Real Estate Seminars

Before we get started I want to give you a little background about myself and what gives me the expertise to talk about real estate seminars. Over the years I’ve been to at least 50 real estate seminars in and out of the country. As a matter of fact, I have notes on almost every seminar I have attended--what they said, how they said it, and what they were teaching and selling.

I was always fascinated when it came to the end of the seminar pitch and how they would try to up-sell their programs into expensive coaching and mentoring. I watched them use the psychology of the shortage, excitement and fear, playing on people’s emotions to sell their expensive products.

The real estate seminar is actually a very well-orchestrated event. It is designed with one thing in mind, to suck as much money out of every wallet and purse as possible! It has literally been a comedy to me over the years to watch how this is done and to see the different twists they put on their techniques.

Most of us have seen advertisements for a free seminar advertised in your area on how to get rich in real estate. Almost everyone knows this is a gimmick to up-sell you into something else, and it is. Who would think that these nice people are going around and spending their money just to teach others about real estate?

One of the things I think is laughable is that the gurus never really tell you any of their so-called secrets at the free event. They just show pictures and talk about a lot of glamour and glitz, how some “average Joe like you made a filthy, stinking fortune” (actual words they use) in real estate, and how you can do it to – once you know the secrets. They may share a little generic real estate information at a seminar, but it’s mainly useless and not very valuable.

It’s funny how each and every guru has a secret to success. But when you have listened to most of them speak, like I have, they all pretty much say the exact same thing. They’re selling the secret to finding motivated sellers or the secret to getting people to deed you their house! But as I’ve said before, there is no secret.

Once you have sat there and heard their pitch for a couple of hours, they do a pretty good job at getting you excited. How do they accomplish this? Easy! They’re selling you a dream, and the promise of the future is an awesome force. They start to get you in dreamland by talking about fancy cars, exotic vacations and firing your boss (quitting your job). Phrases like “just suppose” or “imagine” are very powerful. Immediately they overcome all objections with these phrases; they take someone out of reality and get them to imagine the future and everything they say that follows. This is powerful and can be very hypnotic! Of course, the only way you are going to get there is if you buy their materials.

And, boy, do people buy their materials! I have seen gurus create shortages with a limited amount of packages, or the first 50 people that buy get an extra special deal like you couldn’t imagine. I’ve seen people knocking down tables and each other to run to the back of the room to buy. As a matter of fact, I have talked to some of these people right after they bought and some of them didn’t even know what they had received in their package. Can you believe that? They didn’t even know what they had bought and paid for! That’s how good some of the gurus are--just like the Pied Piper. Some of them have been at this business for almost 20 years, and if you do something for 20 years, you’re going to get good at it.

When you go to a free seminar, whether you purchase anything or not the guru has your name. You’re going to be hounded by telemarketing firms the guru has hired to try to up-sell you. How do I know this? I’ve been quietly watching and researching this part of the real estate seminar industry for over five years. I know exactly what they do and how they do it. What I’m saying is exactly how it is.

In general, if you didn’t purchase anything at the seminar, they will try to sell you their tape and book programs. If you did buy their tape and book programs, they may try to sell you a boot camp and/or mentoring. It just depends on the guru and the telemarketing company they hire.

Let’s talk about boot camps first. The term boot camp in the real estate seminar industry basically means an intensive, multi-day training event. The term boot camp has an intense connotation associated with it because of the military, probably something to do with regimentation. When you go to a boot camp, their main goal is to give you more information but not enough. They want to continue to up-sell you more information, products and boot camps.

Let me tell you about a three- to five-day real estate training event. When you come out of one of those, you realize how much you don’t know about real estate! You are so overwhelmed you don’t know where to start. And that is exactly where they want you, because now you need even more training.

So you think, “I’d better buy this advanced boot camp now while it’s on special.” There you are, several months and thousands and thousands of dollars into this deal, and you haven’t done anything yet. You may have not even written one single offer at this point. This is when they hit you for expensive coaching/mentoring. They basically say it something like this: “If you were to work with a proven expert, do you think that would speed up the learning process and help you to become successful sooner?”

