When people think of Donald Trump, their first thoughts are usually about his major commercial real estate empire and reality show “The Apprentice.” A smaller group think of a huge expense to join Trump University that led to virtually zero return on investment.
According to the lawsuit filed by New York Attorney General Eric Schneiderman in 2013, more than 5,000 people signed up for Trump’s real estate seminar for a $1,495 fee. Throughout the three day course, participants were treated to very general advice formatted as an up-sell for a $35,000 coaching service. Seminar participants were made to think they would get to meet “The Donald,” but were just given the opportunity to take a picture with a life-size cutout.
When pressed to sign up for the coaching service for individual guidance and attention on the path to making a real estate deal, seminar staff encouraged participants to ask their banks for higher credit card limits to pay for the coaching. In the coaching, participants were pressured into more debt to finance their real estate deals.
According to advertising, Trump was personally very involved in creating the course and hand-picked instructors who could teach a fool proof system to profit in real estate over the three days. The suit claims that the entire seminar was an expensive and elaborate bait-and-switch designed to push people into the $35,000 program.
Trump fired back against the Democrat Attorney General and claimed that the suit is baseless and politically motivated.
Whatever your opinion of Trump and this specific lawsuit, it is important to understand that real estate investing is never a get rich quick proposition, and successful real estate investors have years of experience, much more than you can learn in a three day seminar. Advertising the opposite got Trump University sued for fraud.
Read the entire story at the New York Times.