Real Estate Investing Tactics

On Twitter yesterday, someone asked why I was called the anti-guru. I replied to them saying it was kind of hard to explain in 140 characters but I would put up a blog entry to explain it.

I was first called the anti-guru in the fall of 1984. A friend and I went to an "informational" meeting from someone claiming to be an expert in foreclosures. It was an hour long sales pitch with nothing of value given for the wasted hour of my time. When question and answer time came around, I had a few. My friend said I would be tagged the anti-guru by that guy after that!

Yeah, well, so what?

However, my general distrust of the real estate investing guru, who is more con artist than teacher, coach or mentor, goes much farther back. I'm not sure when it started but since my parents had rentals when I was growing up I knew a little bit about how this stuff worked. As a result, I could generally spot the con man, uh, I mean real estate guru who only wanted to help others.

I have been compared to John T. Reed but honestly, he is in a class all by himself. As I get older, I may reach that level of curmudgeon but I hope not. It's not that I want to expose these gurus because it is a waste of time. I don't keep a compiled list of gurus and their materials pointing out all the flaws. To be honest, at one time the Field Guide for Real Estate Investors had such a list but it was discontinued a few years ago. I just avoid them like the plague they are.

Over the years, I have been sucked into debates with some of these clowns. A rather extensive one was on Magic Bullets a few years ago. I was knocked around pretty good because I dared question some of his "teachings". And not just by the bogus guru but also many of the members there too. It culminated when this clown made some threats and claims of illegally pulling my credit. Unfortunately for him, he did it in a documented way and when I reported it to the FBI because it crossed state lines, they actually took interest in it.

He has since been exposed as a fraud and several states have pursued him for securities violations. I don't know the actual number, but if you add up the various amounts alleged, it appears he defrauded his investor followers of over a million dollars.

Sure, my report of his threats might have had something to do with the investigations getting underway, the timing was close, but I doubt it. In the end, his teaching and investing "empire" crumbled under its own putrid corrupt weight.

Life is too short to deal with that type of stuff. So, I just laugh at them and ignore them.

I also try to put forth accurate and well researched information. See, that is where the gurus fall apart. When you take their "teachings" and start to dig deeper into them you often find they are based on a nugget of truth, but that is just about it. They embellish much beyond that small, sometimes microscopic, nugget of truth.

A few months ago I said 2009 will be a shakeout year for many of these bogus gurus. They are marketing machines but their materials are very dated. They haven't worked well for years and they flat out won't work at all in this current economy. By the way, make no mistake about it, this economy is going to be here for a long time. Then even after it recovers, the real estate investing realities it leaves will be much more similar to today than 5 or 10 years ago.

The shakeout will happen but that does not mean they will go away. Look at Robert Allen. His methods he taught in the 1980's have been totally discredited. Using those techniques, many people over extended themselves and charged into financial ruin. Allen himself declared bankruptcy! Yet, he is still around, with new "systems" he markets.

But, that is the secret to spotting the difference between a guru and an expert. The guru is not making their money being the expert, they make their money claiming to show you how to be the expert!

I have been a technology consultant for much of my adult working life and an active investor at the same time. A consultant draws upon their experience, knowledge and training to solve problems and give advice. A consultant whose clients have a 99+% failure rate goes out of business very quickly. Yet, these gurus have just that kind of record! Sure, they claim it is not their fault, it is the fault of the student for doing this or not doing that or just not having a big enough dream. With the gurus it is a numbers game. They rely on a steady stream of people who will ignore the pitiful results and charge headlong chanting they will be part of that less than 1%!

Interestingly, in every single state in this country with a lottery, your chance of winning back more than you spend on lottery tickets is higher than your chance of success from buying these gurus books, eBooks, seminars, bootcamps and coaching programs. In fact, it is often twice as high with lottery tickets!

Wow! Maybe I should write an eBook and become a guru showing you how you can make millions by buying an item that only costs a dollar!

No thanks, I have a conscience.