You have to admit that’s a pretty loaded question. After the seminar attendee begins to experience a certain frustration level, they begin to believe that coaching/mentoring can be the solution to jump starting their real estate investing career. In theory it makes a lot of sense.

Everyone needs a coach. Even great performers like Michael Jordan and Tiger Woods have coaches. Why? Like I said, everyone needs one and it speeds up the learning curve immensely. Coaching is a circle. What do I mean by that? Tiger Woods has a coach, and his coach should have a coach, and so on and so on. Coaching is the ultimate in training and accountability.

If I told myself I was going to go out on Saturday and scout out a neighborhood for three hours looking for property and I didn’t do it, most people would say to themselves, “Oh, well, no big deal. I’ll just do it next weekend.” However, if I told my coach I was going to do it, I wouldn’t want to disappoint my coach. Most people would rather disappoint themselves before they would want someone else to be disappointed in them. Remember what I said; it’s the ultimate in accountability.

Understand, though, that most programs are set up to walk you down the path to spend more money with them. Most people are looking for that one last secret that is going to work for them. I believe you’re not given the truth of what it’s going to take in the beginning. You’re given just enough to get you to the next sales pitch.

The whole pitch for mentoring is one of the slickest things I have ever seen. Even experienced sales people fall for it. You don’t even realize that you are being sold. The whole pitch is based on a psychological principle called the opponent process theory. In a nutshell, it uses the extremes between two emotions, where one is suppressed and then exchanged for another, the second of which is then intensified. Let me give you an example. When skydivers jump from planes, the beginners experience extreme fear as they jump, which is replaced by great relief when they land. With repeated jumps, the fear decreases and the post jump pleasure increases.

So how do they use this to sell expensive mentoring programs? I’ll explain it to you and it’s absolutely brilliant. They use what is known as a two-part close. The first part is with a setter, and the closer does the second part. It goes like this.

Telemarketer: Hi, is Joe there?

Joe: Yes, this is Joe.

Telemarketer: Joe, this is Mark from Real Estate Seminars, and the reason for my call tonight is because I understand you recently purchased some of our materials at our seminar. Right?

Joe: Yes!

Telemarketer: Joe, is real estate something you’re looking at to supplement your income or something you’d like to do full time?

Joe: Probably part time for now.

Telemarketer: Tell me, Joe, are you ready to get out of the rat race? Great!

Joe, what I’m doing here is looking to hand select a few people for a potential opportunity to spend the next several months working in a one-on-one relationship with one of our real estate experts.

If you qualify, you’ll gain a high level of success in real estate investing in a very short amount of time. Then we use these success stories in up-coming media events. This is a very effective advertising and marketing tool for our firm. These testimonials help sell more of our tapes and books. Does that make sense?

Joe, my job is to simply gather a little bit of information from you so that we can make a determination whether or not we can extend an invitation to you to get involved in the program. We only have a few positions left that are available.

The next step is to build in pain by asking you what your goals are for retirement and showing you how far you truly are from those. Then they want to know about your debt. They continue to add to this pain in their pitch. As they gain your trust, you start to open up more and divulge how much money you owe and what your credit card balances are and how much credit you have left on them. This is the main information the setter gathers so the closer can use that information against you. Dirty pool, huh?

A brilliant technique for extracting your debt information from you is this one simple question: “If you were to write a check today for all of your debt, how much would that check be for?” From there they get you to start revealing the details about your debt and financial situation to them. At this point you have an emotional investment with them. Most people will have credit card and other debt and will be looking for a way out. That’s why they are looking to get into real estate, and the setter knows this.

After building rapport the setter now has your trust and gets you to believe that this program, if you are selected, is a way out of your debt problems. As you start to get excited about the program, the setter takes it away using such language as this.

In the event we decide to work together…

If you fit the profile…

If we extend you an invitation to come on board…

Unfortunately this isn’t available to everyone.

We have 15 candidates and we’re filling four positions.

Very few people make it through the initial interview.

We’re going to make our initial selection, and then we’ll make our final selection.

We’ll put together a waiting list.

