Why you should avoid buying anything from an infomercial at 3AM

You have to be careful because everyone wants to separate you from your money. I think about this fact every time I read the emails that land in my inbox advertising for this or that.

And then there is all the commercials on tv. Buy our product because you're getting older, uglier, sadder and sicker as time rolls on and if you buy our products you'll be less of those things. But you need money to buy all of  those things. And when you don't feel like you have enough, people will go through all sorts of lengths to get it. So here I am, currently unemployed and wide awake at 3AM watching the latest infomercial selling the idea that life can be easier if you follow our system to be a real estate investor. Immediately, I'm skeptical. If it sounds too good to be true, it probably is. Bait and switch. These were the things that were running through my head watching advertising for a seminar to get rich quick flipping homes cloaked as become a real estate investor.

So here's how it goes. You attend a seminar. You are baited by a book and some sort of minimal free giveaway of cheap electronic equipment they bought in bulk. You get some general information, but not enough to do anything with unless you buy into additional workshop. So you have to then buy into the workshop. And then at the workshop, you are sold access to the experts and walkthroughs. "This is how I did it and if I can do it, you can do it, too."Learn the steps to success and repeat these steps over and over again."

Doug Clark. Who is this guy? Someone from Utah that flipped houses and was filmed doing so to make a certain type of reality tv show. You can find this out if you search for "Flip Men" and watch shows on youtube. The tv show went off the air four years ago. Investigating further, the Better Business Bureau currently has a great example of what it's like to go through their learning process and you can read how these poor people from New Mexico feel like they were duped:

http://www.bbb.org/utah/business-reviews/seminars-and-training-wealth-building-and-real-estate-results-not-substantiated/doug-clark-in-lindon-ut-22364446/Complaints#breakdown

So how does this go for them? They buy an LLC. They make a business selling you the same LLC paperwork to you. You pay the filing fee. They call an infomercial company and create 10 minutes of script that's repeated 3 times to create a 30 minute show. They hire a host to ask scripted questions of spokesperson. The background for the host looks like a newsroom or a talk show stage. The spokesperson looks like they are sitting inside a beautiful home, but it can be a photo projected on a green screen which provides the desired appearance for you to think, "Yeah, I want what this guy has." In actuality, he's sitting in another part of the studio. Once the infomercial is filmed and produced, they rent seminar rooms in hotels around the country. They develop presentations at four different levels. One for the free talk to get you to come in (the infomercial). Two to provide some more information to bait you to buy the seminar. (They have to sell enough seminars to pay for the space they rented on credit cards.) Three is to buy the access to the process and techniques they are familiar with but you're not..Maybe even a website they feed with the foreclosures that you can get from newspapers yourself.  They prey on the fact that you're not confident you're doing things right because you're not gaining the expected results they tell you you should be having so... Four you get access to the experts... the people that keep you in the process so they can use any amount of success you may have to bolster what they are trying to sell in the first place.

You paid for a seminar, a LCC, you maxed out all of your credit cards and then paid for access. You haven't bought a foreclosed home yet which is what you wanted to do in the first place. You'll need more money to do that so you'll have to get others to pay for the purchase of a foreclosed home reducing your profit margin. You'll have to pay for others to fix the home because you're probably not a licensed contractor and then will reduce your profit margin more. If you couldn't find other serious investors, you went to a bank or mortgage company to get a loan and then the mortgage comes due between 30-60 days. That's the same time frame you have to fix the property and sell it. This is why you want a buyer on contract to get you out from under having to pay for that mortgage payment. They also forgot to tell you you also have to file two tax returns, one personal and one for your business. They also don't tell you that as a real estate investor, you're responsible for self employment taxes on all money you make.

You don't need to buy someone else's seminar to know that everything you do involving a home is expensive and you end up paying for it in the end. You don't need to buy someone else's seminar to tell you that if the mortgage payment is more than the going rental rate, you'll forced to sell. Guys like these love to sell seminars like these in states where the real estate is expensive so you have no recourse when you fail because you didn't follow their program.