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Real Estate Investing: Infomercial and Mentoring Scams
Flipping through late-night infomercials recently, I saw two real estate get-rich quick schemes, and I couldn't help but wonder why people still fall for those old scams? Has anyone really talked a seller out of his home for no money down with owner financing lately? Real estate infomercials do great harm to beginning investors, who waste hundreds of dollars on old information. Worse yet, those beginners soon get discouraged and miss out on the true (and profitable) adventure of real estate investing. One of the most popular late night infomercial shows tells beginners that it's possible to make a fortune by buying houses with no money down and then renting them out to cover the monthly payments. It's true that you can buy a home for no money down, but the requirements include having good credit, good income, and the home should be owner-occupied. Rentals don't normally qualify for no money down financing. Institutional lenders aren't supposed to make no money down loans on investment properties, and even if you could buy an investment home with no money down, the monthly payments would generally eat up the rent. Late-night scammers also claim that investors can get owners to pay the closing costs, including the down payment. But when a lender asks where your down payment will be coming from, saying, "the seller" is not the right answer! Today's sellers are also fairly savvy, and understand that with no money invested in a property, a buyer could easily walk away and leave them with a home that's been ruined by careless tenants. Another TV program offers a bogus system for buying houses at ridiculous prices, but think about it: has anyone bought a home, free and clear, for $345.00 at a tax sale recently? Hordes of investors flock to the tax sales in the area where I live, bidding up the prices of foreclosure properties far beyond a few cents on the dollar. It just doesn't happen. Today, another real estate investment scam is popular in Southern California. Here's how it works: a young person we'll call Charles charged $4,000 on his credit card to hire a real estate "mentor," after the mentor wined and dined him at a fancy Beverly Hills restaurant. In exchange for the fee, the mentor instructed Charles to find distressed houses by driving around the area and writing down the addresses of ugly houses in nice neighborhoods. Once Charles had given him the addresses, the mentor obtained the owner's address and sometimes a phone number. Then it was up to Charles to call the owners and talk them into selling their houses for no money down, and carrying the paper, too! I met Charles when he called me about buying a property that my husband and I had on the market for $1.2 million. When I asked him how such a young man was going to make the payments on $1.2 million home, he told me that he planned to rent the house out for enough to make the payments. As a real estate investor myself, I tried not to laugh at his naivete, and after talking to Charles and listening to his frustration about trying so hard to follow his mentor's advice, I offered to help him find a property, and I'm happy to say that Charles now owns his own home. But he'll still have to spend years paying off a $4,000 credit card bill. If you want to make money as a real estate investor, a good first step is to buy your own home, like Charles did. You can do that for no money down if you have good credit, or for a relatively little amount of money down if your credit is poor. Once you've purchased your own home, fix it up and then either sell it or refinance it and use your profits as the down payment on an investment property. Don't pay hundreds of dollars for out-dated methods that may have worked in the middle of last century! They're a waste of your time and money. Real estate investing is truly a great way to make a fortune, but you must stick to tried-and-true proven strategies, ones that work in today's real estate market. (c) Copyright 2004, Jeanette J. Fisher. All rights reserved. Professor Jeanette Fisher, author of Doghouse to Dollhouse for Dollars, Joy to the Home, and other books teaches Real Estate Investing and Design Psychology. For more articles, tips, reports, newsletters, and sales flyer template, see http://www.doghousetodollhousefordollars.com/pages/5/index.htm
