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So, we hosted a private real estate buying opportunity via webinar. It was an awesome deal for turn-key residential investment properties—all unlisted, all at special prices and terms not available to the public, hot market, our usual thing—exclusively for members of real estate investment clubs around the U.S. I will outline the experiment, followed by the results and then provide some analysis
To control variables we hosted a buying opportunity that offered investment properties with prices and terms identical to previous buying opportunities that our real estate investor clients had responded to favorably, purchased and closed.
We also used the same medium (Webinar) and the same presentation.
So, all of those variables were held constant. The goal was to have the only new variable be the source of the buyer prospects: real estate investment clubs.
Those are compelling results. They are further supported by the fact that I have personally attended many real estate investment club meetings over the years and I have never once met a single attendee that has ever closed on a property through Maverick. It is pretty astounding given that the name of the venue is ‘Real Estate Investment Club’, but that just further begs the all important question of ‘Why’.
The reason why most people who attend real estate investment club meetings never invest in real estate is not actually that complicated or mystifying. It is pretty simple and clear if you understand the basic economics and underlying incentive structures of real estate investment clubs.
Most real estate gurus who are featured speakers at real estate investment clubs market hopes and dreams about getting rich through real estate. This is typically targeted to a non-affluent audience, and typically takes the form of Do-It-Yourself (DIY) education (home study courses, CDs, seminars, etc). Selling these education products to real estate investment club attendees is how the guru makes money. That means that the prospect of someone actually investing in real estate is perceived as ‘competition’ for the guru because if someone were actually to use their money to invest in real estate, there would be less money available to pay for the ‘extra-special-super-seminar’ into which the guru is hoping to up-sell the client after they buy the gateway product.
Real estate investment clubs are in the business of helping real estate gurus (and related self-styled ‘industry experts’ of various stripes) sell their products to novice would-be-investors (the real estate investment club takes a sizeable cut), and in the business of selling memberships and advertising/vendor tables.
Most of the real estate investment clubs do not have a real estate broker’s license and cannot legally receive referral fees on real property transactions, but they CAN receive commissions on educational products sold. So there is a financial self-interest in encouraging people to buy the educational products instead of investing in real estate.
We are not a tax professionals, this is not tax or legal advice, and tax laws are constantly being changed and revised and may change the day after you read this. So, this is for informational purposes only, and it is your duty to consult with your own tax professional about your individual situation and the most updated applicable laws before attempting to implement any of the content in this post.
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