BBB: Beware of house-flipping seminars and other get-rich-quick schemes
07/26/2013 1:16 PM
07/26/2013 1:18 PM
Sooner or later, most cities are visited by traveling house-flipping seminars.
Often there is a celebrity’s name associated with the event, which – along with the perpetual allure of “get rich quick” – keeps people flocking to them.
Consumers should learn how these seminars work before attending, in hopes they will not find themselves among the many who have filed complaints about their practices.
Common seminar tactics
The practice of purchasing distressed or foreclosed homes at bargain prices and fixing them up to resell has become known as “flipping.” With the popularity of the television show “Flip This House,” several companies have begun offering free seminars to those interested in getting into the business.
Participants in the seminars are told how they can become wildly successful through the practice, and are urged to sign up for a longer and more detailed training session. That session, sometimes a three-day event, will cost a few hundred dollars. A pitch is then made for additional programs, which can run into the thousands of dollars – in some cases as much as $40,000 – for a couple to attend a weekend event.
The seminar-marketing scheme is well developed. Attendees describe the events as using high pressure, audience plants — called “ringers” — and ridicule of “losers” who are risk-averse. Sometimes people are even urged to raid their retirement plans in order to pay the thousands that “membership” costs.
Is good information really gained from the seminars? There are many testimonials on the Internet to that effect, apparently from people who have attended them. But there are just as many accounts from others about questionable practices used at them.
Among the many critics of the seminars are the AARP, Forbes Magazine, several BBBs across the country and even
Richard Davis, the creator and former host of “Flip This House.” Davis has said that he is troubled by how some associated with the show have used his brainchild as a platform to market “get-rich-quick” books and tapes.
“This is difficult work,” Davis has said. “You might make money, you might not, but you don’t have a shot if you don’t do this all day every day.”
Some advice on flipping
Keep the following in mind before signing up for a house-flipping seminar:• After the free initial seminar, you may be asked to invest thousands of dollars in additional seminars and training materials. You should not fall for high-pressure sales tactics. Take the time to do careful research on the opportunity and sign nothing until you understand the terms.
• Learn their refund policy and get it in writing.
• Consider taking a real estate licensing course instead. Whether you get your license, you will gain vital information and pay a lot less.
• Read up on the subject. The more information you take in, the better you will be equipped to handle transactions.
• Look for seminars from people with roots in your community instead of the traveling roadshow event. Local organizations are much less inclined to burn local bridges by ripping you off.
• Check out the company with the BBB before giving them your money.
Get-rich-quick schemes are seductive, and they are usually scams. If it seems too good to be true, it probably is.
Join the Discussion
The Wichita Eagle is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere on the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.