How to Spot a Real Estate Scam Infomercial Essay

They are called systems, courses, and seminars. They promise to teach you how to buy a house for pennies on the dollar using foreclosures, tax liens or sheriff’s sales and they all have that one real estate guru who knows how to make YOU money. Can the bad ones be weeded out before you plop down your hard earned money? I think there are a few ways to keep from being scammed.


The company’s or the individual’s claim or pitch can grab your attention and alert you to a potential fraud or scam. Two old adages come to mind, “if it sounds too good to be true, it probably is too good to be true” and the next, “if it was profitable and easy then everyone would be doing it.” Therefore if you read or listen to a deal that sounds great, hopefully your inner voice that reacts to excitement with calm cool reasoning will kick in and slow you down before you commit without learning the details. Are the claims incredible, fantastic and a sure money-maker, making you rich beyond your wildest dreams? Then chances are it is a scam.

There is an infomercial with a well-respected real estate guru, claiming you can purchase a house for less than $300.00 using his system. Turns out his incredible claims really are too incredible to believe, especially when you toss in a little false advertising and gross exaggerations. We’ll be able to use his system as a model on how to spot a potential scam.


Is a sure way to make you feel at ease, right before you get scammed. This gets plenty of people because it claims you can always return the purchase with no obligation and a full cash refund. All you have to do is provide your credit card info and if you decide to return the materials, your credit card will not be charged, or your credit card will be credited.

To find out if this is really going to be the case, you can simply google the company name and type “scam” right after it. It is amazing how many people who have been scammed by this type of offer, will reveal it to all who browse cyper-space, just to prevent it from happening to anyone else.

I’ve personally experienced this successful approach. I wanted to sell a company’s cell phone charger, every thing looked totally legit, the company was even featured on a top daytime news show. However in a discreet forum board, there were posts about the company and its owner. I decided to hold off and was richly rewarded for my prudence when later the owner went out of business taking all the money of the sales force with him. Was I glad I had only purchased one single charger to test out for myself. I was asked to purchase dozens at a time, by the company.

One popular real estate system gets innocent consumers to purchase their kit featured on an infomercial. The $39.95 purchase is legitimate, although unless you are a real estate novice the information in the kit is said to be the same type of info you can get for free from the library. Surely not worth the $39.95 asking price. After receiving your over-priced kit you are supposed to be able to opt out of any future kits, or you are only suppose to receive the one kit, with a one-time payment to your credit card. Instead you are repeatedly charged month after month for $39.95. When you try to stop the shipments, or if you decide to opt out it takes forever to get a real person to talk to and in the meantime the charges continue. Some have never been able to get in touch with a real person, they have to resort to filling out an online form, which of course yields no results.

In many instances, a quick check of the company would have revealed this nasty little proplem and probably prevented most people from going any further.


The Better Business Bureau keeps excellent records on businesses whether they are based on infomercials or not. They also grade the companies based on consumer complaints and resolvability of issues. The infomercial in question is graded F because of their poor customer service, the less than stellar kit of information and their unwillingness to resolve complaints. How many people would have proceeded with them had they either goggled them or looked them up with the BBB before hand?

The Tax Lien Scam

Another popular ploy used to hook potential investors is buying tax lien properties. You need the help of the course or system or seminar to do this, so the sellers of such items would have you believe. In truth however, you can call your local tax assessor or pay them a visit and get the same information for free.

Doing an Internet search can turn up scores of Real Estate Forum Boards who have members offering advice and how to information for free.

Lets say you didn’t do those things, what can you expect? You can expect to purchase a house that is a moldy, smelly dump. You know those pictures featured in the infomercial? Well, they do not accurately represent what the houses look like at the time they are purchased. They also don’t inform you how many years you will spend fixing up the house or how much money you will have to spend paying for all the work that needs to be done in houses that are virtually uninhabitable.

The infomercial also doesn’t tell you that tax lien properties can still be repurchased by the original owners once they pay the back taxes.

The Mentoring or Counseling Scam

These methods are among the “up-sells” or the products or services that really rake in the dough for the scammers.

If you agree to accept the special invitation for a select list of students then you will be personally mentored by John Beck himself, or some other high level assistant. Usually phone calls are made, more info packets are sent out and specific information is made available only to you. Specifically you will receive 7/8 DVDs plus 30 minutes of coaching.

They will try to switch you from interest in tax liens to buying a lot. They don’t necessary tell you it is possible you will owe back taxes on any lot you purchase, which contradicts the “free and clear” claim they make about their lots. You can also be expected to be coached to post your lot for sale on Ebay. You will do so only to learn that the properties similar to your property is being sold for much less than your asking price. You are already losing money at that point.

This comes with a high price tag, Evidently dependent on your credit worthiness. It can range from $2,000 to $15,000.

The complaints about this mentoring, besides the high price tag is that some of the teachers are uneducated, unprofessional and inexperienced.

For reviews about many of the real estate courses available you can check out the site, there are plenty of Amazon type reviews listed there.

Purchasing Property From the Scammer

It is no surprise that at times you are talked into purchasing property from the scammer himself. That is one of the ways Mr. Beck makes his money. You buy a lot that he is actually selling from his inventory. He gets it dirt cheap, sells it to you for a profit and you try to sell it but your profit is negligible or much less then you expect.

Again, doing research before you commit can save you from being scammed.


People have invested their 40l(k’s) in these schemes. They’ve used their savings after being laid off from work, hoping to find a good way to keep saving for their retirement or children’s education and all they’ve received in return is minimal profits to no profits at all.

Some have lost everything and on top of that face paying off credit card debt for which ever system they trusted their money with. What was a good idea in principal turned out to be a disaster because the right course or system or seminar wasn’t chosen. Make sure your good idea has a good name and reputation to go along with it.