This isn’t about information. It’s about qualifying.

Let’s see if we can get you through this first interview and get you qualified.

We’re looking to work with someone who recognizes in their gut that now is the time.

You can see how powerful these phrases are and how it can work on the human psyche. You’re being sold and you don’t even know it! You can also see how the opponent process theory is working here, the extremes between two emotions. One minute you have a sense of relief about getting into the program and having your financial difficulties go away, and the next minute you may not even be allowed in. If a setter does their job right, 20 to 30 minutes is all they need.

You are then on pins and needles waiting for the senior director (the closer) to call and give you their final interview to see if you will be allowed into the program. It’s all about the shortage and the takeaway! The appointment for you to interview with the senior director (closer) is usually set in the next day or two. If the setter has done their job right, then you are excited and want to be on your best behavior with the senior director.

When the senior director calls, you are already like putty in their hands.

This is the typical language they would use.

It’s not for everyone because it’s an accelerated program. There is no room for trial and error.

The only way we bring people on board is if it’s win-win.

I’m going to give you a couple of assignments and put you on hold, because this will dictate the outcome of the call.

Due to the limited staff, we need you to list the two or three benefits you would see in working with a mentor.

Finally, if we do this…

Anybody considered has to make an investment. There is money involved in making money. Investments range from $2000 to $20,000. The average investment is $8600. If you’re not willing to commit to the money, then we don’t need to go over the information. This money can guarantee you real estate success. We have a lot of information to go over before any decisions are made. I have to make sure you fit the criteria. When we’re finished, if the criteria are met and you can meet your goals, are you prepared to make the investment?

The money you’re investing is going to get you clients; you will earn while you learn. If you don’t drag your feet, you will be poised for financial independence. The average investment is around $8000. If you mange your affairs properly and as long as you can see clearly, you’re assured on having it returned in a timely manner. Upon the conclusion of this interview, if you feel this will work, are you prepared to make the investment today?

I want you to put it on a high interest rate card and then flip it to a lower one. That way you can buy time for the business to pay for itself with the bank’s money while you get up and going with your mentor.

They use the OPM (other people’s money) pitch quite effectively. Basically what they’re saying is to put it on a credit card and keep transferring the balances and let the business pay for it. Therefore, it’s really not costing you anything. You’re using other people’s money, just like the banks. This pitch can be very powerful when given by a seasoned marketer.

At the end, the senior director extends you the invitation (at a cost of?). The whole premise of the pitch is to determine your pain and create and sell you a shortage, making you feel like you were special and chosen out of a large field of candidates. The close can last around 30 minutes or whatever it takes to get the deal.

I have given you a very brief but accurate description of how the process works. If you fall for it once, you usually don’t fall for it again because you’ve heard that pitch before. That same pitch is used in Internet sales, government grants and other types of industries that use mentoring. Selling mentoring is what’s known as the back end, the big sale. The small amount of front end (books, tapes) is a necessary step to get to the big payday.

The whole pitch is extremely manipulative and it’s not ethical. It’s based on lies and deception, bottom line! Getting people to plunk down the last several thousand dollars they have available, all on just a promise that they will be successful in real estate investing, is wrong.

Incidentally, a lot of these boiler rooms, as they are known, will tell the new setters in training to watch the movie “Boiler Room” with Ben Affleck and Vin Diesel. All in all, it’s a pretty accurate picture of exactly what goes on in the industry.

The close is basically designed to get as much out of your wallet as they can. If you have $5000 left on your credit cards, it’s usually $4500 to get in. If you have $12,000 on your cards, it might be $10,000 to get in. There really isn’t a lot of difference in what you get for the money, except for some more mentoring sessions or some other worthless material.

So for your $5000 to $10,000 or whatever they suck out of your wallet, you get some sessions with a mentor. Yippee! Here’s where I have a real problem. Some of these mentors are literally people who know nothing about real estate and are just reading off a generic prefabricated training sheet. I can’t tell you the countless people I have talked to that said those sessions were absolutely worthless. Now, I’m not saying they’re all that way, but the majority of them are.

