Real estate is a big industry, and so is real estate investing education (to the tune of $500 million, in fact!). If you’re shopping for the right investing course for you, be wary, because selecting the wrong courses can cost you a small fortune and give you no useful knowledge to show for it. Today Matt reveals the real estate investing education industry to you and tells you what you should know before forking over your hard-earned cash.
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(Voice Over): Epic Real Estate Investing Podcast Episode 27. Without further delay, your guru. Sorry. Your guide to a better life, the real estate investor, Matt Theriault.
Matt Theriault: Hello. Greetings from The Epic Real Estate Investing Podcast. The podcast that will show you how to build wealth through creative real estate investing. That’s what we will discuss today and for a long time to come so you’ll have the option to realistically retire in the next 10 years or less. And enjoy the good life while you’re still young enough to do so.
My name is Matt Theriault, author, full time real estate investor and family man. If this is your first time listening to the show. You want to do two things. First, go back and listen to episode one for the ground rules of the show. Two, download the Free Real Estate Investing Course – How to Do Deals, No Money Required. You can get that for free at FreeRealEstateInvestingCourse.com. It’s a step-by-step course of where I unveil the mystery around doing deals with no money or credit.
Speaking of no money or credit that makes a good transition for what I what to talk about today. You know you hear the words “no money down, investing all the time.” I mean you don’t need any money. You don’t need any credit.
You know if you find the right seller with the right motivation and the right situation, there are indeed strategies of which you can execute that transaction with no money or credit but don’t get it twisted.
Real estate investing, it ain’t free. I mean even if you required it using no money or credit, it ain’t free. You do need currency to transact real estate. But currency can take many different sizes, shapes, and forms.
I mean for the purpose of today’s episode and just to keep it really simple. I’m going to group currency into two specific categories for you. First, there’s hard currency like money, like dollar bills, like cheques, like wire transfers, like real money.
The second category, there’s what I like to call “intellectual currency.” Like what’s up in your noodle? What’s in your brain, your knowledge? What do you actually know?
Now although you may be able to do a deal with no money down, you do need currency to do a deal. You know both currencies, hard currency and intellectual currency and intellectual currency can be used to transact real estate.
You know the relationship between the two is a rather unique relationship. The relationship is counterbalanced meaning if you have a bunch of the hard currency, money, the less the intellectual currency that you need to complete your transactions and vice versa.
The more intellectual currency you have, the less hard currency you’re going to need to complete your transactions. The two there, they’re counterbalanced in that way. It’s kind of a teeter totter, you know if the hard currency side of the teeter totter is really light then the intellectual currency side has to be heavy and vice versa. That’s how they work together.
Another way that the two are counterbalanced is the more hard currency that you use in your real estate transactions, the more intellectual currency that you get in return. The more experience that you got and the more intellectual currency that you use in your real estate transactions, the more hard currency that you make. The better the return on your investment.
So basically just the more educated that you are around real estate, around deal structuring, around finances, the less actual money you’ll need transact real estate. And the greater are your profits are going to be.
You know just the more educated you are, the more or the better shot you have at doing deals with no money or credit. Conversely, the more money you use in your real estate investing, the more experience and education you’re going to get in return then the more experience and education that you’re going to receive.
You know those experiences maybe good ones. They may be bad ones but either way, you are increasing your education. You are making deposits into that intellectual currency. Your intellectual currency account is getting bigger and bigger. It’s growing.
So you see how they work hand-in-hand. You know one of my real estate investor buddies he has a saying. He says, “I’m either making money or I’m getting educated.” I’m either making money or I’m getting educated.
So I’m really glad that you’ve chosen to be pro-active about your real estate investing education by listening to a podcast about real estate investing. Because you know regardless what you’ve paid for your education up to this point, it’s typically much more expensive being reactive about your education. Going to that other Academy we hear about so often. Right? The Academy or the school of hard knocks.
That’s a very expensive tuition. Now speaking of tuition, when it comes to real estate investing education, I mean there’s a wide array of tuition that could pay. I mean from free books at the library all the way up to a hundred thousand dollars plus with a, from the most recognizable names in the business, the most recognizable courses in the business.
Now I don’t know. I mean is that $100,000 education, is it $100,000 better than the free books at the library? I guess I really can’t answer that because I have never taken that $100,000 educational program.
But let’s talk about your choices for real estate investing courses. I mean what are your choices? I mean many people they want to get involve in real estate investing as you know over $500 million last year was spent on real estate investing courses and education.
I mean it’s a big industry. It’s a big money. There are probably some things you should know about the industry of real estate investing education before you actually go out and make that investment in your intellectual currency.
