My Beef with Gurus Part 3 of 5

"Join us this weekend and learn 15 ways to make money in real estate NOW!"

uuuhhggg...give me a break! 

Have you ever heard those commercials?  Guru's offering weekend classes where you can learn 15 ways to make money in real estate?

The reason they advertise that you can learn 15 ways to make money, is they know that in your mind, if you are being instructed on 15 different ways to make money, that SURELY you could money on at LEAST one of those ways.  

But the truth is that during the weekend training, you are only given a very small amount of information on any one method.  There is no possible way to provide sufficient information on 15 investment techniques in a weekend course.  

I only instruct on ONE technique, and my course is FOUR DAYS LONG!

So after your weekend course, you are all pumped up with almost no real information on any of the 15 techniques....but WAIT....if you act now..you can sign up for the next level of courses to learn more!  

The investors that are actually successful at real estate really only focus on one method.  They find the method that fits them, their interests, and risk ability, and they focus on that one method. 

Don't try to learn 15 different techniques.  If you do, you will succeed at none and fail at all. 

Find the technique that fits your comfort level and interests and focus on that one technique. 

My Beef with Gurus Part 2 of 5

This post I want to talk about the "levels" of courses that the gurus offer.  I was looking at the site of one very well known gurus, and he offered a basic course for about $4k.  This is the course you get when you first sign up.  BUT, if you want to learn MORE..then you can sign up for the next "level", which was about $3k more.  The total cost for the whole enchilada was over $13,000!!! Holy Cow!  

What do you think you get for $13k?  A bunch of fluff and nothing is what you get!  In my opinion, which I'm sure is highly regarded by many around the world....if you see any sort of training that offers "levels" of courses, you have to realize that it's likely a rip off and waste of money.  

By someone offering "levels" of courses, that means that they are knowingly holding back information from you in order to suck more money from your pocket.  How does that make you feel?  It should make you feel like you need to walk away.   

I wonder if the $13k includes an autographed picture of the "guru" or even a Christmas card.  I can assure you, that if anyone sends me $13k, I will immediately mail you an autographed picture of myself, AND I will add you to my Christmas card list!

My Beef with Gurus Part 1 of 5

If you've watched late night TV, you've seen the real estate gurus touting their real estate courses that you order for only $499 or the weekend "bootcamps" where they pack the seminar rooms then direct you to the back of the room to buy their courses.  Over the next number of postings, I'm going to discuss the issues I have with these people.  

The first things I want to address, is the idea of starting a business by reading a little booklet or watching a DVD.  Realize that the investors that are actually successful did NOT learn how to do what they are doing by watching a DVD.  They learned it from experience, mistakes, and making adjustments along the way.  They are successful because their investing is a business.  If you want to have a successful business, do you honestly think you can learn it from watching a DVD?  OF course not!  The information you get from those courses is nothing more than the THEORY of a particular style of investing.  Let's say you wanted to be a custom home builder.  But you know nothing about building, or running a business.  You're watching TV late at night and someone says, "Buy my course on how to be a home builder for only $499!" So you buy it and the DVD tells you that you will need wood, some nails, and a crew of construction workers, and that the house should have rooms, and a ceiling, and you should top it off with some shingles.  That's it.  Do you really think you're ready to start your own custom home building company now?  NO!  Yet that is exactly what the courses offered by the gurus give you.  Very basic information on the theory of real estate.  Certainly not enough to start a company with!  

Why I Limit The Number of Students

I was contacted by a person last week that had been hoping to get into my class last month, but the class filled up before he could get in. Due to his schedule, he couldn't make it to the next class in September. So he asked why I only allow a VERY small number of students per class.
I think this is a valid question, and I think a very important point to address. The reason I only offer between 6 to 12 seats per class, is that what I have to offer is a complete business plan, so I teach a very in depth course, and if I offered 75 or 100 seats in a class, I just don't think the students could absorb all of the information, and I wouldn't feel like I would be able to provide the attention to each student that I feel is necessary.
Keep in mind this is not just a course on the theory of lease options, it's about starting a business.
To see the company I teach you to duplicate, take a look at my website
www.leasingtobuy.com

