Have you seen these signs lately? If you live in Dallas / Fort Worth, Texas area like I do, they’re on every busy intersection. They’re usually small signs, the size of open house signs, mounted on a little metal stick and stuck in the ground. Signs like these are called “Bandit Signs.” And in this case, bandits not only describe the signs, but also describe the people using them. The signs I’m referring to usually say something like “Seeking Real Estate Investor Apprentice – $20,000 a Month” with a phone number listed at the bottom. Is this an opportunity to make money? No. NO! NO!!!!!! Don’t fall for it. I have some experience with the people behind these signs and I’d like to share it with you so you don’t fall prey to these people trying to fleece the apprentice investor.
First of all, if you held the secrets of earning $240,000 per year, would you really share it with your competition? Second of all, would you really advertise it on a $2.00 bandit sign planted next to a stop sign? No!
I knew the message on the sign sounded too good to be true, but I was curious to know where it would take me . For the record, I was curious, but my money was content not knowing. I called the phone number and was given a canned sales pitch, a very bad one at that, about this organization that catered to investors in an all-too familiar multi-level marketing scheme designed to separate novice investors from their money.
I was still curious so I went to their seminar. The seminar was held in a vacant office space somewhere in Richardson, Texas. Usually things like this are held in hotel ballrooms but hey, first class all the way, right? I found myself surrounded by people wanting to get into real estate investing but they didn’t know how to do it. If only someone could show them the secrets of real estate investing. Who indeed, thought the hosts of this seminar. Into the room steps a high-pressured salesmen that was so pushy, that you’d feel more comfortable buying a used car than you would be sitting in that room. They herded us into a room for a sales presentation that revealed their multi-level marketing company and how we could pay through the nose to join it. The rest of the presentation was spent drilling into our heads how stupid we would be to pass up this “opportunity.” While it resembled a pyramid scheme, they were quick to insist that it was not a pyramid scheme but a multi-level marketing scheme. If you’re confused about the difference let me explain. In pyramid schemes, participants attempt to make money solely by recruiting new participants into the program. In multi-level marketing, most of money is made by recruiting, but some of the money earned is made by selling the products this organization markets. While, a pyramid scheme is illegal, if that same pyramid scheme has you sell one stick of gum while you’re recruiting members then it legally becomes a multi-level marketing company because you now have income coming from multiple levels, recruiting and gum revenues from that one stick of gum you sold last year. See the difference? Me neither.
The group behind this lecture tried to pass themselves off as an “investor university” that taught classes, offered degrees in investing or something like that, offered incredible wholesale deals for houses, and best of all, gave us the opportunity to profit by recruiting others to buy into this chance of a lifetime opportunity. If you haven’t thrown up yet, go grab a bucket and read on. Graduates, dumb enough to successfully pay for all these classes would receive “coveted” but laughable degrees, that were degrees in name only, and they would finally become eligible to join the “alumni group” of investors that shared deals with each other nationwide. This privileged group was given access to the best deals on planet Earth, or so they would have you believe. Actually it’s just a bunch of over-priced houses other members were wholesaling with a big markup to other investors, just like any other wholesaler, except that you had to pay lots of money just to see their inventory list of overpriced fixer-upper houses.
I looked around me and I couldn’t believe what I was seeing. The crowd was taking this crap seriously. Eating it up. They were ready to go out and make their millions. I wanted to just stand up and shout, “How stupid are you?” I didn’t have to because I pretty much knew the answer.
So, the next time you’re driving home and see one of those signs, do everyone a favor and run over it.