Two things to watch out for from the bad-eggs in the property industry.
Someone forwarded a video on to me the other day. It gave me a bit of a giggle. The content’s fine. I just know this industry so well.
It’s from the good folks at Consumer Protection Western Australia, with a warning about what to watch out for with “property spruikers”.
Some of the info there is a bit basic, but I’d definitely recommend sending it around to anyone you know who’s thinking about getting in to property, especially if they don’t have much investment experience under their belts.
Because this video highlights the two big dangers that newbie investors face – property salesmen dressed up as “educators”, and high-pressure sales techniques.
Combined, these two make up nothing less than a scam.
First up, I’ve never sold anyone a property. Ever. I know that if I was helping people with strategy, and then selling the vehicles for that strategy, I’d have a conflict of interest.
It would be hard to be unbiased, even with the best intentions.
But these salesmen dressed up as educators don’t have the best intentions. They don’t even have good intentions. They’re only game is to tell you whatever you need to hear to get you to purchase properties through their distribution network (from which they get a very healthy kick-back, thank you very much.)
And it might seem like their “education” is a bargain. But when you realise you’re just paying for the privilege to end up in their sales funnel, you realise what a rip-off it is.
And whatever you’re paying in fees pales in comparison to the commissions they receive. It’s all about the sales.
It’s a total scam.
And if that wasn’t bad enough, then comes the high-pressure sales techniques. This offer is for today only. Strictly limited enrolment, blah, blah, blah. It’s all geared to ram unsuspecting people into deals that are simply not good deals.
A good number of my students have come to me after they’ve fallen prey to these property scammers. They’ve over-paid for dud properties that never saw anything like the rents and capital growth they were promised.
By the time they got to me the properties were bleeding cash. Some even ended up with negative equity.
I’m proud to say that I’ve turned a lot of those stories around.
The video also warns about rent-to-own schemes. Rent-to-own’s never been central to my strategy, but I don’t think there’s anything inherently wrong with rent-to-own. I’ve seen it work for a lot of people, and it’s helped people get into the market sooner than they otherwise could have.
But it is true that we’re often talking about people in vulnerable situations. We’re generally talking about buyers who can’t qualify for finance right away, because they don’t have the employment history or enough of a deposit. And we’re often talking about sellers who are keen to sell – sometimes because they’re having trouble making their own repayments.
So vulnerable buyers and vulnerable sellers can be a dangerous combo – especially when some of these spruikers get in between and mediate out of the goodness of their heart… and a modest fee.
The legal structures around rent to own can be complex, can differ state to state, and can leave you unprotected if you’re not careful. If you’re going to go down that road, make sure you get some independent advice. Don’t take a salesman’s advice on it.
So this is my promise to you. If you come to one of my seminars, no one’s going to try and sell you a property. There’s no chance you’ll find yourself locked in to something you don’t want to be a part of – no matter how dazzling my charisma might be on the day.
Because, I can stand behind the seminars I offer and say that my intention is to offer people something of real value.
Does that mean it’s a comprehensive and full-proof plan for building property wealth?
No, of course not. It’s only one day after all. It took me the better part of 15 years to pull all that info together. And even my best students need weeks of study and at least one or two of the three-day courses to really get across it.
I have some students who just keep coming back for the weekends, and they get something new out of it every time.
But what I do give you is a “way” to think about property. A lot of people have never thought about the role cash-flow plays in building a portfolio. For a long time in Australia the focus has been on capital growth at any cost. But that will hamstring you.
Or a lot of people have never thought about how to protect themselves and make sure that their assets are covered. Or they’ve never looked into the various tax-minimisation strategies that property opens up to you (if you’ve structured your ownership in the right way and with the right vehicles.)
What I offer is the Dymphna Boholt framework. This is what has worked for me. I’m not doing anything else that I’m not talking about in my seminars. This is how the real estate millionaires do it.
So is a one-day seminar going to make you a property expert over night? Of course not. We can only do so much in one day.
But I can give you a way to ‘think’ about property. And even if you don’t like my particular answers, you will know what questions you should be asking.
I stand by that value. It’s the seminar I wish someone had given me before I went out and made all the costly mistakes (sorry, learning experiences) I did.
And it will give you some defence against the scam artists that are out there.
Can you ask for more than that?
Hopefully I’ll see you at an event very soon!