In the beginning, all the mentor does is keep you busy--busy setting up an office at home, reading newspaper ads, going to the county recorder, driving around neighborhoods, calling for sale by owners, getting business cards, you name it. They will have you running around for months building what they call a “wealth team:” title companies, lenders, real estate agents, home inspectors, etcetera. They’ll even recommend you take these individuals out to lunch and share your vision with them and how you can make this endeavor win-win for everyone.

Although that may sound good at first, it’s not very practical and here’s why. You’re spending a tremendous amount of time in the beginning basically running around and not accomplishing a lot. It’s busy work and you are paying a lot of money for the privilege of being told what to do.

Here’s an example: going down to the courthouse, watching for notice of defaults, and observing a trustee or sheriff sale at the courthouse. Keeping you busy! It’s kind of like standing at the starting line. Ready, get set…get set…get set. Now don’t get me wrong, these activities certainly need to be done to become a successful investor. A lot of times they are simply out of sequence. Are you starting to get the idea here?

It’s easy to get fired up after a seminar and do these filler activities so you feel like you’re accomplishing something, until the harsh reality sets in that you’re lost. When that moment hits, you realize how much you don’t know about real estate. You can easily get discouraged and run into a road block and the program then gets put on the shelf to gather dust with all the other hopes and dreams you have bought. We’ve all been there at some point in our lives.

Think about it. How is talking to a mentor once a week and being able to e-mail him for several months going to help most people launch a real estate investing career? It’s extremely difficult, at best! One of the things all the mentors will tell you to do is to join a local real estate investors association. Why? It’s sort of the safety in numbers principle. You are among like kind, and that builds rapport and trust fast. This way you can network with other new or experienced investors.

This is actually one of the most valuable things they tell you to do. And it does work, too! However, you could go and join a local club anywhere on your own and not have to pay a mentor just for the privilege of telling you to go and join. I have had many people in my club tell me they have learned more from being there and networking with other club members than they ever did listening to some guru tapes and mentoring sessions. That ought to tell you something right there!

So now you’ve gone through your eight to twelve (depending on how much you paid) mediocre mentoring sessions. Now what? You still haven’t done a deal and you’re frustrated. Well, you might need more mentoring or maybe another boot camp to get you fired up again or maybe you need the “ultimate.” What’s the ultimate? The ultimate can cost you anywhere from $15,000 to $50,000. Yes, you read that right!

That’s where a mentor will fly into your city and spend time with you in your marketplace, one on one. Call it the ultimate hand-holding experience. It works great – until the mentor leaves, which is usually no more than a day or two. Besides, it would take any mentor at least a few days to become familiar with your area. No one can just pop into an area and have a good grasp on the market instantly. It takes time and diligence, no matter who you are.

Some of you may be thinking, “Who in their right mind would do that?” Let me tell you, there are plenty of people that would do it, and there are a lot people that actually do it. There are a lot of people who have money and aren’t afraid to spend it for that sense of belonging and feeling like a player. The gurus know how to exploit that, and they do.

I’ve heard of people who have spent $60,000 or more on their real estate education over a two-year time period and they have yet to do their first deal. They’re on to the next seminar to learn another new secret before they go out into the field. For these people it’s always ready… get set… get set…! If you’re the type of person who has to know everything about anything before you’ll do something, then you’ll probably do nothing. There are a lot of seminar junkies who go from seminar to seminar, kind of like roadies that follow a band around.

Another powerful psychological principle they use is belonging. Mary Kay® is an absolute master at this. Most of the women selling Mary Kay® products never really make a lot of money. But when they are called on stage to receive their pin for the small amount of sales they had, a lot of them become very emotional and some even cry. Why? Because they are being recognized as one of the group. They are receiving things emotionally from belonging that they can’t get elsewhere, from their spouses or their workplaces or whatever. We all want to feel like we belong or are a part of something. Everyone deep down wants to be accepted. The gurus know how to play on this and make you feel like, “Hey, you’re one of us and we recognize you as a real estate investor.” That’s a very powerful principle.

