December 27, 2016 • By Dennis Beaver
They’re back! Free home-flipping seminars are back, and as we wrote slightly more than two years ago, most score high on our Scam-O-Meter, having a single goal: separating the often desperate, generally naive and trusting from their money with one misleading statement after another.
If you are considering attending one of these “free” seminars — or just did and can’t wait to write them a big check for their the three-day training session, Google the company and read the posts as well as Better Business Bureau marks which will generally are in the F category, and it’s not F as in fabulous.
The following email from a Central California reader is a red flag not to be ignored.
“Mr. Beaver, last Saturday morning, I sat in front of my computer and attended a two-hour webinar about ways to easily secure our financial future by flipping homes. The program was conducted by a former TV Home Flipping star, and it was so convincing that I phoned in and purchased their $2,000 three day intensive training program to be held in early 2017. Then I told my wife.
“She said that I am a complete idiot to believe their claims. Well, she didn’t quite put it that way, but you can’t print the language she used! But she also recalled that you had written about these seminars which usually turn out to be scams.
“It is Monday morning. Please tell me if I should cancel using the three-day cooling off period and inform my credit card company.”
You’ve probably at least spent a few minutes watching home-flipping television shows, which convey the idea that the average viewer can invest a small amount of money, fix up a dump, and make sky-high profits. Often the stars of these shows go on road with seminars, promising to share their secrets with anyone gullible enough to sink upwards of $30,000 into “advanced training.” Many have been sued by state consumer protection departments for fraud.
It begins with a radio ad or phone call about an upcoming, free seminar in your town which promises to teach you the secrets of how to flip homes with no money, poor credit and no real estate knowledge. You attend this slick presentation, and in an intense, religious-revival-like atmosphere, are cajoled into paying two grand for a three day advanced program.
There — urged to cash in your IRA, taking a loan, borrowing from relatives or increasing credit card limits — you’ll be sold one costing $30,000 to be given “the secrets.”
“But there are no secrets. It is the Emperor’s New Clothes. House flipping has enormous risk and those successful at it are seasoned, experienced people with money they can put at risk without harming their personal economic health,” Sacramento real estate appraiser Atom Levi told You and the Law.
Forty-nine years an MAI and SRA appraiser, Levi is also a licensed real estate broker. He is well acquainted with home-flipping seminars “that do little beyond selling hope to the desperate and deceiving the naive.”
“Typically, the people who do this are investors with deep pockets and it is a full-time job for them,” he underscores.
With the web address our reader provided, we clicked and listened to a repeat of the same program. In our legal opinion, based on what it left out, this was an incredibly high-energy con job. While the company’s ownership and presenter does not appear to be connected to the event we attended two years ago, it was a clone, promising to give students “the secrets” allowing anyone to make oodles of money in real estate by:
1. Buying a home “wholesale” and immediately selling it. Left out is the fact that you could be violating a state’s real estate laws, acting as an unlicensed agent.
2. Promising “We will lend you the money to buy a distressed or foreclosed property,” but not stating that you will likely need thousands of dollars for required repairs and to meet building code requirements.
3. Making a fortune buying tax liens. To Levi, “They leave out the unpleasant truth that this is one of the riskiest forms of real estate ownership with potential losses into the tens of thousands of dollars.”
4. We will provide you “inside, secret information on properties” unavailable to others.
“If they have any,” Levi feels, “it will be about as valuable as a fraternity’s secret handshake.”
Of course, we immediately emailed, texted and phoned our reader, telling him to go to his post office and send the three-day cooling off notice with tracking. Also, to notify his credit card company of the cancellation.
For all others, stay away, that’s our recommendation.
Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.