Buying Real Estate Information Like Books, Home Study Courses, and Seminars: How To Save Money And Avoid Being Taken
BATTLECALL GUEST EXPERT: Robert J. Abalos, Esq., InvestingInLand.com
Buying real estate information like books, home study courses, seminars, boot camps, mentoring services, and the like can be VERY expensive. I should know. I buy a huge number of books and materials for my own office library. I'm in the real estate information business so I need to keep up on trends, ideas, and the like.
And so do you. One of the best suggestions I can give all real estate investors, new and experienced, is READ READ READ all you can about the industry and how it works. So buying books and courses is sometimes a must, but the real question is buy which ones?
There are a great many truly awesome real estate writers and speakers out there and Real Estate Investor Magazine will spotlight many of them through articles and interviews. I am amazed by the quality of the writing that exists in this industry sometimes. I've been a real estate lawyer and investor for more than twenty years and I consistently learn new things from some of my favorite writers. Their works are a blessing to me and I'm anxious and more than willing to pass on their names and recommend their materials without hesitation even if I don't make a dime by doing so.
BUT, and it is a HUGE BUT, there are a great many unscrupulous real estate authors out there who sell essentially worthless books and courses to mostly new investors who do not know the ins-and-outs of real estate but are desperate for some financial vehicle to change their lives. You see these very people featured on TV infomercials or in testimonials online or in the very books these "gurus" want you to buy. Individuals who are unemployed, stuck in dead-end jobs, the disabled, the retired who do not have any income besides Social Security to make ends meet. Single mothers who can't pay their bills, married couples without financial security and one paycheck away from homelessness, in other words, people in dire economic straits who need help paying their rent and overdue credit card bills. You don't see millionaires in these testimonials saying "I bought Mr. X's book and I doubled my net worth from $10 million to $20 million in 90 days." You see formerly broken, tired, and nervous people who claim their ticket out of the poorhouse came with the CD course or book they bought from Mr. X.
That's the target market for these bogus products. It's the get-rich-quick solution for people who need to get-rich-quick because they have a job they hate, a landlord wanting rent, and a collection agency calling them every night during the dinner hour.
Professional real estate investors like me know that most of these books and courses have little actual worth. These authors teach mostly theoretical techniques that have never worked in the real world or unethical and sometimes illegal strategies that can make you money so long as you don't get caught by the courts using them. Some of the ideas in these books are solid real estate investment ideas that do work but also have very narrow and limited applications and are hyped into the recipe for an instant fortune. Lots of outdated and obsolete ideas that worked in 1975 are published in books with copyrights of 2005.
For the most part these unethical real estate gurus are not teaching how to buy properties at all. They are selling a dream for people trapped on financial flypaper with no apparent way to escape. The disabled truck driver or the single mother working as a cashier at Wal-Mart with two kids may be drowning in debt and fear and these gurus offer a lifeline that is tempting and persuasive. Just buy this course and your troubles can be over. Unfortunately, what most get is just more debt on their VISA cards they can't pay after buying and discarding the course.
These authors sell a quick fix much like some ruthless diet product companies prey on the overweight. Want to lose 25 pounds in thirty days? To the obese man or woman it sounds like a miracle, worth a few dollars for some pills or a plastic suit that makes you sweat while you sleep. But common sense tells everyone including the very people who buy these phony products you can't lose a pound a day for a month. It won't happen. But the desperate often believe what the logical mind disproves.
There are many spectacular real estate authors out there and unfortunately there are many who are little more than thieves just trying to make a few bucks before they are exposed. It is an amazing but truly sad fact that some real estate authors who write books on real estate don't even own any properties, let alone having ever made money doing the very things they write about. Would you read a book about grilling steaks from a lifelong vegetarian? Why read a real estate investment book from a person who has never invested in real estate? Honestly, what do they know?
How to Buy Real Estate Information
It's fairly easy to separate the authors that are deserving of your money from those that are just trying to take yours and give you nothing in return.
First off, I'm not going to tell you who's who. I routinely get emails from people saying "What do you think of the books and courses by Mr. X?" I have opinions, sure. I also know that the more slimy the guru, the more litigious they are. I'm not afraid of lawsuits but I have better things to do than give depositions. Plus what I want you to do is THINK. I'd rather pose questions to make your mind work like a marathon runner hitting Mile #22 than feed your brain like it was a blank computer needing software instructions from me.
It's easy to tell a Porsche 911 Carrera Cabriolet from a Ford Pinto even if you know very little about cars. Use some common sense.
Here are some guidelines to think about before you spend your hard earned money buying real estate books, courses, and other information.
First, avoid get-rich-quick promises. If a book promises you instant riches or a fast ticket out of your current economic woes, it's a joke. Real estate is an awesome vehicle for building wealth but it works very slowly. It is exactly like compound interest on a savings account. If you think you can earn $10,000 in the next 30 days or $5,000 on your first deal, you are kidding yourself. Most real estate investors, like most people who buy stocks, LOSE MONEY on their investments. It's the professionals with experience, access to capital and credit, and with contacts who make the profits on a consistent basis.
Second, avoid authors who promote a luxury lifestyle. You have seen these illusions of success on TV infomercials and on many book jackets. Private jets, beachfront mansions, harems of beautiful bikini-clad supermodels, fleets of luxury cars. Sorry, but they are all rented by the day for the photo shoot. Legitimate real estate authors promote who they are and their experience, not how many yachts they own or vacations to Europe they take. The illusion of wealth is for the benefit of potential book and course buyers who dream of that rich and famous lifestyle while they flip burgers or clean toilets at highway rest stops. I am deeply suspicious of any author who claims to be a "millionaire" in their books. It's possible they are, but did they make their money in real estate or by selling books and courses on real estate? Lots of babies are born millionaires, too.
