A semi-annoying ad followed me through Facebook for the last week or two. It had a picture of Christina from Flip or Flop on HGTV. After signing up for my real estate license classes earlier this week, I signed up to attend a free seminar. I knew that there would be a “catch” or that they would try to sell me something, but I thought I might learn something about flipping houses. So I went. And they did try to get me to sign up for their 3-day class for close to $2,000. They have a company called Success Path. The main benefits, in my opinion, for paying to do the 3-day class were 1) gaining knowledge about a wide range of real estate opportunities and 2) having access to their “preferred lenders” that allegedly will give you up to $500,000 per flip without a credit check.
As I continue to pay for my law degree (a.k.a my student loans), I see the value in spending a few bucks, instead of tens of thousands, on education in a new field. The travel agent class was super cheap; I got my TEFL certification with a Groupon; and I should be able to get my real estate license for less than $1,000. All of these are a minuscule investment compared to a total of eight years of college. And, I’m in the position that, even if I don’t ever make any money from these endeavors, the investment hasn’t hurt our bottom line.
There were quite a few people that signed up for the 3-day class (due to the deep-discount to sign up that day, as opposed to waiting), but there were also a lot of people that didn’t. I do feel that it was worth my time, even though it was basically an extended sales pitch, in that I learned some new things, including that: 1) REO’s (bank-owned properties) are generally great for flips; 2) they believe Central Ohio is in position for a big run-up in real estate prices in the next 3-5 years; 3) adding a rehab-estimate clause as a contingency in an offer is essential for a flip, and; 4) their system teaches never to flip a house unless you’ll clear at least 20% or $20,000, whichever is greater.
One of the factors they stressed, that I firmly believe in, is having Multiple Streams of Income (MSI’s). Part of the 3-day class is to teach basic principles of investing in rental properties. One of the disappointing parts of the seminar for me is that they never once mentioned taxes. While giving examples of the profit on flips, they never cautioned us about how much of it won’t actually make it into our pockets. I know I overly obsess about the issue of taxes, but it is a reality, and it can have a significant impact on the bottom line.
Can I claim that this was a life-altering experience? Absolutely not. But, maybe it was for someone else that attended the seminar. Maybe they are starting their own journey to financial independence.