Provided by Bigger Pockets
Guru programs are notoriously difficult to assess in terms of quality or outcome for their students. Some students rave about their gurus, while some complain about how they got ripped off by a fake guru.
There are a few patterns that raise yellow and/or red flags that I want to call out that are concerning and should make you skeptical when deciding whether to spend thousands (or sometimes tens of thousands) of dollars on guru training.
Gurus will typically flaunt a network of connections that include a celebrity that they have “invested” with or promise will be involved in their course or seminar. Chances are the celebrity will not make a live appearance, and the closest you’ll get to the celebrity is a recorded video of them discussing all the massive benefits of real estate that will surely turn you from the “average Joe” to a rock star owning a yacht.
Real estate investing and wealth building is a very long-term game that requires significant capital, education, and risk. Real estate is a very slow, long-term investment that includes cyclical markets that can take years to recover from.
Putting in no money, spending no time on education, and relying on a course to help you get your first deal is the best way to increase your risk and start off on the wrong foot. No and low-down payments are very common practices you will hear to get you started but let this be your warning that if you have no money, you should reconsider investing in a course or your first deal.
Additionally, speaking to the “no money needed” advice, you will be surrounded by advice that will teach you “why” you should invest in real estate instead of “how” to actually invest in real estate. Do not get shiny object syndrome, and definitely do not let the redundancy of FOMO (fear of missing out) affect your decisions to invest in real estate.
Here are a few very common phrases that should ring alarm bells that you should definitely avoid:
Legitimate programs offer a money-back guarantee if you are not satisfied with the product. A big way to increase your risk is to join a program, group, or seminar that comes with an intro fee but does not mention a money-back guarantee in its description.
Expectations should vary based on the duration of the programs as well. If you are 14 weeks into a 15-week program, I would not expect you to want a refund on your payment. But a two-week program? I would definitely expect some form of a money-back guarantee.
You’ll be inundated with content about how the guru was just like you before they became ultra-wealthy. You will find that the seminar is focused on the benefits of why you should invest in real estate, how your day job is holding you back from becoming a successful entrepreneur, and, of course, opening your wallet to pay for an advanced course.
You will likely see that there is a massive discount on the advanced course if you sign up during the free webinar, driving even more FOMO. Do not be pressured into making a decision on a deal that sounds too sweet. If it is a great deal while you are in the webinar, it should absolutely be a great deal tomorrow as well.
All investments come with risk. So, when you’re told of “guaranteed methods to get rich,” run in the other direction.
You are flat-out being misled if you do not think there is any risk associated with investing in real estate. Like any investment, real estate can go up or down. You can earn a big payday when you research and make a sound investment, but you can just as easily lose big if you don’t know what you’re doing. That’s not to mention factors that are unexpected or completely unknown that can ruin a deal.
The “reviews” for a guru come exclusively or overwhelmingly from individuals who create accounts on BiggerPockets with seemingly no other purpose than to dispense undying love and/or personal loyalty to the guru, with lengthy commentary about the complete life turnaround that spending $5,000 to $100,000 had in a very brief period of time, rather than a rational assessment of the pros and cons of the program and their outcomes achieved so far.
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Now that you have seen some of the most common tactics used to get you hooked into the trap, you are likely wondering: How do I avoid this?
I grew up in the digital age and can attest to the fact that it is extremely easy to fall into the “guru trap” with how accessible online education has become. Aspiring to become a real estate investor takes numerous hours, days, and even years in your educational phase, and to be steered away from get-rich-quick habits in this business will only benefit you in the long run.
I have paid for courses and programs that I did not receive the expected value in return, so please let the following tips to avoid the trap save you time, energy, and hard-earned capital.
This will take you five minutes and will give you a wealth of information about a particular guru from multiple sources. You will certainly find positive and negative feedback and likely a few golden nuggets about the pricing of additional programs that would come later down the road. One step further than Google, I’d add, is to check the Better Business Bureau website to see whether consumers complain that the company hasn’t followed through on its services or promises.
