Written By Charles Sells
Wow, what an extraordinary experience 2011 continues to be! The foreclosure “specialists” offering extraordinary “opportunity”, amazing returns and an abundance of full turnkey options are popping up faster than used car dealers did in the 60s! Just like used car dealers, there are legitimate opportunities and total rip-offs. The fact is, it is a great time to invest in real estate. To quote my favorite Spider-Man movie, “with great power comes great responsibility”. To translate, there is HUGE opportunity to take advantage of out there today, but know thy agent! How do you know which is which? Ask yourself these questions….
1. How long have they been in business. If a couple of long-standing default specialists have recently joined forces, great! If an agent in a specific market decided he saw a good idea for a new business, not great.
2. Do they have national, broad coverage, or are they investing in your back yard? The best opportunities today, may be somewhere else tomorrow. In either circumstance, you can be successful. You may be doing very well in Nevada right now, but time is not on the side of a localized specialist in that market. Working with somebody on a more broad spectrum may mean you are not investing in YOUR backyard, but the infrastructure is going to be far stronger.
3. What are the upfront fees they are charging? Many legit specialists may charge a percentage of the purchase price to cover commissions, or referral costs. If somebody wants to charge you a “membership” fee, or similar, consider it a red-flag. Clearly, if I feel you can make money from my opportunity, I will make money from your investment, not your membership.
4. Are they selling you a documented opportunity, or the IDEA of an opportunity? How much detail are they giving before you actually invest and what (if anything) are they charging for you to see those details?
5. Has the invitation of a bus tour been offered yet? If I need to sell a bunch of bus tickets and take you on a tour, my focus is not on your investment – it is taking you on a tour.
6. Where are the CURRENT property valuations coming from? I see SO MANY of these pop-up shops trying to convey a great opportunity based on a discount to buy a property from the last tax assessment done, or a website like Zillow. Although these may be areas good to start your research on value, they are USELESS.
7. Are they offering you “How-To” programs, or weekend workshops? I am always amazed at how many extraordinarily smart, successful people fall for these. If I am selling you a $5,000 workshop to teach you how to be as successful as I am, then I have obviously discovered I am better at selling you a workshop than a viable investment.