You see about a year ago I was sitting around a table at a bar with a couple of new friends. I mean they were new friends then but they’re really good. They’re good friends now of which you know they all used to be in the industry of real estate investing education.
Now they’re no longer in that industry. They’ve given me their blessings to share this information with you today. I mean there are others in the industry however that might not appreciate me sharing this with you today.
I might make some enemies today but then again you know I’m just one little guy with little podcast on iTunes. So how much damage can I do right? Either way. I don’t really care too much about what others think as you probably could tell by the, if this is not your first time listening to the show you know.
Their opinion of me is really none of my business anyway and besides I’m not going to name names. I really probably don’t have to though. You’ll probably figure out in most cases.
Anyway, what’s right is right so today let’s discuss the dark side of real estate investing courses. Let’s discuss the good, the bad, and the ugly. Let’s do it in reverse order.
Lets discuss ugly first. Real estate investing education business model number one. You’re all probably very familiar with this: late night infomercials. I mean we’ve all seen them. We’ve been seeing them for years and decades even. Right?
You know the guru of the night, he hosts a 30-minute TV commercial known as an infomercial. He is there talking about how much money that they’ve made, how easy it was to do, and how they’ve taught thousands of people to do the same. I mean they’re flashing on the screen images of cheques.
These large cheques, these large amounts of money that they’ve made. Then they’ll cut away to the average person sitting on the couch or the average little family sitting around the table telling about how they were able to do the same thing with this guy’s particular system.
Or they might flash to the guy that used to be average and now he is sitting around the swimming pool with the bikini-clad models at his beck and call. Right? You’ve all seen it. You get the image.
It is just, it’s testimonial after testimonial and after testimonial and for you to get the same thing, all you have to do is to buy their easy to read, easy to follow book for just $19.95 plus shipping and handling. That’s it.
That life can be yours with a purchase of that book. That book contains all the secrets, everything that you need to know to make that happen for you. So the actual intent by this infomercial is to catch the person late at night while they’re lamenting over their poor life feeling sorry for themselves.
The intent is to spark a dream inside of that person and get them to call and order this book. I mean this book is going to solve this poor guy problem of no money and a miserable life. Right?
Hey, it’s marketing. I get it. I mean it’s just business up to this point because I mean this is how pretty much every industry works. You know empires were, are, and going to be built on providing products and services that satisfies a need or cures a problem.
Nothing really unique here yet. You know this book is going to cure this guy’s problem so just like all customers do. They call to buy the book. Now this is where it actually starts to get ugly. Now I’m going to lift the veil and explain to you what happens next from behind the scenes.
Okay? First, the sole purpose of the infomercial is to do nothing but raises to the surface to bring to the surface people with working credit cards. That’s it. The guru just wants to identify customers that have credit cards that work so the customer calls in and then they’re exposed to by the operator a number of upsells.
I mean the person just called for $19.95 book and plus shipping and handling. Then you discovered it takes six weeks to arrive. But you know just for another $19.95, the book can be delivered in two business days. You can have it in two days.
Then for an additional $9.95, you can purchase a code at a website where you can download the book instantly. You don’t have to wait for the two-day. You can actually pay the $9.95 then download the book as soon as you hang up the phone.
And then there’s typically a second book or a Fast Start Guide or something of a companion product that goes with the book of which if you’re really serious about your new career as a real estate investor, you can’t afford to pass that up. So there’s another $9.95 tapped on to your order.
So you just called for a $20 book but ended up at the end of the call with the $60 charge on your credit card. They keep your new life as a real estate investor is now on the mail to you and on its way. You are now super excited.
You can’t wait to receive your purchase. Right? Then a couple of days later, you see the big UPS van pull up to your house and the driver has this huge box in his arms, walking up to your front door and you’re like, “Wow, I just ordered a couple of books. What else could possibly in this big giant box?”
Right? So you get the box into the house. You slice open the seam of the box then the thing literally well almost literally explodes. I mean the box is loaded with stuff. More contents should probably be in this box. I mean it’s loaded with books. It’s got a DVD. Maybe even a VHS. Yes. They still make those things. It takes up some room too.
A quick start guide, a message from the guru, a certificate of authenticity, a little book that says, “ Read me first.” Maybe an Internet resource directory. I mean this book is loaded with all kinds of stuff. Once you get into the contents, you’ve stuff everywhere. I mean it’s spread out all over the place. Right?
That’s no accident by the way. It’s designed specifically to overwhelm the customer. In fact in the industry, they actually call this box, they have a name for it. They call this box “the exploding box.”