Lease Option Marketing Mistakes

While trying to grow my lease option business, I had to try various ways to try to market it.  The “gurus” all said “once you get the houses, getting tenant buyers is so easy, you hardly have to do anything!”  Obviously, they had never actually done a lease option.  They suggested bandit signs on street corners, newspaper ads etc.  These “guru’s” are boneheads.  Here’s the truth.  If you put a bandit sign out, you will get bandit sign type of calls.  In other words, you will get calls from people that are not worthy of your time, and have $500 to their name…if that!  Don’t put bandit signs out on street corners or telephone poles.  It diminishes your business and what you are trying to achieve.  Same goes for those “nickel papers” that the bonehead guru’s tell you to advertise in.  You will get calls from “nickel buyers”!  A waste of your time.  As far as newspaper ads, the cost to advertise in the papers has remained expensive, while the response rate has gone dramatically.  Sure you can try a few ads to test the water, but most people don’t look in the paper anymore for lease options.  They go to the internet.  I teach people how to use the internet, REAL signs, and electronic newsletters to generate the GOOD phone calls.  It may take a couple of months to really start gaining ground, but at least you won’t be wasting your time utilizing silly “guru” tactics such as posting notices at apartments!

 

How to Form an LLC

An LLC, or Limited Liability Company, is probably the most popular company entity that small businesses form to start their businesses.  There are a number of companies that advertise their services to help you incorporate, or form an LLC.  A number of these companies do quite a bit of advertising on the radio and TV.  But the truth is, that you can form an LLC fairly easily and on your own, and avoid paying those third party fees.  Those companies (such as Legal Zoom etc.) that advertise their services may say they only charge you $200 or so to form the LLC, but that is just THEIR fee, not the states fee, which must also be paid!  So the easiest way, and most affordable, is to do it yourself, directly through your Secretary of State.

 In order to create your LLC, you’ll want to contact your states Secretary of State (SOS), which you can easily do online.  BEWARE!  If you do a search for Secretary of State, you will see many websites that try to be CLOSE to the SOS’s website.  Make sure it is the state’s actual SOS website.  You can complete the forms online for your LLC.  The info needed is very simple.  Company name, manager, address, etc.  You will need to use either your home address or office address, as you do not want to use a PO box.

 Assuming it will be a single member LLC ( no partners…partners stink anyway!) you will be the Managing Member of the LLC.  If you decide to have partners (I STRONGLY suggest not to!) they will be Members of the LLC.

 You will need a registered agent.  One of the mistakes people make is to call themselves the registered agent.  The registered agent is the person that would receive documents from the comptroller, or even a lawsuit.  You want to find a 3rd party registered agent.  A simple search can find a registered agent service.  In Texas, I recommend Lawyer’s Aid Service.

There you go!  You will then get confirmation in the mail, and you will likely start getting all kinds of junk mail and solicitation in the mail as well addressed to your company.  Some companies stalk the SOS for new corporations and LLC’s to send them stuff for mailing labels, credit card solicitations etc.

 The next step is to go to the IRS website and get your EIN number.  You can actually do this over the phone as well. VERY easy.  The EIN number is the Employer Identification Number, which is used on the tax stuff, open bank accounts etc.

 

START A PERSONAL BUDGET BEFORE STARTING A BUSINESS

Our last blog had input from Niedra Johnson, a CPA and CFP about mistakes small business owners make.

One item we discussed was how important it is for a soon to be small business owner to do a PERSONAL budget BEFORE starting the new business.  I know, I know, budgets are boring.  But this is easily done, and is important so you know better what to expect financially.  If you put a personal budget together prior to starting your business, then you will know what you are currently spending each month on your current expenses.  Then you’ll know how much you need to pay yourself from your new business.  Now, since most businesses don’t actually turn a profit for a while, you probably won’t be able to pay yourself much if at all starting off.  But it’s important to know what you need to survive.

            As you get your business rolling, you’re going to have business expenses, and if you haven’t figured your PERSONAL budget, then the BUSINESS expenses/budget could take you under financially. 

            Know what  your personall, current outgo is now, and you can better manage what you need to bring in from the new business to quit your current job and take on the business full time.