Beware ‘free’ real estate seminars

Beware ‘free’ real estate seminars

January 01, 2010

Mark Weisleder

Special to the Star

How many times have you seen late-night infomercials or advertisements inviting you to a seminar on how you can become a millionaire by buying real estate with no money down, even if you have a poor credit history? As with most get-rich-quick schemes, there is an old saying, “If it seems too good to be true, it is.”

Becoming a real estate investor is not easy. It involves careful study as well as being surrounded by a team of professionals to assist with properly evaluating, negotiating, financing and managing your investment. Even with all of this, some very experienced investors have also suffered losses or even bankruptcies when the market unexpectedly turns, as we saw in the last four months of 2008.

Typically, what these no-money down programs attempt, in a two-hour “free” presentation, is to convince you to attend a three-day workshop in which you’ll learn the “secrets” to become an instant real estate entrepreneur. You are then invited to pay several thousand dollars to attend this seminar, with a promise that you’ll make tens of thousands of dollars within 30 to 60 days of completing the program.

Here are some of the methods used to entice you to attend the three-day seminars:

The instructor will usually spend time telling you about all the vacations he is taking now that he is financially secure, and that he has personally purchased several hundred properties in your area using this system.

The main principle is that the seminar will help you find properties in distress that no one knows about where the owners owe more on their mortgage than they can afford.

You will learn how to place advertising in key real estate magazines to help you find these owners who are in distress.

You will then receive at least 50 to 100 calls from sellers in trouble, either through job loss, marriage breakdown or a death in the family.

These homeowners will be very happy to give you their property if you take over their mortgage payments, so they can avoid having their credit score ruined for the next 10 years.

Even if you have bad credit, you will still be able to take over an owner’s mortgage without getting approval from the owner’s bank.

They will provide you with lenders who will lend you money at high interest rates for a short period of time – usually 30 to 60 days, which is okay because in two months you can re-sell your property and make your first profit.

They have a database of properties in your area that are in a category called “pre-foreclosure,” where the bank is about to take over.

Notice the phrase “pre-foreclosure.” That’s a term rarely used in Canada, but it’s common in the U.S. Many other principles in these seminars are taken from similar U.S. seminars that have little or no application in Canada.

In Canada, most banks use the power of sale remedy if a mortgage goes into default; they typically do not use the foreclosure remedy because it takes too long. And we are not experiencing the real-estate meltdowns people are facing in the U.S., because most lenders in Canada have been more responsible than lenders in the U.S.

More than 15 years ago some trust-company mortgages allowed buyers to take over a mortgage without bank approval, but it’s very unlikely you’ll find one of those mortgages today.

In Canada, most lenders will not give you money, even at high interest rates, unless you can demonstrate you have some equity in the property. So why would owners in this situation not just sell their properties themselves to pay off their mortgages?

I invite readers to share with me any of their own experiences attending these seminars.

Remember, if it seems too good to be true, it is.

About Tariq Sultan
Dear Readers, I am a dedicated Toronto, Ontario based real estate professional who has been successfully meeting and exceeding the needs of his clients for past several years. I am actively involved in the insurance, financing, and mortgage industry. Real estate is not only my career – it is my passion. I strive to continuously provide my clients with exceptional service to ensure they are fully satisfied when it comes to their real estate needs. For any real estate related inquires contact me today, I will be happy to assist you. Best wishes, Tariq Sultan

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: