Almost every month, real estate seminars in and around Vancouver promise ordinary people the insider tips and tricks needed to find a backdoor into the region’s frenzied housing market.
Inevitably, many of these free seminars end with the promise that attendees will learn real secrets and even get connected with a group of mysterious private investors if they pay thousands, on the spot, for another workshop or a mentorship.
Ron Usher, a lawyer and member of a panel examining the state of B.C.’s real estate regulation, says these seminars encourage the kind of speculative activity that plagues Metro Vancouver’s market, and prey on people who view owning property as the path to success.
And no one is doing anything about it, he said.
“A traditional way to get ahead in real estate was to buy, fix up and sell, and a lot of people, by their sweat equity, worked their way up,” said Mr. Usher, who also acts as counsel to the Society of Notaries Public of British Columbia. “Of course, in a market where things like single-family homes are so expensive and it’s so competitive, that’s hard.
“So when a company comes along and says, ‘It’s not hard, we’ve got special tips, we have salvation,’ it is more like a church service than anything – and who wouldn’t want to believe?”
Seminars promising to teach the ins and outs of house flipping, or any number of investing tricks, are not new, in Vancouver or elsewhere. In the past five years, Mr. Usher has attended about a dozen real estate seminars put on by various companies making such promises.
When he took his real estate law class at Simon Fraser University on a field trip to a seminar last week, many of his 30 students smirked as a portly pitchman’s spiel on flipping unfolded just as he had predicted. (He also bet correctly that participants would receive a cheap knockoff – not the promised iPod shuffle – if they stayed until the end.)
At this particular seminar, run by Utah-based SuccessPath, the presenter briefly compared strategies such as assigning contracts, a practice for which the B.C. government recently created new rules; wholesaling properties; and renovating and flipping. Attendees were told the company would help them start buying up property quickly, even if they had bad credit or little to no money of their own, by giving them access to a secret pool of 85 wealthy private lenders. But first they had to buy a $2,600 ticket to the three-day workshop starting the next weekend in Richmond.
He says he has filed numerous complaints about other companies presenting misleading – and pricey – real estate seminars and never heard back from the federal Competition Bureau and Advertising Standards Canada, the marketing industry’s self-regulating body.
“Are they regulated by anybody?” Mr. Usher said.
The Financial Institutions Commission of B.C., which oversees the mortgage broker industry and unlicensed real estate activity, says its investigators routinely attend such seminars, and confirmed that they were there last week at SuccessPath’s event. A spokesman would only say the agency welcomes complaints about unregistered mortgage brokering or unlicensed real estate activities.
Meanwhile, the Better Business Bureau warned people contemplating this weekend’s course to exercise caution after it logged more than 150 recent complaints from U.S. and Canadian participants about SuccessPath and several affiliated companies. Most of these complainants said misleading and manipulative marketing practices led them to pay $2,000 to more than $70,000 for classes and mentorships that ultimately had little or no value.
Last December, the company postponed a swing through Washington and Oregon after locals fumed on social media at the prospect of flipping techniques being taught in housing markets that, like Vancouver, face growing affordability crises.
James Carlson, CEO of Utah-based Premium Financial Training, says such complaints come from just 0.004 per cent of the more than 430,000 people who have attended events staged by his company in the past three years under SuccessPath and other brands. He added that internal evaluations show close to 99 per cent of all three-day workshop participants “leave really satisfied.”
“Everybody is offered education, whether they buy that education or not is up to them,” Mr. Carlson said in an interview. “We feel as though we do a great job of fulfilling their expectations.”
Mr. Carlson said the speakers at the free preview seminars, such as the one Mr. Usher attended with his students, do not need any professional credentials or real estate experience, but they go through company training to “to be able to effectively present the content.”
About 20 tickets have been sold to the upcoming three-day workshop, at which at least one instructor and three experts will work with the participants, Mr. Carlson said. He denied allegations in complaints published on the Better Business Bureau website that experts at these events size up participants to sell them more courses, not to gauge what types of real-estate deals they can start making. He added that attendees are all invited to seek more education at one of his company’s intensive, $10,000 investor summits, which are held about five times a year in Las Vegas.
Tom Rogers, a 77-year-old from B.C.’s Sunshine Coast, said he and his son paid for this weekend’s three-day workshop to get connected to SuccessPath’s network of U.S. and Canadian private lenders. The pair wants the promised loans – at interest rates below 4 per cent – to buy properties in Canada to fix and flip.
“If there’s some hitches there, then I’ll be going to get my money back,” Mr. Rogers said. “I’m mainly after their contacts, their investor contacts.”
He said consumer complaints are “obviously bad news,” and added that “unfortunately, there are gullible people in the world that don’t take the time to do the research themselves.”
Last week’s energetic free seminar started with a brief video from reality TV home improvement gurus Tarek and Christina El Moussa, who apologized for having to stay behind in California filming their HGTV show Flip or Flop. The El Moussas did not respond to requests for comment.
In the short clip, the couple described how flipping property changed their lives dramatically.
“Four years ago, we never imagined we’d be where we are today. We went from driving cars we hated, living in places we hated, to driving the most amazing cars money can buy, living in the house of our dreams, with a beautiful yard. Literally, our life is better than we ever anticipated,” Mr. El Moussa says.