Four Ways to Spot a Self-Proclaimed Expert
Hundreds of investors call the offices of Rehab Financial Group throughout the course of a week, all with a different story. Most are very forthright, genuine, and sincere in their efforts to communicate their past endeavors and current financial situation, but where there is a majority, there’s a minority, and that minority in the real estate investing business is the group of self-proclaimed experts.
Like a couple of rough characters throwing snowballs at Santa at a football game, a minority can ruin the reputation of the rest. This minority could be a lender, a broker, or even a fellow investor looking to joint venture on project with you. No matter their title, traits of this minority are often eerily similar. We recommend looking out for these experts and avoiding them as best as you can.
To help spot them, we created this countdown of their most common characteristics:
4) Foul Language
This is low on the list because it is not always the case, but it sure is a red flag. Some think they are the Wolf of Wall Street and that it is socially acceptable to blurt out vulgar language to someone they barely know to get you thinking, Hey, this person is pretty comfortable in their skin. They must be pretty successful.
We’ve been to many meetings and on ample calls to know that, more often than not, they are quite the contrary and the vulgarity is meant to cover up a lack of substantive knowledge.
3) No Due Diligence, but No Problem
Maybe it’s just us, but before we lend money, we want to know a bit more about the person we are lending to and what the money is going toward. You don’t have to look at this in just real estate terms.
For example, someone in your social circle, but you barely know, asks to borrow $500. You’ll most likely ask what it’s for and attempt to learn of other’s whom the person already asked, if any. You might inquire as to this person’s ability to repay a debt. With real estate, you will be dealing with much more money than $500, so much more due diligence is required, yet there are a select few that place little to no importance on it.
Your reaction shouldn’t be, Well, that was easy and move on. It should be, what are they not telling me and ask more questions.
2) Never Their Fault
It could be a bankruptcy, foreclosure, late payment or divorce, a self-proclaimed expert will almost always deflect the blame onto anyone from their wife or husband to their mother’s friend’s boyfriend’s dog. Failure is a part of life, so accept it, embrace it, learn from it, and for the purposes of this article, learn to notice when someone isn’t doing that.
The self-proclaimed expert is frequently always a victim in their own mind, yet to the outside observer, they are the architect of their own failures.
1) God Complex
We have all encountered the sales person that feels it necessary to drop your name at the beginning, middle, and end of every sentence. It’s a classic example of a good sales technique taken to the extreme. Similar is the sales technique of prefacing the pitch with achievements so that the recipient is aware of the success of the sales person, but it can be taken to a whole new level, which is what our self-proclaimed experts do. It is actually comical to listen to this in action. If you were to just listen to them and do no further investigation, you would be of the understanding that every investment they touch turns into Alphabet Inc. (Google) circa 2004. Take everything with a grain of salt.
Skepticism is a good thing. An inquisitive personality stems from it, which greatly attributes to the benefits of being skeptical. The point is not to be looking over your shoulder at all times, but when dealing with large sums of money your money picking the people you work with is as important as picking the right investment or project, and you wouldn’t slack on that, would you?
There are a lot of characters out there who will sell you education on real estate investing and house flipping. Be very careful who you deal with. Many exist for the sole purpose of making your money their money. If you go to a free seminar that is really just a sales pitch for a costly education program, run for your life. Many of these experts are nothing of the sort. Be careful who you give your money to.