So the guru that just sold you this exploding box sends all of your information to another company, the “call center” or the “sales center.” They let you sit with your materials for a week or so. They wait for the euphoria to wear off a bit. Maybe you actually let frustration set in a little bit then one day the phone rings. That’s a customer service follow up call.
Right? They want to find out how your purchases are working out for you. They’re really concerned. How was this going? How is your real estate going? Do you need any help? You know with this call, they have three intentions.
First is to empathise with you and find out why you order the product in the first place. I mean they really want to know why because they’re really concerned. You know actually they just really want to know what your pain points are.
Maybe you just got laid off. Maybe you’re sick and tired working for your job or maybe the wife has been on your back to make some extra money. Or maybe you can’t find a job. Maybe one of your kids is approaching that college age and you’re trying to figure out how you’re going to pay the tuition.
I mean it could be a number of things but whatever the reason, there is a reason that they want to know your why. These are highly trained people that are very good at uncovering your reasons why.
The second intent of this call is to find out how much credit you still have available on that credit card you used to purchase the product. They just want to know how much credit that you have available.
Then the third intent is to offer you some help, to offer some help by connecting you to a coach that’s going to eliminate the overwhelm of this “exploding box.” They’re going to get you to your goal of paying your child’s tuition faster than you could do it on your own. I mean that’s the answer. That’s what’s going to bring it all together.
Guess how much this coach is going to cost you? Take a guess? How much? How much is this coaching program? Yep. It just so happens that the coaching cost almost exactly what you have left on your credit card. Ain’t that a coincidence?
So you plopped down the money for the coaching. I mean hey, you’re serious about your real estate investing career now. And the best in the world have coaches. I mean the best people in the world and all of their professions have coach.
I mean even Tiger Woods has a coach. Right? So you need one too. It makes logical. It makes good sense. So you have now purchase time with the coach. Now this company that just sold you the coaching. They go and send your information to a third company. It’s not the same company that you purchased the coaching from.
Not even the guru’s company where you bought the book. They send your information to a third company. They call it a “fulfilment company” or the fulfilment center.
Yep. There just happens to be a company of nothing but experienced professional, successful real estate investors who made so much money that in their spare time, they help others do the same over the phone.
Not really. This fulfilment company consists of a bunch of $12 an hour employee whose job is to do what do you think? What do you think is their job to do? What do you think their job is?
Come on. Give it a guess. Yep. Their job is to read back to you the contents of your exploding box. That’s your real estate investing coaching. That’s your real estate investing education. That’s the ugly part. Then that center that sold you the coaching, they cut a commission to the guru, they cut a commission to the fulfilment and they keep the rest.
It’s three different companies working in conjunction with each other three completely separate companies. Ugly, huh? I know. (laughing)
Okay. We’re doing the good, the bad, and the ugly so let’s get into the bad now. We are working our way backwards. The ugly first then let’s go to the bad. This is another scenario you may be familiar with.
The guru of the day comes into town promoting their free seminar. The seminar of which is going to transform your life. We actually got one hit yesterday. It came by. They actually advertised on the radio, in the newspaper, and they purchased a list of which they’ll email to. You see you might get an email also. They started doing this several weeks before, several weeks before they actually arrive.
You just can’t resist their message of riches and freedom. I mean and the entire thing is free. Can you believe it? I mean who can resist free. Right? You call in or you go to a website to register for the event. You got to save your time because there’s limited space. Right? There’s limited space. You want to make sure you get in.
You blocked it off in your calendar then when the day arrives, you get into your car. You drive to the local hotel. You give the person at the desk outside the room. You give them your name. They give you the little freebie item that was promised on the promotion and then you sit in the room with another 100 people or so.
Oftentimes a lot more than that but we will say a hundred people. They are all waiting for this free transformational real estate investing seminar to begin. You’re all excited to hear it straight from the guru’s mouth. Right?
Then the speaker of the day comes out to begin the seminar. You’re like, “What? Where is the guy I came to see?” Did you know in most cases? The seminar that you came in to see isn’t even the guru seminar? It’s not even the guru’s company. It’s a second company that license the name of the guru just for marketing purposes just so you actually show up. How does that make you feel?
Most people don’t realize that. Anyway you maybe a little disappointed but the person on the stage are typically good. They’re good-looking and well spoken. They’re funny and entertaining.
You know that’s why they’re up there on stage because they possess all of those qualities. They are trained professionals. Then so you’re all caught up at the end of the seminar, hanging on every word, listening to these fascinating stories about real estate investing.
