thousand dollars, you’ve worked for $83 an hour.
That’s a lot of money, but this type of deal is very rare. Yes it does happen on occasion, but it is more likely that you will spend weeks looking for a buyer for that property than hours.
There are some things these real estate gurus do not tell you about in their seminars, books etc. You are at risk for the property, and it could cost you. Yes, you can make money for this kind of turn around. Your basically acting as an agent and finding the property and then finding a buyer or someone interested in fixing up the property.
But you can loose your shirt just as easily, or even worse the property. If you find a property you know can be a good fixer upper, then cannot find that person who said they were interested in the property, your stuck with it. One way or another you have to deal with it if you can’t unload it. That is the biggest risk in all these schemes. Getting in the middle of the deal and then the person who you were hoping would take over the contract, mortgage or lease and you have the property with things like bank payments, insurance and taxes due.
Oh, that’s another thing they don’t like to mention much in these deals, you are the one who has to worry about all that niggling tax stuff. If you get stuck with the property in a deal, you have to pay the taxes along with all the other things.
The things they don’t tell you about is what you have to worry about, not the things they like to brag about. For instance what is the reason the property is up for foreclosure, is it damage or is it the money problems of the owner. You have to find these things out in advance, or you could find out the hard way in the middle of a deal.
Many of these schemes take money to start, you need to find buyers for your property and you need money to do this. Running ads, buying papers, pamphlets or brochures to hand out about properties all require your money. Even if you say I have a computer and can do it for free, it’s not free. Ink costs, paper costs, and your time is valuable.
One of the big things in this business that is very bad is that these people are talking about real estate deals that are for anyone, anywhere. Not in your county or city. Laws and real estate go hand in hand. The lawmakers of this country try hard to protect people from rip-offs and there are laws that help them and you.
There are real estate laws and you may not be told by the gurus that you can or cannot do certain tings in your dealings. A real estate agent would know, but you just bought a book or went to a seminar from a guru from some other part of the country. He may have a person from some local realtor standing next to him, but it’s a sure bet that agent is getting paid to be there.
Real estate is a big business, people earn millions every day in this business. People also go bankrupt and broke in it. If you get the real estate bug and want to get rich in it there are some better and less costly ways to do it.
First, get a real estate license. This may sound obvious but it is a better way than buying some book or way better than going to some seminar where some guy who no one knows comes racing in to tell the speaker of the seminar that they just got a check for thousands of dollars and he just had to tell them all. Yeah, right.
If you want to know things about real estate, go to a local community college and take a course in real estate. Don’t take some seminar from someone who will be here for a week and then gone onto his next seminar.
A real estate course from a legitimate college will give you real advice and local laws about your interest. Laws are an important part of this type of business. Not knowing them could cost you not only in lost deals but in fines if you violate the law.
Don’t think you can get rich with no money down, or no work, it all takes work. You can’t spend a weekend doing a deal or not risk any of your money, just to take the course cost you. Sweat equity is a real part of all these deal, if you work for the deal and run around or even find a fixer upper and get it in shape, that’s all work you’ve done to get the deal completed.
You have to figure out how much time was spent on the deal and figure hours and pay for all of it. Ask a realtor how much time it takes to close a deal from start to end, he’ll tell you a month is way low. If you do hear of ones that take that short a time, I’ll show you a dozen that took six months from start to end easily.
Money Magazine says that realtors close on one property for every hundred they see. Seasoned realtors work at a regular job of real estate to do these kinds of deals, and have earned their license to do so. They do not rush into real estate deals without some risk. But they learn through real work how to lower that risk and use good sense and knowledge they learn from proper courses such as at a college.
For information from someone who has invested his time in checking out many of these gurus and schemes check here:
http://www.johntreed.com/Reedgururating.html
John T. Reed’s website is very informative and quite interesting to read about these gurus and their claims.