Third, avoid books by people who claim instant success in real estate. I see these books and courses all the time. I was a total loser, so the pitch goes, until eighteen months ago when I discovered real estate and now I own subdivisions filled with houses. It doesn't work that way. Real estate wealth is built over time and success comes with lots of failures, errors, mistakes, and often catastrophic ones along the way. Even Donald Trump has filed for bankruptcy due to numerous real estate errors he admits in his own books. Gurus who claim that they found a "magic key" to real estate wealth that made them successful overnight sure did. It's not by fixing up houses and renting them out but by selling a book on that subject.
Fourth, avoid books that make real estate seem easy, fun, or simple. Trust me, investing in real estate is boring, dirty, nasty, hard work, frustrating, and sometimes downright crooked. That said, it can also be fascinating, fulfilling, and very very lucrative. But it is NEVER easy, fun, or simple. It is a way of life filled with stress and often confrontation. There is no better way for the average person anywhere in the world to build wealth and cash flow for themselves and their family than through real estate investment, period. But it is not a easy way otherwise everyone would be doing it. It's just like losing weight. If being slim and trim was easy, everyone would be a size zero. Instead, losing weight means being hungry all the time, sweating in a gym while others are still sleeping, and being sore and in pain from workouts that even your own body resents. Some people might find real estate fun, I guess. Some people enjoy having cigarette butts put out on their nipples too.
Fifth, avoid books that claim you can buy real estate with little or nothing down. Is it possible to buy real estate nothing down? Yes, of course. I've done it, experienced investors do it all the time, and such deals happen every day of the week. But is it probable that you will find such deals on a regular basis? No, that won't happen. I've done two nothing down deals in twenty-three years of investing and trust me when I say I've been looking for them. Nothing down deals are the equivalent of buying a lottery ticket. It is POSSIBLE you may win the Mega Millions of the Lotto grand prize but it is not PROBABLE you will. Of course, I could fill a football stadium with people that have made a fortune buying lottery tickets but that does not prove you can too. Is it worth playing the nothing down game, just like some people buy a lottery ticket or two just in case their luck is with them? The answer is no. As a real estate investor you should select an investment strategy that works all the time, not on very rare occasions. Nothing down investing is like searching through haystacks to find needles. Most people who attempt this approach ultimately fail and lose whatever motivation and capital they had to buy real estate. Instead, an investor should concentrate on books and courses that teach principles that can be used on nearly all properties up for sale and not just towards the proverbial "motivated seller" that is so distraught and desperate they will agree to anything. Most people even so motivated are not stupid. Very few people are going to hand over their real estate to a complete stranger without any cash or security and trying to find these reckless souls is like a quest for the Holy Grail.
Sixth, realize that investing in real estate is risky and you can lose money. Books that promise "risk-free" or "safe" investing are deceptive. Real estate is a business where much of what happens is out of your control. You can eliminate a great deal of risk by carefully planning your decisions but ultimately your fate is more up to God than the Federal Reserve Board. Do not believe you can buy properties one after another and never lose a dime on any purchase. It doesn't work that way. 95% of real estate rehabbers lose money because they overpay for properties and underestimate their holding costs and repair expenses. Buy-and-hold investors get burned with negative cash flows all the time even when their initial analysis said everything would be positive. Markets crash, tenants unleash havoc, lawsuits are filed. Again, do not let the negatives deter you from investing in real estate but put them in perspective. They do occur, sometimes and hopefully rarely, but they do happen. Books that accentuate the positive while eliminating the negative are fairy tales. Even Prince Charming gets sued and Cinderella gets age spots.
Seventh, avoid really really expensive books and courses. The rule of thumb here is that highly specialized information will cost more than general information. Most of the real estate books and courses you see are as general as you can get. You can use your own frugality as a guide but err on the side of being cheap. I have no problem myself paying $300 for a book so long as I really need that information, have no other source for that information, and I can make thousands of dollars using what I learn. But many real estate books I see at Borders and Barnes & Noble are overpriced at $12.95.
I recently saw a real estate boot camp advertised at $14,995. Whew!
The Bottom Line
You should read all the real estate books and courses you can but be selective about which ones you buy. I buy lots of books but not always new and from the publisher. I shop thrift stores, eBay, half.com, used bookstores, and garage sales. Even the new books I buy I pretty much read at bookstores before deciding if I truly want to spend the money on them. My standard is very simple. If I read a book and learn something new from it, I buy it. I owe the author that much. I'm not going to read their work and pocket their ideas for free. But most books I read teach me nothing new, in fact, most are regurgitations of thirty previous years of real estate books.
Many books I buy as reference sources and these I'm willing to pay big money to own these because I will use them often. The same is true of real estate home study courses I can refer back to again and again. John Beck has taught me more about forced sales and tax liens than I ever wanted to know. John Behle still amazes me on the subject of real estate paper even though I've seen his Paper Game videotapes a dozen times. Both courses were expensive but worth every penny. And I bought both on eBay and didn't even pay anywhere near full price.
Spend whatever limited money you have paying off your high interest debts and then buying real estate instead of books on real estate.
Read about real estate all you can. Start with your public library. Mine has more high quality real estate books available than I could read in twenty years.
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