The testimonials in the industry are pretty few and far between. If you’re the average person, you’ll stumble on a few deals and make some money if you can grit it out long enough. But you have to ask yourself if it was worth it. After it’s all said and done, how much did you make? I’ve seen people do the math after the fact and find they made just a little above minimum wage. Even worse, I’ve seen people loose a lot of money. And the legal problems that you can have from something going wrong in a deal, we’re not even going to touch on that at this time. That could be several chapters right there.

You’ll notice in the real estate seminar business there are a lot of niches, gurus who strictly teach foreclosures or subject to or lease/options or a little blend of everything. I’ve even noticed how some of them have switched back and forth based on whatever the current trend is in real estate investing. Techniques go out of fashion and come back in again. I’ve even seen some who specialize in apartments or commercial real estate investing. Talk about a niche that’s way out there!

One of the things most gurus know is to try to appeal to as many people as possible. It’s not very easy to convince the average person to go out and start buying apartment buildings or investing in commercial properties, at least right away. People are comfortable with homes. All of us live in some sort of dwelling, be it a home, condo, mobile home or whatever. It’s easy for people to relate to homes.

Just like most men like cars and most women like clothes, most people like homes, and that’s all there is to it. We’ve all driven up and down different neighborhoods and streets looking at and admiring the type of house we want to buy someday. It’s a very easy sell to get someone involved in residential real estate.

It’s the guru’s job to sell their products and to make it sound easy, and they do that very well. Oh, we’re just going to go out and find motivated sellers who want to deed us their homes, then we’ll turn around and sell it for a big profit with no money out of our own pocket, and it’ll be very little work with virtually no risk. It sounds too good to be true and it is, especially by the time you figure out the money you’ve spent on seminars and mentors. Their spin is that if you do just one good deal, that education is paid for, just like a doctor or an attorney.

That makes sense to a point, but here’s how I look at it. When you factor in all the money you have spent on your real estate education and the time you spent doing it, you have a very substantial investment at the very least. For a fraction of that amount of time and money, you could have a real estate license and be making money a lot easier and faster.

Why don’t the gurus talk about this? Well, if they did, what would they have to sell you? If you were going to real estate school to learn about real estate, then why would you need to take their expensive mentoring? I’ve seen on more than one occasion where gurus admit that they find over 75% of their deals through a real estate agent. They know you need an agent, and that’s why a lot of them don’t like to talk about it. Most people don’t realize it either because they have never had it explained to them in this manner before.

I realize I have painted a bleak picture about the real estate seminar industry, but it’s the stark truth. Yes, there are good programs, good gurus and good mentors, but they are very few and far between. This industry relies on a lot of breakage, meaning most people will give up and move on to something else. Real estate is hot right now and, after the stock market and dot.com busts, a lot more people are looking to it.

In the end the gurus are simply selling a dream and real estate is the tool to achieve that dream. Remember the comparison to network marketing? I think almost everybody has been involved with network marketing at some point in their lives, although I believe that business model has finally had the final nail in its coffin. I was only involved in it once in my entire life, and it was a learning experience that I now look back at from time to time. I can honestly say that I see a lot of similarities between the two.

All network marketing is doing is selling you a dream and appealing to your “greedy and lazy gland.” It’s an enticing thought, doing very little work for a short time, building a downline that will bring in money while you’re out jetting around the world, sipping exotic drinks at exotic locations. That has a lot of appeal to it. Even though one side of your brain is saying, “Hey, stupid, wake up; it’s not that easy,” the greed gland takes over and the mere thought of the possibility, even if it’s only a remote possibility, takes over and wins. The whole time you’re listening to this pitch you’re looking at the fancy brochure with the nice cars and yachts while you’re asking yourself, “How is this product going to get me to this kind of dream lifestyle that I want?”

Ultimately, it never does for 99% of the people. At the end of the day, no matter how good the product is, it’s just another vitamin or mineral, lotion or potion, secret medicinal tropical juice from an exotic island, or whatever type of soap. I actually look back at it now and laugh to myself. But in hindsight I learned a lot from the experience, and in the end, what you take and learn from these types of experiences is all that really matters.