Last week while perusing the Sunday “Business” section of the newspaper I came upon and ad. It was announcing an upcoming meeting for a real estate investment club. I have seen this for quite some time and made the decision I would check it out and see what they had to offer. If nothing else, it would be a good opportunity to network and see what other people are into these days. I had hoped to find a club in the area that focused on Pasadena real estate, but since I could not find anything, this would have to do.

The meeting was held on a night when it had been raining. I got there a few minutes late and they were still setting up, so I decided to wait in the bar with my friend, Jack Daniels. The email I had received earlier in the day confirming my participation indicated there would be two speakers for the night. One presentation would feature “Short Sales” and the second segment would feature ‘Buying with Government Grants and Down Payment Assistance Programs”.

Since real estate is my career, I am always interested in what others have to say and how they perceive the current real estate market. Also I am interested in people’s reactions to the information which is presented.

The cost for the evening was only to buy dinner at the host restaurant. When they allowed us into the room I was surprised to find five other interested souls at the table. The before diner conversation uncovered a couple of the participants had signed up for the Dean Graziosi real estate millionaire courses. The others were relatively new to real estate investing.

The first speaker got up to speak on short sales. I thought (naively) that the speakers were proficient in their fields of expertise, not there to sell us on the benefits of their program or company. I am not sure what it is, maybe it’s my 25 year background in sales, but I am skeptical at first. I have to be won over. This time, I think my instincts were correct. When the speaker opens with how much money they are making and shares a few insights about their ex-spouse, my antennae are on high alert. Then to confirm my perceptions, any speaker who is hoping to sell their services should check that pompous attitude at the door.

A synopsis of her presentation included buying property in foreclosure. Her example included a property which had appraised at $500,000 with a first loan of $300K and a second loan of $200K. She indicated through some successful negotiation and getting to the right person, she is able to offer the first lien holder $250k and then strike a deal with the second lien holder for $20K, since a typical foreclosure would wipe out the second, leaving them with nothing.

I had a couple of questions:

1. Since you have worked with so many banks buying foreclosed properties which banks are more negotiable than others?
2. Why would the first lien holder be willing to accept less in a negotiation since they are very likely to recoup 100% of their investment through a foreclosure or short sale? The property was worth $500,000 right?

Neither of the questions evoked an acceptable response. Had this woman been in politics? She knew how to effectively dodge that fastball that was meant to brush her back from home plate. She went on to explain now that she has just purchased a property worth $500k for only $270k, she obtains a hard money loan for $325K. At this point I felt I was participating in a late night infomercial…”Buy property with no money down….get cash back at closing”. Then after 6 to 12 months you sell the property back to the original owner for $450,000 or $500,000. Easy money.

After the presentation was over you could speak to one of the program moderators. I heard the cost of her program, mentoring was $5-$6000 and you could learn the programs which were making her millions. When I got home I went back through the sales material only to find we had never heard her last name. This seemed strange. What if I just went by the name “Doug”, would that mean I had something to hide? It’s one thing if your an entertainer, Cher, Madonna, Prince, they can get away with it. If I am giving a real estate seminar, I want you to know who I am. I will be soliciting referrals and recommendations.

The next day one of the participants I had met called me and informed me he had performed a Google search on her. She had a few complaints and someone had posted some websites indicating small claims actions.

Oh, and as for the second presenter of the evening, they never showed up. That would have been a hard act to follow.