August 17, 2016

After recently sitting on a panel of “experts” in the field of residential real estate investing, I have found myself with not only the urge to blog about my experiences in this area, but also vent about others pretending to be something they are not.  There are so many pretenders out there now, it has become nearly impossible to tell the difference from the real deal and the real FAKE deal.  Case in point, I sat on a panel, not to promote myself, but rather discuss what is happening in our markets today – where we see good opportunities and what the future may bring.  The panelists (in order) included myself, a young, very smart self-starter, an absolute flake who knew little to nothing about real estate (but thought he was God’s gift to the industry) and a gentleman that convinced would-be investors that (although he had little experience) he should be trusted, because he was a minister in a past life. 

As the conversations began and the questions were asked by the moderator, I felt more like I was on an edition of The Dating Game, rather than sitting on a panel of PROFESSIONALS.  I found myself in more of a debate, rather than a casual open conversation amongst my colleagues.  I heard statements like, “you should spend $50k and educate yourself by a guru, before you invest.”  I heard, “yield does not matter in real estate.”  WHAT!?  Yield doesn’t matter?!?  Yield is ALL that matters!  Why they heck are you investing in real estate if you don’t care about the yield? 

As the panel discussion came to an end (and finding myself needing a shower after it was done) a big dose of what I already knew hit me smack in the face – this industry is loaded with pitchmen (and women).  Sure, they have always been there and pretty easy to recognize; but, today’s industry is saturated with would-be scumbags and scam artists.  I think over the 18 years I have been in this business, I had become accustomed to spotting them from a far distance and just assumed even the most novice of an investor could see through their polished shoes, fancy talk and over-priced suits. 

In an effort to help clean up the industry and provide some very simple advice (which should save millions across BP alone), please consider the following, before investing:   

1)      If your pitchman is dressed in a suit that cost he/she as much (or more) than it cost them to attend the conference, you probably should not listen to them.

2)      If you pitchman spent $3k to attend the conference and is charging you $50k for their “expertise” at a future event, or for a book, or online workshop, you probably should not listen to them. 

3)      If your pitchman is willing to stand on his feet for three days in a booth and says “I only do this for the fun of it,” you probably should not listen to them.

4)      If you find your pitchman passed out in the middle of the afternoon on a table, using a table cover as a blanket, you probably should not listen to them.  YES, THIS REALLY HAPPENED!

5)      If your pitchman talks a big game, but has no RECENT documented evidence and provable facts (at your fingertips) to back up their claims, you probably should not listen to them. 

6)      If your pitchman refers to themselves in the Third person, or has the arrogance to title their services after their own name, such as “The John Doe method to getting rich,” you probably should not listen to them. 

7)      If your pitchman insults you or uses profanity in their presentation and thinks it is funny, you probably should not listen to them.

8)      Finally, if your pitchman’s business card is a picture of themselves bathing in a sea of money, you probably should not listen to them.

In summary, keep it simple and use common sense.  There are a lot of would-be cowboys out there that have no clue what they are talking about or what they are doing.  They sell you on an idea and not a result.  There are incredible and almost unbelievable profits to make in this business; so, I do not want to say, “If it sounds too good to be true, it probably is.”  All I am saying is, “If it looks like a duck, walks like a duck, and it quacks like a duck, it is probably a duck.” 

Investments in tax liens, tax deeds, fix and flips and other forms of distressed real estate are a lot of fun.  Figuring out who is honest and who is the real deal is not so much fun and you really need to do your homework.    

Charles C. Sells

About the author 

Charles Sells

Charles Sells is the founder and CEO of The PIP Group, a turnkey service provider that focuses on investments in distressed real estate assets including tax liens, tax deeds, traditional foreclosures, fix-and-flips and long-term cash flow acquisitions. He has been involved in tax lien investing for over 20 years, during which time The PIP Group has grown to become one of the largest agencies of its kind with nearly 1,000 individual and institutional investors worldwide.

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