I am going to beat this drum as long as I live. There are numerous ways you can find out information about a guru before you inquire about their offering directly from the source. This is not a shameless plug for the BiggerPockets forums, but I will guarantee you that our community will steer you away from these types of traps.
There is likely not a question about real estate that our community has not answered in detail over the many years of existence on the forums, but you should never let that hinder you from asking again and seeking additional information. We have an extremely dense population of investors who have either had the same question or have gone through a negative experience that will be shared and bring more light to the situation.
Very commonly, you will see that you need to upgrade to the next tier to unlock a basic service, tool, or platform that you will likely be able to use for free! Do not upgrade to anything extra if you have made no money in the “free” service. If you have made no money in a free program, why would you make money in the advanced program?
As emotional as you think investing in real estate is, it all boils down to your numbers. I will guarantee you that talking to a guru will make you feel like you are on the sidelines and that you will be missing out on the most golden opportunity of a lifetime.
Automating a system, subscribing to tiered communities, paying for coaching calls, taking online courses, and paying for a private networking trip (AKA a vacation) all sound amazing and feel like something an investor would do daily nowadays. However, this is not true, especially for a beginner. There is no secret in the sauce except for taking consistent action.
Here are some action items:
And there are so many more things I could list that I could list that would benefit you more.
I have been lucky enough to stumble upon BiggerPockets at a very early stage of my career, and being able to ask questions to a trusted community saved me hundreds, if not thousands, of dollars on education alone.
Do not make the same mistakes that we see recurring on a consistent basis, and always do as much research as possible until you feel comfortable moving forward with your endeavors. I have made mistakes in the past and will continue to make mistakes in the future, but these mistakes will certainly be insulated and far less expensive due to the guardrails of the trusted network I am extremely proud to be a part of.
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By Jordan Teicher
Discover how rent reporting can incentivize on-time payments, strengthen relationships with renters, and streamline rent collection.
In the United States, approximately 26 million people are “credit invisible,” lacking a history with credit bureaus. This makes it hard for them to get approved for things like credit cards, car loans, or even their next home. However, renters and landlords alike both have an easy opportunity to help address this issue.
Zillow’s rent reporting feature, which debuted in 2023, gives renters a way to build their credit history and possibly boost their score by reporting their on-time rent payments to Experian and Equifax. For landlords, having renters opted in to this feature can also lead to several major benefits.
The prospect of building credit may incentivize renters to pay their rent on time. Zillow’s feature, which is free for all renters, only reports on-time payments and is designed to encourage renters by contributing to a positive credit history with each punctual payment.
For landlords, this could mean fewer late payments and less time spent chasing down rent, improving cash flow and operational efficiency. To get paid more reliably, set up Zillow Payments for your properties. Rent collection is free for your business, and there’s no fee for renters who pay with ACH transfers. (There’s a small fee for them to pay rent with debit or credit cards.) When your tenant completes the Zillow Payments enrollment process, they’ll be able to opt in to rent reporting.
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Rent reporting and the rest of the Zillow Payments platform can help streamline how you collect rent and manage your business. Renters receive automated reminders and can set up autopay, so you always know when to expect deposits. Our 2024 Rentals Consumer Housing Trends Report revealed that 69% of renters indicate they want to pay rent online, but only 60% typically do. This system also keeps a documented history of payments, which can be beneficial for tax preparation and resolving disputes.
Offering rent reporting can improve your relationship with renters. Less than 5% of renters have their payments included in their credit history. However, over 80% of renters want on-time payments to impact their credit score, according to Fannie Mae. So, there’s a large untapped market of renters who would likely appreciate a landlord who understands the advantages of reporting and gives them the opportunity to build credit. Happy renters may be more likely to renew their leases, reducing turnover and the costs associated with re-renting properties.