You’re watching the images of large checks flashed up on the screen, photographs of the speaker’s home, photographs of his vacation home, and pictures of his boat, and pictures form exotic places, travelling the world with his family, and then it comes.
So next weekend, we will be putting on 3-day boot camp training for only $397. If you want to be a real estate investor like me, there’s nowhere you should be that weekend than at that boot camp.
So go see my associates at the back of the room and sign up. There’s limited seating. You better hurry up and get back there. If you move right now, I’m going to cut the price into half to $197. You better go.
Like a cattle, there’s a stampede. They all stand up and they stampede to the back of the room. You’ve got all of these people plopping down their $197 for this three-day boot camp that can turn any and everyone into a successful real estate investor in just three days.
But you know what? It’s not going to happen to you unless you’re actually there. So you’ve got to get there. I’ve been watching this exact scenario play out for years. There’s one here yesterday. I didn’t go yesterday but my friend went yesterday.
He said there was like 200 or 300 people there. It was actually a reality celebrity or reality celebrity. I don’t know if that even makes sense but a reality show celebrity was actually representing the company.
Given her presentation and given her testimonial on how she was so successful and she did this and she did that. She really didn’t give any information at all then more than 50% of the room got up to the back and went and purchased this three-day program.
I mean I’ve been watching this exact scenario play up for years. I can’t believe it still works but you know it happened just yesterday. Anyway, it’s just $197 though. Right? That’s no big deal. What could have hurt? That’s a rather a small price to pay to become a real estate investor. What do you got to lose?
Well if any of you listening to my voice ever been to one of those three-day events, you know exactly what you’ve got to lose. I mean you attend this three-day boot camp. You get some good information. You get all excited. You’re learning stuff. You’re meeting people. You’re actually beginning how this could be your reality.
They deliver 90% of the information. Then comes the closing of the boot camp. You hear something to the effect of that will you give me some great information. We’ve got really high hopes for you. You can do this but if you want that extra 10% of the information.
If you’re really serious about being a real estate investor, you’ll need to come to our weeklong training to get the last 10% that’s going to bring it all together for you.
That’s what you need. That’s only $4,997. And again, you’re so jazzed up after three days. You stand up and you rush to the back of the room. You plop down your credit card. I mean you’re serious about being a real estate investor, right? I mean you’ve come this far. You can’t stop now.
So you go for it. Then when you get to the weeklong training on day seven, you hear it again. Now if you’re really serious about a real estate investor, you need our coaching program or our mentorship program or our partner with the pro program. I mean there are tons of names for it but the real name should be the $20,000 upsell program because that’s what it is.
It goes on and on and on. I mean I know two of the most popular programs out there. Household names. They don’t stop selling to you until you hit about $106,000 of real estate investing education, training, and mentoring.
You know there’s nothing really wrong with the information that they provide. I mean I’ve known some people that have gone through this and they have been taught with stuff but in both scenarios the ugly and this one, the bad one, the information is decent.
Quite honestly if you took action on what was taught, you’d definitely earn your money back. I mean no doubt in my mind. I mean even if you bought the $100,000 program, I mean I believe in education. I don’t know if a $100,000-program is going to enable you to make $200,000. That’s a good trade. That’s a good investment.
If you think you’re not going to make anymore than $100,000 in real estate then real estate probably isn’t the right thing for you anyway. But what makes these two types of real estate investing courses so ugly and bad is that the intent is not to teach you to be a successful real estate investor. It’s to sell you the next training. In many cases, they keep that carrot dangling, dangling right there in front of your nose to keep you dependent on the system.
So that you have to keep paying the money for training, coaching and assistance. You really want to be successful you got to go to the next level. That type of program is not going to increase your intellectual currency.
So that’s the ugly and the bad. So what’s the good? Right? What are the good choices out there? What makes good real estate investing education? What makes a good real estate investing course? What first thing is first?
You got to make sure you’re getting your real estate investing education from an actual real estate investor not the salesman onstage. You got to get it from an actual real estate investor. One that is investing and succeeding in the current market.
That’s succeeding today not some guy that was successful 20 years ago. You’d box up all of his information that worked 20 years ago and is selling it to you today. Hey, they work for me 20 years ago. It works for you now.
I mean the market is completely changed. What worked 20 years ago, what worked just five years ago, I mean if you use that same strategy today, I mean you’d lose your shirt. So getting your education from an actual real estate investor that’s succeeding in the current market.
In my opinion, that’s the key. That’s really important. If you can find a real estate investing course or system that provides that or even a one-man company in the shape of a coach or a mentor, I mean that type of education is priceless.
