It started as a link to another article...

This article started as a simple link to another article. I just wanted to reflect on someone else's wisdom. But one tiny fallacious comment got under my skin, like a grain of sand in an oyster. And like our friend molluscs, that grain ate and ate at me until I was driven to dig deep into the background of the comment, building a coat of nacre to grant me much needed comfort.

It all began when I was reading an interesting article on MSN on the 10 biggest mistakes that novice real estate investors make. Most of the advice is good (and you can probably guess that it was 99% common sense then) with mistakes like "not doing enough research" or "thinking you'll get rich quickly".

As a quick aside, what is this pre-occupation with leading a "team"? Just because you pay a CPA to do your taxes doesn't make him a member of your team, you're paying for a service! It's like taking a taxi to a meeting and considering the taxi driver part of your team... I guess people obsess about it since it feeds the ego ("I have a team of more than 20 professionals!")


As I was reading the resevoir of useful, though commonly known, data one comment stuck in my mind and became nigh impossible to dislodge from my brain.

"If you're working on one deal at a time, Crowe says, you're doing transactions, not running a business. You need a steady pipeline of prospective deals; sufficient volume will weed out the marginal deals and let the good ones rise to the top."

This sounds awfully like guru-speak. John Reed argues that one of the signs of a guru is their need to offer new definitions to old terms (rule #32). Stop and think carefully about what he said. "...doing transactions, not running a business". Isn't every business built upon doing transactions? For example, when a mechanic fixes your car, isn't that a transaction? You give him money, and he gives you expertise? Is the mechanic not running a business?

Maybe he means that, by his new-fangled definitions, the mechanic isn't running a business, but if the shop is owned by someone else then that someone is. So by that definition we've determined that running a business means paying someone else to do your transactions for you... Confused yet? Because right now it sounds like Mr. Crowe thinks you ought to hire a bunch of real estate investors to handle the investing for you, otherwise you aren't running a business... (Mr. Reed's rule #7 for spotting a guru is "Claims to do lots of deals")

Who is Mr. Crowe anyway? Looking back earlier in the article we find that, according to the author, "Doug Crowe, a Chicago real-estate investor and speaker...[is] the managing director of Springboard Academy, the nation's only real-estate academy for investors." So he IS a guru, which explains a lot. Unfortunately the author's claim of his school being the only real-estate academy rings a bit false. After all, didn't our friends at Nouveau Riche claim similar things? Looking at Springboard's website, we see that their claim is to be the only "semester-based" academy.

Read Springboard's website. They claim to be a legitimate educational facility, but notice that their website reads far more like Carleton Sheets site than that of a honorable education institution. I invite you to follow their advice and "review [their] course curriculum". Note the following things:

1) They don't give a price.

Their website specifically says "Tuition is discussed during the interview process." How many business models don't offer you a price until you sit through a sales pitch? Here's a hint, only the ones that use high pressure sales tactics (like timeshares). Think carefully about this, let's say that I'm comfortable spending $1,000 on a course, but their cost is $15,000. If I "interview" with them, I'm just wasting their time and money, a waste that could have been avoided if I had simply known ahead of time what they charge. The only reason to withhold a price is because they think that they price will turn people away, but if they can talk to you they can pressure you to pay it anyways.

But maybe their program is worth it? After all, some private schools charge that much for a semester's tuition. What are their classes like?

2) They don't include a course curriculum.

You know, like they promised? Their curriculum has absolutely no worthwhile data in it, just a bunch of feel-good crap.

If you were beginning a honest school for real-estate and had to write a section called "How it works", what would it look like? Would you list out the various course offerings you had? Would you describe how first you educate a student on financial topics, including cash flow and projections, then lead that into a segment on legal documents (including leases), maybe take that into some landlord/tenant case law? Maybe you would describe how you have a basic curriculum that teaches you everything from basic accounting to being a good landlord, but then you offered specializations in bankruptcy law, construction or repairs or maybe even a specialization in specific state laws?

One thing you would not do is write some tripe about how curiosity leads to frustration, which leads to action. I want to be an investor, not a jedi. Much bullcrap in him, I sense.

"Springboard is the nation's only organization that combines all THREE of the necessary ingredients for your success. It doesn't matter where you are in the process, because it is a PROCESS and not a destination."

Yes, because if you go to a traditional college where you can earn a degree, they most certainly do not serve the ingredients necessary:

Education - They do not teach you new things
Confidence - They don't make you more confident
Action - They don't assist you in any practical application of what you've learned

I wish I had learned these three pillars of education before I payed thousands of dollars for a real university to provide me with the tools I needed to succeed...

Are you convinced yet? That this is utter bullcrap? If not, consider this last bit of advice that he gave to Bankrate:

"The number is the number, and you don't go above that, he says. The best way to solve the problem is to have lots of activity and make offers on multiple properties. Then you don't care which one you get — as long as the numbers work out in your favor."

We've been here before. Anyone who tells you to throw out offers like Eli Manning throws interceptions is probably just trying to tell you want you want to hear. And that's just because he's eyeing your wallet.