MORE RESOURCES: Jeff Bezos' secret $190M Seattle real estate empire revealed Business Insider I'm a Real Estate Investor: Don't Pay Off Student Loan Debt — Buy Properties Instead - Yahoo Finance Real Estate Transfers ~ through Nov. 23 The Bedford Citizen Francisco Real Estate: Why Homeowners are Selling at a Loss The San Francisco Standard New Legislation Proposes to Take Wall Street Out of the Housing Market The New York Times Dodge County real estate transfers Fremont Tribune Real estate transfers: Dec. 8, 2023 RiverheadLOCAL Eastern U.P. real estate remains stable despite shifting national trends Sault Ste. Marie Evening News RNR Real Estate Briefs – Texas & more Realty News Report Real Estate Transfers: August 1 - 15, 2023 The Owensboro Times Real estate: Foreign LLC buys Pizza Hut property in Perry Township Massillon Independent Real Estate Sales Include Wealth Management Center Complex, Ranch For Vets Jamestown Post Journal How a Kitchen Refresh Can Help Close a Real Estate Deal How a team approach brings sales, success Behind The Hedges Real estate records, 12/10 Lincoln Journal Star McColly Real Estate Holiday Celebration 2023 | LaPorteCounty.Life LaPorteCounty Life Massachusetts real estate transactions for Hampden, Hampshire and Franklin counties Dec. 10, 2023 edition MassLive.com Real Estate Transactions for Dec. 9-10 | News, Sports, Jobs Nashua Telegraph OT Real Estate Spotlight of the Week: 4404 Fairbairn Court The Owensboro Times XPO buys Yellow's Real Estate For $870 Million The Real Deal I'm a Real Estate Investor: Don't Pay Off Student Loan Debt -- Buy Properties Instead GOBankingRates NJ real estate: $20M Alpine mansion for sale. See listing NorthJersey.com Routt County real estate sales surpass $13.4M from Dec. 1-7 Steamboat Pilot & Today Chad Tredway Rejoins JP Morgan Asset Management as Head of Real Estate Americas | Chief Investment Officer Chief Investment Officer PTK spotlight: 50 commercial real estate projects to know in 2024 Arizona Big Media Real Estate Roundup, Retail Theft Arrests The Eastsider LA Jef Conn: From Lubbock commercial real estate to Texas Chairman of the Board Texas REALTORS KLBK | KAMC | EverythingLubbock.com Real Estate Transfer Dec. 9, 2023 | Records | messenger-inquirer.com messenger-inquirer Charlottesville real estate investor Phaedrus Acgtblu dead in apparent homicide - The Daily Progress A Strong 2024 Market? Get a Real Estate Coach Now | Florida Realtors Bezos Leaving Behind A Massive Seattle Real Estate Portfolio As He And Lauren Sanchez Plan Move Miami Yahoo Finance Greenwich Real Estate Inventory to Hit Zero in March 2024 Greenwich Sentinel Bay Area real estate: Where rent or mortgages hurt residents most San Francisco Chronicle Chad Tredway Rejoins J.P. Morgan as Head of Real Estate Americas, J.P. Morgan Asset Management PR Newswire Real Estate Property Transfers in Franklin for November 13, 2023 Williamson Source Coral Springs Real Estate Market Defies Economic Predictions • Coral Springs Talk Coral Springs Talk What's a Real-Estate Fund Worth? Depends on Who's Doing the Math The Wall Street Journal Real estate news: DoubleTree near South Coast Plaza, JWA getting a $12 million makeover - OCRegister Pacaso, The Real Estate Marketplace, Releases Report That Identifies Fast-Growing Luxury Second Home Markets Crowdfund Insider Could Bitcoin Cause Real Estate Prices to Collapse? DataDrivenInvestor Viral New Berlin jungle home back on market after sale fell through: Open House - Milwaukee Business Journal The Business Journals Wheeler Development exec balances careers in real estate, folk music - Crain's Grand Rapids Business Wheeler Development exec balances careers in real estate, folk music Crain's Grand Rapids Business Is Jeff Bezos shopping for real estate in Palm Beach? The New York Post thinks he is Palm Beach Daily News New Castle News | Newspaper Ads | Classifieds | Real Estate for Sale | BERKSHIRE HATHAWAY Home Services The ... New Castle News Valley real estate community steps up to support Operation Santa Claus ABC15 Arizona in Phoenix REAL ESTATE | VIDEO | Charming and inviting 2-story home in West Bend, WI | By Wendy Wendorf, Homestead Realty washingtoncountyinsider.com Ares Banks $3.3 Billion to Buy Real-Estate Fund Assets - WSJ The Wall Street Journal San Francisco's Russian Hill Mansion Sells for Half Its Asking Price Amid Real Estate Shift Hoodline Apply for the Longtime Owner Occupants Program (LOOP) | Services Philadelphia Water Department Canadian Apartment Properties Real Estate Investment Trust Un stock rises Friday, outperforms market MarketWatch Opinion | Real-Estate Collusion Is Finally Coming to an End The Wall Street Journal What Accreditation Shift Could Mean for Real Estate Investors Kiplinger's Personal Finance REAL ESTATE BRIEFS: DEC. 9 Las Vegas Review-Journal New York City Law Against Body-Size Discrimination: What the Residential Real Estate Industry Needs to Know Jackson Lewis Jeff Bezos's Homes: Inside His More Than $500 Million Property Portfolio Architectural Digest 20 Young Leaders Transforming the Real-Estate Industry in 2023 Business Insider Are Virtual Tours Still Worth It in Real Estate? Evidence from 75000 Home Sales Harvard Business School Working Knowledge 9 Best Places to Retire in Mexico, According to Real Estate Experts Travel + Leisure Gardiner nonprofit works to house teachers amidst 'uphill battle' of pricey real estate - Missoulian |
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