“Which real estate gurus are scams and which are legit?” This is a question I often get, and rather than publicly decry others, I humbly bite my tongue. It’s a hard thing to do when you see scammers and phonies, but my mother always told me if you have nothing nice to say, then don’t say anything at all. I told this to one of the major guru-bashers and he told me my mother was an idiot. Nice.
Rather than tell you who is legit and who is not, instead, I will give you some guidelines to follow so you can make a clear decision for yourself.
01. What’s the Guru’s Experience?
A master’s degree is not required, but I am often skeptical of the fast “rags to riches” stories. I’d prefer that someone has a long history of being in the business, made good decisions and bad ones, and learned from their extensive experience. Someone who just started 2 years ago hasn’t been around long enough to offer practical advice, in my opinion.
02. What Have You Done Lately?
Ask the guru to show you 3 deals they’ve done in the last year. If someone hasn’t done a year in the last year or two, they don’t understand the current market we are in. On the other hand, if a guru says he currently does 10 deals a month, he’s probably full of it. There’s not enough time in the day to be a guru and do 10 deals a month.
03. Do They Offer Email Access to Someone for Questions?
Some gurus are “untouchable”, others connect you to a Utah boiler room that tries to upsell you to more products. I don’t think buying a $10 product entitles you to unlimited coaching, but if you spend thousands of dollars, that should get you some access to the guru in question, even if it is an occasional email.
04. Refund Policy.
Read this carefully. Some offer short ones, other long ones. Mine is rather short because I don’t want people copying my legal forms and returning it. Many people buy a product, don’t open it, get buyer’s remorse, then return it. That’s fine, but make sure you read the policy and the fine print before you buy.
Google the guru’s name with the word “complaint” or “scam” next to it. One complaint by an unreasonable or irate customer is not a deal breaker, but if you find a dozen, you should be on alert. Beware of gurus who buy domains like “guruname-scam.com” and they put positive things on it. Ask yourself, “why would a guru have to do this?” Answer: to bury negative reviews. Also check the Better Business Bureau online for their score. The score is based on the guru’s history of resolving (or not resolving) complaints. Nobody is perfect, eventually if you do enough business you will get a customer complaint, but watch out for excessive ones and fake testimonials.
06. “Sneaky” Automated Monthly Credit Card Billing.
Some gurus offer monthly billing plans, which is ok, but watch out for the hidden fine print when you download a free or cheap product. The fine print reads that you give them the right to ding your credit card. The truly bad gurus will give you the runaround for a few months, then NOT give you a credit for the amount they billed you.
07. Infomercial Gurus.
With the exception of Carleton Sheets, most people on TV are full of it. Also, if you sell a $39 product on TV you are bound to get lots of complaints online because of billing issues and refunds, which is why I stay away from infomercials. People who pay $39 are the worst complainers compared to people who pay $1,000.
08. Free Sample.
Does the guru offer informative articles and downloads that you can sample, or are you forced to buy something or give them your email address? I call gurus who don’t offer anything for free “greedy”, but that’s just my opinion.
09. Misleading Titles.
Gurus who are legit will use titles of their program that describe what it is and what it does. Questionable ones will use long BS titles like, “How to retire in 6 months with $1,000,000 and never lift a finger”.
10. The Risks.
Legitimate and experienced gurus know that deals can blow up and they tell you about the risks and how to prevent them in their courses. Questionable gurus haven’t done enough deals to know the risks or they gloss over the risks.
11. How Much Money Did You Lose in the Recent Crash?
When the market was strong, virtually every knucklehead was making money. The crash weeded out the people who did not use their heads to invest. Ask the guru how much he lost? Did he have to short-sale houses or get foreclosed? Did he file bankruptcy? We all lost equity in the crash, but the gurus who crashed and burned because they didn’t use smart formulas and are now starting over should not be trusted.
12. How Many Lawsuits Against Him?
If you do enough deals, you’ll end up in a lawsuit, but how many are acceptable? More than 1 every two years is too much. Go to the public courthouse websites and look up the cases – see if he or she won or lost. Be particularly concerned if the lawsuit was by the Federal Trade Commission or State Attorney General.
13. Slick Internet Marketing.
Many gurus are simply good Internet marketers with a dash of knowledge about real estate. Pay careful attention to those gurus who sell real estate, MLM, and other products.
14. What Do Other Gurus Say About Him?
Some gurus make a point of publicly bashing other gurus online. I don’t agree, but that’s their choice. Ask your local real estate investment club leader what they think of the guru. You’ll get an honest opinion.
15. One Niche
Gurus who have a one-size-fits-all approach are usually inexperienced. Any investor who’s been around the block knows that you need multiple approaches to a deal, and multiple exit strategies.
16. “Go See Your Lawyer and Accountant”
I may have an unfair advantage because I am an attorney, but I have done extensive research on the legal and tax issues and include them in my courses and articles. Gurus who give you the generic “go see a lawyer” answer are just being lazy. I didn’t learn this stuff in law school, I learned it by research and experience.
I hope this helps, if you have other suggestions to add to the list, please let me know. Email [email protected].
Attorney William ("Bill") Bronchick, the host of Legalwiz.com, has authored six best-selling books and is sought nationwide for his 30+ years of real estate and legal knowledge. He has been interviewed by numerous media outlets, such as CNBC, TIME Magazine, USA Today, Investor Business Daily, Forbes, and the LA Times, to name a few. William Bronchick is the co-founder and past President of the Colorado Association of Real Estate Investors and the President of the Colorado Landlords Association. Click on the "About" link above for more information on William Bronchick.