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Source: Rental Housing Journal
More and more Americans are renters by choice as the modern American Dream involves renting rather than the desire to own a home.
While the American Dream might have included various components throughout the decades, one constant was the desire to own a home. For modern dreamers, however, that isn’t necessarily the case.
According to The New American Dream Report recently released by the property software management company Entrata, 41% of renters claim their American Dream has nothing to do with homeownership. In fact, 20% anticipate being lifelong renters, which represents a 33% increase from 2021.
The causes for this paradigm shift are wide-ranging, but it certainly includes the idea that skyrocketing home prices have made homeownership an unattractive option for many—even for those who can afford to take the plunge. In addition to the long-term financial commitment, property upkeep, taxes and insurance are stressors that can be avoided by renting. The report, based on a survey of 2,000 renters conducted in January, found that 23% of respondents enjoy the location flexibility provided by renting and 17% like the financial flexibility of not being tied to a mortgage.
Additionally, renting no longer carries the negative stigma of the past, when it was largely perceived as a necessity-based alternative for those who couldn’t afford a single-family home. The term “renter by choice” is more common in current times, particularly with a wide range of available rental homes with attractive amenities and an increased supply of single-family build-to-rent homes.
When you consider the price and commitment components of homeownership, contrasted with the convenience-based factors of renting, it helps underscore why homeownership is not as much of a standardized American goal as in the past. According to the study, 66% of renters say renting fits their current lifestyle more than homeownership.
Essentially, experiences and flexibility have become greater priorities to the modern American.
Some might make the counterpoint that it’s easy for someone to dismiss homeownership as a priority when it isn’t financially feasible.
But the perception that renters are too young or financially unequipped to purchase a home has become something of an outdated generalization. The study shows that 33% of renters say they could afford a home that meets their needs, but ownership doesn’t necessarily fit into their current lifestyle. Additionally, 25% of renters with credit scores 750 and above—those who could easily qualify for a home—never want to stop renting.
For many, renting also serves as a key component to their career paths. According to the study, 65% of renters are happy with the direction of their career and 35% believe being a renter gives them more career opportunities than being a homeowner. Additionally, a robust 63% of renters indicated that they have a similar or better quality of life than their parents at a similar age.
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The traditional notion of “I need to save to buy a house” doesn’t apply to many, as a sizable contingent of younger Americans are earmarking their funds for other financial priorities.
More than half of those surveyed (56%) say they’re currently prioritizing paying off debts rather than saving, and 43% prefer to have their savings in investments and retirement strategies rather than real estate, because they are easier to liquidate.
While homeownership does build equity where renting does not, the concept of having all of one’s income dedicated to a house is becoming an old-school thought process. Some renters are looking even further down the line with their funds, as 36% of renters prefer to invest in retirement as opposed to saving for a home.
For the majority of respondents, any discretionary money is dedicated to activities such as dining, travel and entertainment, such as concerts and sporting events. A sizable 74% indicate that they designate any extra funds toward these types of experiences. Nearly half of respondents—46%—say they have the financial means to pursue their hobbies.
While renting might often be more cost-effective than homeownership, many Americans also enjoy the social aspects of being part of an apartment community.
Renters also have the ability to use a property’s common areas to host their own visitors, which for many, is preferable to having a backyard.
Forty percent of renters have utilized a property’s communal spaces for social gatherings, and approximately one-third (34%) indicate that their friends or family visit at least once per month.
More than half of respondents (51%) say they enjoy the community aspect of renting, and many have fostered meaningful connections with their neighbors. To that end, 67% of renters have helped neighbors at their properties while 61% have had neighbors assist them.
In summation, homeownership no longer qualifies as a primary measure of success or fulfillment for many of today’s Americans—particularly younger generations. While a certain percentage of people will always be renters by default due to their financial situation, more and more Americans are renters by choice. That’s because flexibility, experiences and other financial priorities are increasingly more compelling than homeownership to many.
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