The prospect of investing in real estate can be intoxicating. But you don’t have time to study and become a realtor, and you don’t have millions of dollars in liquid capital with which to invest. “But don’t worry,” sparks a familiar voice on the radio, “my name is Famous Real Estate Personality, and I’m looking for a select few, highly-motivated individuals to learn my tricks of the trade and make millions investing in real estate using other people’s money. Come to my free seminar…” And just like that, you’re hooked. It’s as though this real estate celebrity is speaking directly to you. You’ve seen their show, you know the lingo, you’re highly motivated. What do you have to lose? After all, it’s a free seminar! What you’re most likely to lose is your valuable time and money, and you’ll probably never end up meeting that celebrity. After the dust clears, you may just find yourself wishing you’d left buying houses in St. Louis to the professionals.
Before we delve into the allure of the free real estate seminar, let’s clear something up. If you’re planning on becoming a licensed realtor or taking a job in a real estate office, you need not be concerned. Becoming a real estate agent proper is hard, grueling work, but it is in no way a scam. If you are a real estate agent, you likely know firsthand that you don’t have time to travel the country giving free seminars. So how does this person do it? Well, the first thing you probably noticed, assuming you’ve been drawn in and have found yourself seated in a hotel ballroom, is that the presenter is not the real estate celebrity who spoke excitedly to you on the radio. The presenter may tell you they’re part of the Real Estate Personality “Team,” and maybe even roll a short video from the personality addressing you and the other prospects, but to be blunt, they are not involved. There’s a reason that that celebrity is, well, a celebrity—it’s mainly because of their television show, which they shoot year-round and travel nationwide for. It’s the television show that pays their bills and not, in many cases, the profit from their real estate endeavors. The same is true for the presenter in front of you: they’re not a real estate investor, they’re a salesperson. And the closest connection they have to your favorite real estate celebrity? They mail them a commission check every month for lending their name to this seminar. The celebrity has no personal stake in the quality of the information being presented and has only provided a celebrity endorsement to a completely unrelated company. An unrelated company? But what are they selling? It’s a free seminar about how to buy houses in St. Louis, isn’t it?
“…this seminar is completely free but very exclusive. There are only 45 seats left and spots are filling fast! Call and reserve your seat right now before it’s gone!” Those hyped words from the real estate celebrity lit a flame right under you. You’ve always wanted to be your own boss and make “forget you” money. It’s hard to believe you managed to catch the radio announcement so serendipitously! After all, the celebrity is very well-known, and this room is packed with excited people chattering away about their dreams. But wait, this celebrity is really famous, and they said they’re going to tell you the “tricks of the trade”… why and how is this seminar free? Well, the radio spot you heard wasn’t the only one, and it probably ran for weeks coming up to the event. The seminar may have been advertised on television, in local papers, on event calendars, or in your email inbox. In fact, your real estate seminar likely spent around $200k on advertisements alone, and this is one of several in your area and many throughout the country. That’s millions of dollars on advertisements and thousands more in hotel rental fees and catering. So where is all this money coming from? Let’s look at the contents of the seminar. If you pay close attention, you’ll notice the presenter is thin on real estate advice and thick on the real estate advice you could be getting. The sole purpose of this seminar is to upsell the $1000+ information kit from the “celebrity, themselves.” And make no mistake, if you spend hours listening to the presenter, you may well want to buy in. The presenter is an expert salesperson, and the seminar is more akin to a timeshare pitch than an informational class. But okay, $1000 isn’t that much when you consider the commissions that successful real estate investors make. Buying that could be worth it, right?
But there’s no end to it. Once you’ve bought the $1000 information kit, the next step is mentoring from another person on the celebrity’s “team,” for the paltry sum of $5000. But wait, for just $20,000, you can be mentored by the celebrity themselves… for a short while… over the phone…. The sunk-cost fallacy plays strongly, here. The initial time investment you made by sitting the seminar influenced you to buy the $1000 kit so that your time wasn’t for nothing. Then you have to buy the mentoring so that the $1000 kit wasn’t for nothing, and so on. And all for an approximation of the education you’d receive studying to be a realtor under a reputable school. Let’s face it, buying and selling homes isn’t easy, and it definitely isn’t free. Every house you buy or sell with “other people’s money”? A fat cut goes to the celebrity “team” you’re working under, even though they don’t provide leads, nor anything else for free. Leave buying houses in St. Louis to the professionals, like REI STL. These are the real pros, who will take care of selling your home for you without any of the hassles of bringing it to market yourself. And before you know it, you’ve got cash on hand. That’s more than you can say after attending one of these free seminars.