There’s nothing like getting real world education from someone that lives in the real world and is succeeding in the real world. I mean for that type of education, price shouldn’t be an object. I mean I paid $22,000 for a two-year program. In hindsight, I’ve gotten no regrets. I took a comprehensive program that taught just about every aspect there is in real estate investing.
I mean every acquisition strategy and the four main exit strategies. I mean from REO to short sales to auction, the wholesaling, the multi-family to fix and flip, to buy and hold, to lease options to creative acquisition, the legal and tax strategies.
I mean it was a great all around comprehensive education that I wouldn’t trade for anything. I’ve been able to complete a successful transaction and just about every strategy that they taught giving me a very well rounded education.
I haven’t purchase anything at the auction yet, which is about everything else I’ve been able to do. That is created some great intellectual currency for me. But on the other hand, I don’t believe anyone needs to pay $22,000 to get started. I mean it was a great education for me but you know it bordered the line of overkill.
I didn’t need $22,000 of education to go out and do real estate. So the best education, the best education by far is just getting out there and doing it. I mean if you’ve yet to complete that first transaction, you’ll learn and remember more from that transaction than you ever will in a three-day boot camp.
That’s another thing. I mean you can’t learn this entire business in a three-day boot camp anyway. So don’t’ get suckered by that. Real estate investing education is ongoing. It never stops. You’ll never know it all. So don’t wait for the day that you do know it all because it’s never going to get there.
So here’s my advice when it comes to real estate investing courses. Seek them out. Do your research. Do research the company delivering the education. Do research on the person that heads the company.
Try to speak with past clients of the program. You know when you find something that feels right, go ahead and start making an investment into your education. Put some money down. You got to make exchange. You need the information and make some deposits into your intellectual currency.
It doesn’t matter whether it’s really a free book at the library or $22,000-program like I did. But here’s the key. Don’t spend another dime on education after that until you’ve actually implemented the education that you originally purchased.
That’s my saying “move at the speed of instruction” comes from. Because what you’ll find if you do indeed “move at the speed of instruction,” the less education you’ll need to actually purchase because by moving at the speed of instruction, you travel as far as you can see and when you get there, you see further.
You will be receiving the best education available that way, the real world experience. I mean there isn’t a real estate investing course available that can teach you better than the real world experience.
Having said that just don’t go out there blindly either. I mean you have to make mistakes that can be some very expensive mistakes. I mean that school of hard knocks can be carrying a very heavy tuition fee also.
I mean get the basics. Get a mentor if you can. Then start “move at the speed of instruction.” Start taking action. I mean what I mean by that “move at the speed of instruction,” if the program you choose says, to go and knock on pre-fore-closure doors. Go do it.
And keep doing it. Don’t try a few and say it doesn’t work. If the program you choose says to send out postcards. Do it. Keep doing it. Don’t do it for a couple of days and say it doesn’t work.
If the program you choose says to visit two for sale by owners a day and write an offer at each visit. Do it and keep doing it. Don’t do it for a couple of days and say, oh, this is tiring or this is boring or this is hard work or this doesn’t work. Just move at the speed of instruction.
Keep doing it. Every strategy out there works the same way. There’s a learning curve. It takes time to build up. It takes time for you to create momentum. It takes time for you to learn. The only way you do that is by moving at the speed of instruction and keep moving by doing it and keep doing it.
You’re going to travel as far as you can see. When you get there then you will see further. That’s how it works. That’s how progress is made. I mean there are countless ways to approach real estate investing.
They all work. I mean some may work better than others depending on your market and depending on your personal skills and your strengths and your experience but they all work.
They will all work as long as you do so learn then do. Learn some more then do some more. Learn some more then some more. Don’t get trapped into that learn, learn some more, learn some more, learn even more, and learn some more, and never actually end up doing.
You know contrary to popular belief knowledge is not power. It is potential power. Applied knowledge is power. The more knowledge you apply, the more intellectual currency you’ll acquire. The more intellectual currency that you acquire, the less hard currency you’ll need to transact real estate.
That’s all I got for you today so until next time. As a very wise person once said, “the great aim of education is not knowledge but action.”
To your success, I am Matt Theriault. Living the dream.
(Voice Over): Thank you for spending this time with Matt Theriault and the Epic Real Estate Investing podcast. When you have time, stop by iTunes to leave your comments and let us know what you think of this show.
And if you haven’t done so already, get started investing today by visiting FreeRealEstateInvestingCourse.com to access Matt’s free course on how to deals, no money required. Until next time. To your success, to your success, to your success.[End of Transcript]