Whether real estate courses, workshops, clubs etc are worth the trouble appears as a question every once in a while.

Have you heard about such-and-such an influencer? What do you think about the course by so-and-so? I intend to start investing in short term rentals (STR), which mentorship program do you recommend me to take?

I have opinions. Nobody asked, but I’m going to share them with you.

Most of the questions, of course, concern people, events, groups and organizations which sell tickets or charge membership fees. Some of these, not all, will set you back hundreds of thousands of dollars to join. If you are an aspiring investor, or someone who would one day like to become an investor, you would ideally want to know if you will be getting your money’s worth. Especially if you are going to shell out those hundreds of thousands of dollars.

Are these people, courses, events, groups, and organizations legitimate?

tl;dr: Maybe. Some of them surely are. It becomes important to recognize who offers value, and to estimate whether the value offered is worth the price to you.

At the heart of all the courses, events, groups, etc. are sales.

Salespeople have long figured out that the actual product being sold does not matter, so long as there exist willing buyers. The product could be a red solo cup, a car, or an abstract widget. So long as there is a way for the salespeople to find someone who is willing to exchange this product for money. Of which transaction, of course, the salespeople take a cut.

Course material, events and group memberships fit the broad class of intellectual property (“IP”). Everyone likes to sell IP, because once it is produced, it costs you nothing to prepare and sell more of it. Compare that to say selling cutlery, where the price of each cutlery set goes towards the “cost of goods sold”, i.e. the fractional part of the material and labor that had to be paid in order to produce the unit. In contrast, selling a real estate course to a new person costs the IP owner more or less nothing. We say that the amortized cost of an IP product goes down to zero when spread over sufficiently many sold units. The more you sell, the less it the manufacturing cost is for each unit. Or, differently said, the marginal unit cost of each newly sold unit is zero. This explains the popularity of courses, or if you are IT-minded, of software packages. It also explains why courses are more popular than books: courses are ephemeral and can be resold many times, while books can be sold once and are then reused, without a change, many times over. To keep with the IT parallel, this same line of thinking has moved the software model from individual unit sales to an over-the-internet subscription.

The cost-efficiency of IP sales is tremendously attractive to anyone with a penchant for sales. For the right product, the return on investment is hard to beat. Even very successful real estate investors, even on their most successful projects, can not beat the return on investment that can be obtained by packaging and reselling intellectual property. This in turn means that a successful real estate investor would at some point probably consider packaging and reselling their know-how to whomever will buy it.

I think this is part of the answer to the famous cynical question of “if you’re so successful in real estate, why aren’t you doing more of it instead of organizing seminars and selling courses”. On the buyer’s side, I suppose that receiving this well-rounded knowledge packet could be useful in the right hands, and could create a larger number of successful real estate investors. This is at the heart of all the courses.

Another purpose that IP has to a real estate investor is access to a pool of people with money. Real estate is very capital intensive. No matter how big a pot of gold you start with, you will eventually run out of money buying real estate. And to continue to grow your business, you will need to start raising capital. Real estate group membership sales provide the real estate investor with access to would-be limited partners for future projects.

This, in turn, means that there exist people, courses and groups, whose systematized know-how is worth some amount of money.

The flip side of zero marginal cost means that it is also very easy for “grifters” to enter the same arena. If you follow social media, you may recognize them as those who try (almost always too hard) to show how a specific thing they are selling leads to a lavish lifestyle (big homes, fast cars, what have you), with the actual know-how as a distant second thing.

How do real estate courses work?

tl;dr: they try to sell you stuff.

Typically the courses are set up as a sales “funnel”. A funnel is a sales term used to conceptualize “filtering” potential buyers from a large community of potential buyers down to a few of those who actually make the sale and get “converted” (their interest in the thing you are selling is “converted” into a sale, i.e. money).

As way more people are curious about real estate investing than are ready to take the plunge, the RE “gurus” maximize the return on investment on their IP by charging the community at large relatively small sums, but then try (very hard) to sell “advanced” material to a minority of those whose interest gets piqued by the sales pitches intended for the wide side of the sales funnel. Here is a typical tiered list:

The real estate course structure is typically tiered:

1. Introductory “Course” (Free): Previously a short hotel seminar, now usually delivered via social media through low-cost posts and sales pitches.
2. Focused Seminars (Approx. $1,000): Specific, in-depth weekend long seminars. Often peppered with sales pitches for “advanced” memberships and courses, below.
3. “Advanced” Courses (Approx. $10,000): Higher-level, more comprehensive courses.
4. “Memberships” (Approx. $100,000): Exclusive access to “focus groups,” “brain trusts,” or “mastermind groups.”

What’s in it for the buyer?

tl;dr: they try to sell you stuff, that’s it. The only remaining question is if what they are selling is useful to you.

By now you are probably wondering why I’m talking about sales and funnels. Where’s real estate in all of this, and where are you in that real estate picture? If by now you weren’t asking what’s in it for you, this might be a good time to start asking exactly that.

This brings the story to my point. Nothing of the above is meant for you. It is meant to provide the salesperson with a steady income stream. There are no guarantees that any of this will fulfil what you want.

What you may want is probably somewhere in the list below.

• You never invested in real estate (or at all), and think it might be time for you to do something to change that.
• You think it might be a good idea to diversify your existing investment in real estate.
• You think you might learn something special if you join a paid study group.
• You think joining a paid group may guilt you into making an investing move you procrastinated on.

Are real estate courses worth it?

tl;dr: you can get the same stuff for free. If you are willing to deal with a bit of chaos while you collect it.

As with many things in life, the real answer is that it depends. It depends on what you personally expect to get out of them.

If you think joining a paid group may guilt you into making a move. Most likely, joining a paid group will not make a difference. Don’t join for this reason, unless you have money to spare.

If you think you may learn something special, I think this usually does not happen. You will hear about how people take calculated risks, and sometimes get away with it. Most of the time, this is something you can learn from books.

If you feel alone in your endeavors. Joining a group may be something for you. Note however, that there are free real estate meetups. One value proposition of joining any groups, including paid ones, is that you can be surrounded by like-minded people. Talking to your friends is nice, but if your friends do not care about real estate investment, as most friends don’t, it will be hard to get a productive reflection from them. Instead of persuading them to invest with you, join a group of people who already decided that they want to invest, and try to find someone you can click with.

If you feel you need a teacher, or mentor. Joining a group could give you that. Group owners often offer personal mentorship for extra pay. But also, you could simply ask someone who has already done what you want to do, and chat with them. Find someone in your local real estate investor group.

If you do not have an idea whom to talk to, you can talk to me. At the bottom of this page is a calendar link, and you can set up a meeting to chat with me. I am not selling anything, I’m simply a real estate nerd who likes to meet other real estate nerds. You can talk to me as if you’d talk to a friend who just so happens to share your interest in real estate. I don’t sell a course, but I know a thing or two about real estate and I’m happy to share for free. You just need to be a decent person. It probably won’t be as polished as it would be if it were a pre-prepared course with homework assignments, role play and such, but it’s genuine. It should also be useful, but if it isn’t, well it was free anyways. At least you will have gotten a nice chat out of it.

If, after talking to me, you still want to go buy a course, feel free to do so.