They sound attractive. Build wealth in real estate by flipping homes. Learn the secrets for FREE by attending a seminar near you! If you have a free afternoon and you’ve been interested in getting into real estate investing, you might be thinking, "Why not go? What have I got to lose by attending a free house-flipping seminar?"
Countless people who have thrown good money after bad have uttered those same or similar words. It’s the people behind the seminars who usually make out like bandits, not the seminar attendees. Find out nine things you, as a real estate investor, should know about house-flipping seminars before you go to one.
1. House-flipping seminars have been around for a while
I interviewed Mark Ferguson, an established and successful real estate investor and real estate agent, back in 2016 about these house-flipping seminars. Even back then, they’d been around for several years.
The takeaway from that interview was that it could be possible for investors to benefit from attending a house-flipping seminar. But many of these seminars, instead of teaching attendees how to earn real money flipping houses, are just ploys designed to get attendees to spend real money. Not much has changed over the years.
2. Nothing in life is free
House-flipping seminars, similar to timeshare spiels, are filled with well-trained salespeople whose goal is to get you to part with your money. Regarding timeshares, people might think they’re just signing up for a free vacation weekend, only they somehow wind up spending upwards of $20,000 by coming home a timeshare owner. (Note the proliferation of timeshare exit companies that stay in business helping get people out of their timeshare deals.)
House-flipping seminars use similar tactics. The organizers make lots of promises, like teaching you the secrets of getting rich flipping houses. They have their sales presentation down to a science. But seminar presenters rarely give up the goods for free. Think of the first seminar as an advertisement to get you to sign up for another seminar, one that will not be free.
3. The free seminars are teasers
The free seminars are usually teasers that provide little useful information on how to make money flipping houses. They are instead designed to get attendees to sign up for another seminar, usually a two- or three-day event, that costs a lot of money, generally hundreds or thousands of dollars.
The Holy Grail for many seminar organizers is to get prospective investors to take another, even more expensive step: to either hire a mentor or coach, the cost of which could be between $15,000 and $40,000, or fork over that much money for additional workshops, products, and services.
4. You could go into debt
You might not have the kind of money, thousands or tens of thousands of dollars, organizers are requesting from you to pay for private coaching or advanced seminars. But seminar organizers have that figured out.
They might encourage you and the other attendees to apply for a new credit card to get the cash or suggest you request an increase in your credit limit. They also might encourage you to take out a second mortgage on your primary home.
Remember, this money is to pay for the coach or advanced training, not to fund the real estate investment itself. And once you have gone into debt to pay for advanced training, it will probably be more difficult for you to buy your first flip.
5. You might be asked to commit fraud
You might be asked to lie about your income in order to get a higher credit limit. Instead of having you state to the credit card company your current income, some seminar organizers allegedly instruct their students to state their potential income.
They rationalize this approach by telling attendees they would surely earn this additional income once they finish learning secret or advanced house-flipping techniques. Of course, this would be a deceptive practice.
6. The coaches are often a disappointment
If the house-flipping seminar is one in which coaches or mentors are offered, you might learn the business if you happen to get a great, qualified coach, but usually you won’t.
The coaches or mentors associated with house-flipping seminars often are not house flippers themselves. Many times, they're simply people who have completed one successful flip and know the very basics of the business. Ferguson estimates there is only a 1-in-10 chance of a seminar attendee getting a qualified coach from a house-flipping seminar.
A great coach should be an active real estate investor who knows your local real estate market. If you find someone like that, you could very well benefit and learn the business. You might be better able to find a good coach through a networking group, such as a real estate investors association in your area, than you would from a house-flipping seminar.
7. You probably won’t meet any celebrities
Part of the draw for house-flipping seminars is the association with celebrity flippers: Than Merrill of A&E’s Flip This House, Christina Anstead and Tarek El Moussa of HGTV’s Flip or Flop, Hilary Farr of HGTV’s Love It or List It, or Peter Souhleris and Dave Seymour from A&E’s Flipping Boston, just to name a few.
Seminar advertisements that use the celebrity endorsements often make it look as if the celebrities will be at the seminar. And sometimes they are. But most of the time, the celebrities will not be there. They might send a video of themselves, but unless they happen to be in the area and have some free time, they most likely won't show up.
What really happens with celebrity endorsements is that the celebrities make a licensing deal with the house-flipping seminar companies, which allows the companies to use the celebrity’s name. There's usually no agreement that the celebrity must attend each seminar.
8. The FTC has charged one company with being deceptive
In late 2019, the Federal Trade Commission charged Zurixx, a Utah-based company that puts on house-flipping seminars, with lying to consumers. It’s the same playbook that most of these seminars use: Get people to sign up for the free seminar with the real intent of getting them to spend money. For example, in the case of Zurixx, that spend equals a three-day workshop that costs just under $2,000. The people who pay the $2,000 are then targets Zurixx would use to try to get upwards of $40,000 for additional services.
9. There are better ways to learn the business
It’s important to learn about the house-flipping business and have a real estate strategy before just jumping into your first real estate deal. And there are probably better ways of accomplishing this than attending a house-flipping seminar and spending hundreds, thousands, or tens of thousands of dollars.
You need to understand your local housing market, for one, so you’ll know whether the area is a good investment area for a flip. You’ll also need to know how to estimate the renovation costs and then determine whether this will be a good deal considering the costs so you can make a profit. You should know contractors you can trust, and you should either have money or know where to get solid financing.
You can join a real estate investors association in your area, read books, or listen to podcasts that go in depth on the topic, or even hire a coach. But if you do hire a coach, make sure they have plenty of experience, are a successful flipper, and know your local area.
Real estate investing could lead to financial freedom. But attending a house-flipping seminar is usually not the best way to get into real estate investing.
Instead of instructing seminar attendees to use their money to fund an investment property, seminar organizers try to get attendees to use their money to pay for more and more training. If you have available money, then you might want to use it for a down payment and closing costs to fund your first house flip instead of handing it over to a house-flipping seminar operation.