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Consumers Cautioned Against “Free” Real Estate Seminars

By Sally Maison
Published: Tuesday, January 5th, 2010

People see it on television and on the Internet: advertisements or infomercials encouraging viewers to join a free seminar that would make them millionaires by buying real estate with no down payment, regardless of their credit score. However, some industry specialists caution consumers against advertisements such as these, since they may not be as free as presented by their commercials and could force participants to lose thousands of dollars.

Consumers Cautioned Against “Free” Real Estate SeminarsConsumer protection groups warn that the real estate business is quite complicated. It needs careful study and experience along with a team of professionals to help one properly assess, negotiate, manage, and finance an investment. Despite possessing all of these, many investors went bankrupt or suffered huge losses this year when the real estate market declined, as it did in the last quarter of 2008.

Advocates further warned that those free seminars do not really teach people how to get rich. Instead, they are conducted to convince participants into joining a longer workshop, which typically lasts three days, where the organizers will purportedly teach the secrets to become a successful entrepreneur in the real estate market. Advocacy groups noted that these seminars often require consumers to pay thousands of dollars in order to participate, with the promise that those who complete the program could earn tens of thousands of dollars after 30 or 60 days.
Specialists tell consumers that during those seminars, the instructor typically begins by telling participants about all the vacations he takes now that he is secure after succeeding in real estate. He will add that he has purchased numerous properties in the participants’ area using that same system he will “share” to them.

Then, the instructor would promise to teach everyone how to find homeowners who are willing to short sell their homes so they can possess property at a very low price then sell them later for a bigger gain. He would then assure his audience that a homeowner would gladly sell his property at a way lower price to avoid ruining his credit score.

Afterwards, participants will be convinced that they can easily sell their purchase with the help of real estate magazines where they can place their own ads. They will also be assured that they can acquire property without approval from an owner’s bank, even if their credit ratings are low as well.

However, advocates say such a maneuver is practically impossible, since taking a property without a bank’s approval can no longer be done these days, although it was possible 15 years ago. Additionally, consumers with low credit scores may find it difficult to get financing, making real estate success all the more difficult.

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