Invest With Experience - the Antidote to Real Estate Investment Clubs

A hot-shot guru or investment club offers you a free seminar. They claim it will make you a millionaire, and if everything goes very, very well, a multi-millionaire. 

In reality, the free seminar is a come-on to “tip” you into properties that they have identified. Their due diligence, however, is restricted to properties that pay them generous commissions. 

Many real estate investment clubs and networks follow this “edu-sales” model. Some clubs disclose commission payments, while others do not, raising the suggestion of conflict and professional liability for everyone associated with any investments that go bad.

A “WALLET-ECTOMY” 
Jim Ross knew there had to be a better way. 

“For me, the turning point came when I realized I had spent nearly $47,000 with so-called investment ‘gurus.’ I did not have one penny, let alone one property, to show for the time and money spent. The dream-merchants failed me,” said Ross.

“I was in this venture by myself. Alone, inexperienced and a lot poorer for this expensive self-professed help. They claimed to be my venture partners and real estate investment mentors. They were neither.” 

The silver lining in this bad news is found in the first ever national real estate investment study “The Invaluable Investor” run by Personal Real Estate Investor Magazine and partners LORE Magazine and REALTrends and well-known polling contractor Harris Interactive, “The Invaluable Investor.” Thise study found that only 15 percent of investors said that self-appointed gurus or investment clubs had influenced their decisions.  Still, many investors pour hundreds of thousands of dollars into edu-sales and sham tele-mentoring services versus actual property investment. These edu-sellers follow a “pump, pimp and dump” model that extracts revenue, as much and as quickly as possible, from would-be investors before they realize their pockets have been picked.

HOOK THE GULLIBLE
“My revelation: I was property process-rich and property profit-poor.” 

Ross had met hundreds of others in the same situation; networking at investment clubs and education events, desperately trying to build networks of other networkers. Ross further realized that these investment clubs were businesses unto themselves, designed to profit the organizers, not the members. 

Studies by Ross and others find that average investment club members attend about 1.8 meetings. We have found that over 50 percent of all first time real estate investment club guests never return, in spite of their desire to participate in real estate investment.

A poll conducted by a former Florida real estate association investment magazine found that 87 percent of their readers did less than one transaction in 2007. Seventy-five percent did no deal at all, confirming Ross’s experience of investment clubs.

“The business model for many of these gurus and sales clubs is similar to that of a school yard drug dealer giving away just enough dope (information) to hook the gullible,” says Ross.

AVOID REHAB? YES, YES, YES
“Rather than complain,” says Ross, “I decided to do something about it as there were thousands, if not tens of thousands, of other investors in this same position.” 

He set up a small system he had used effectively. This included getting a real estate broker’s license so he could earn commissions and claim he did so without ethical problems. Additionally, he only focused on properties that made long term and sustainable economic sense, not selling properties for those who paid the highest commission. 

“We returned to the investment clubs and events and found others interested in a real investment plans. Universally we found that clients were looking for real deals but were alternatively scared, too busy or too tired just living life. The solution was turnkey investment in true investment grade properties,” Ross said.

“We started by specializing in condos and pre-construction, but only in markets that made long term sense from an economically sound perspective. As a broker specializing in real estate investment, I work overtime to educate and lead my clients into a market.” 

Ross is always the first person in the deal and only recommends deals he invests in it too.

HERDING PIGS TO HERDING PIG IRON
Ross spent much of his career in human resources at Bethlehem Steel. One project was to launch a new specialty steel mill. This meant staffing and training prospective workers from the farms of northern Indiana to work in blast furnaces. 

How do you teach a pig farmer to work in a blast furnace? “Making a career change is a long and tedious process that takes at least 18 to 24 months. How do you learn to become a real estate investor in a weekend unless there is ongoing hands-on mentoring, advice, and direction?” said Ross.

Ross also found an assumption about real estate investors that is fundamentally flawed. “We all seem to believe that if you walk through the first deal with an investor they will go independent and manage their own investment business thereafter. This is just not true. The average intended investor also has a full life that requires attention.”

“In the steel mill the reward for the apprentice was payment. So getting the first check in learn/earn model was vital. We employ the same idea in our real estate investment practice. The investment opportunity sought by beginning real estate investors includes a true venture partner and team to assist with the complicated strategies, techniques and financial knowledge necessary to minimize risk and maximize long term success.”

CLIENTS PROFIT FIRST
“We formed National Real Estate Holdings. We are dedicated to supporting our clients as they build sustainable real estate portfolios and long term wealth. Our employees, clients and investor partners all participate in building valuable real estate portfolios, with minimal capital investment and exposure.”     

Through hard work, integrity and perseverance, the company is progressively establishing a reputation as an industry leader and trusted advisor in an industry with exceptional potential.  

“Don’t ask me about it,” says Ross. “Come to one of our dinners and listen to our clients who have done business with us repeatedly because we stay with them long after the purchase of their first property. Repeat customers are our most profitable customers, both for them and for us. Success in this business is all about enlightened self-interest.”
   
ROSS RADIO   
“Real estate investment is not for everyone,” says Ross, host of the highly successful, educational radio show “Real Estate Hot Talk” on KSFO 560 AM in San Francisco. 

“Gaining trust and attracting listeners to Real Estate Hot Talk events quickly determines who should be real estate investors. Real estate investment is not a transaction but a relationship driven by partnership. Ross finds that 40 percent of his clients, who attend a free dinner, follow his advice, and meet existing clients, invest with National Real Estate Holdings.

“A frequent dinner question is: How do we know we can trust you?” says Ross. “The answer is talk to others in the room who have invested. Most of our clients can claim they have made money with me because we are conservative and diligent with our money and even more so with theirs.”

“Why?” asks Ross. “Because I should and that is the way good business works.” 

“Unlike some real estate investment buying clubs, we turn down 80 percent of the supposed investment deals brought to us by developers as they fail our three golden rules,” says Ross:.

Ross’s three golden rules:

1. There must be walk-in equity to allow a quick exit if necessary and remain whole. 
2. There must be substantial value to the investment. It must meet our cash-on-cash targets and provide positive cash flow. 
3. Every real estate investment must demonstrate a planned exit strategy for compounding portfolio growth.  
 
Personal Real Estate Investor Magazine finds that successful real estate investment is seldom an individual decision. It involves the family, as there may be a career change involved. This is why a turnkey solution, like the one offered by Jim Ross’s National Real Estate Holdings, Inc., makes such good sense to us and why we caution against the edu-sales clubs. We are a fully licensed brokerage and abide by expected professional standards.

“In our six years in business we have made mistakes,” says Ross, “but we never truly knew the meaning of dreamers and schemers till we reached the world of real estate investment and investment clubs! We would like to be seen as a salve for these investor scars!”
 
Contact:
National Real Estate Holdings, Inc.
www.NREHoldings.com
916-941-9977
866-760-7677

Real Estate Hot Talk Show on KSFO 560 AM (San Francisco)
On Air - Sundays 10 am to 11 am PDT
On Line – www.RealEstateHotTalk.com