Be Careful How You Play This Foreclosure Game
There’s a lot of excitement brewing around the investment opportunities that are becoming available in light of the ongoing foreclosures and REO auctions in the real estate market. But be careful how you play this game, there are as many scams out there as there are opportunities.
Ever hear those ads on AM radio that promise to teach you a simple no-money-down, no-experience-needed, magical method of becoming a real estate investor at a three-hour seminar? Or the newest one, the guy who says he can teach you how to fix-and-flip properties for big profits - just like he does on TV? (My four year old daughter has figured out that what she watches on TV isn’t real, so why does this guy think I’ll fall for that?)
A friend of mine shared an article in Money Magazine with me that seemed to expose one of these scams. The article is about a training program that teaches investors how to make money on foreclosures. Granted, foreclosure investing is a complex business and there’s plenty to learn, but the article makes this training sound like little more than lessons in cold calling. And while this journalist found plenty of folks putting out thousands of dollars for the course, he didn’t identify more than one succesful student of the program.
It’s just a reminder, there’s no free lunch. Foreclosure investing is a profitable business (one of my best friends does very well at it). And this market is going to provide tremendous values in the form of REO properties and bank foreclosure auctions. But like anything else, if there’s an investment opportunity that sounds too good to be true, it probably is. So before you write a check to some “Guru” to learn how to make money in this real estate market, talk to someone who’s actually doing it. And if they make it sound really hard, then they’re probably telling the truth.
RSS Feed
December 1st, 2007 at 6:13 am
Glad to see someone giving the transparency on this topic. It seems that the forclosure market will be something of a hot topic for some time to come.