The New York City real estate frenzy may be over, but the desire for buyers to get a leg up and find deals remains strong. As a result, the focus of courses taught by many “experts” has shifted toward advice on profiting from a souring market. Recently, The Real Deal decided to check out two of the most popular classes.
PropertyShark.com, which has offered online and live seminars in the
past, launched Property Shark University in February. Its seminars include classes on short sales, investing and even home inspection services. Classes range in price from $29 to $199.
“You can do only so much online, and the demand kept building,” said Brian Scully, the company’s vice president of marketing. “We’re selling out almost everything, if not going over capacity.”
A recent PropertyShark.com seminar on buying “distressed properties” attracted hopeful homeowners, brokers and immigrant investors. Held in a Midtown meeting room, the seminar was taught by Matt Lucks, the company’s training director. Lucks opened by describing how he broke into real estate, buying “fix and flip” houses on Staten Island and later moving on to multi-family walk-ups in Brooklyn, where he invests now.
“I don’t have a 401(k). I have these buildings in Brooklyn,” Lucks said.
Promising the class, “I’m giving away all my secrets,” Lucks, with the help of a laptop and projector, guided attendees through the steps of buying homes in pre-foreclosure. Above all, he emphasized that being nice to people who fall behind on their mortgage payments is the key to finding deals.
“Put some humanity into this … if [homeowners in pre-foreclosure] smell money on you, they’re not going to talk to you. But if you’re there to legitimately help them solve their problems, they are more than willing to play ball,” he said. “You don’t want to call people, and you definitely don’t want to visit the houses. I know somebody who used to do that, and I said, ‘It’s just a matter of time before you get a shotgun pulled on you.'”
In addition to telling attendees the ins and outs of buying homes in pre-foreclosure that could be flipped for profit, Lucks gave tips on getting into the “wholesale” market, which he described as “playing fetch for other investors.” According to Lucks, this method costs only time and earns money via finder’s fees by selling buyer
contracts to known investors in various neighborhoods.
Throughout the seminar, some attendees, particularly the investors, asked questions that hinted at a desire to go around the rules in order to make a profit. Lucks steered questioners away from this path, saying of short selling, “There isn’t anything shady here.” Lucks told his students, “Nobody should ever quit their job doing this,” emphasizing that it could take years to build up the knowledge, confidence and contacts to make money as an investor in pre-foreclosure properties.
Real estate instruction offered by
the Learning Annex took a similar tack.
The Learning Annex, which offers instruction in jewelry making, successful dating and wine tasting, has also offered real estate classes for years. Classes usually cost $40 to $60 and are taught by veteran real estate professionals.
At one recent seminar called “Real Estate for Beginners,” Dale Siegel told attendees that when she is asked her profession, she continues to tell people she is an attorney even though she has been working as a mortgage broker for the past two decades in White Plains.
“I say I’m a lawyer because I’m a little embarrassed with what’s going on in the industry,” she told her students.
The two-and-a-half-hour seminar, which ran without breaks, was enlivened by advice from Dina Sussilleaux, a broker with Corcoran, and Jody Fay, a lawyer for a title insurance company.
Sussilleaux made a convincing case that having a broker help fill out a lengthy co-op application, for example, is invaluable. She advised buyers to find a broker whom “you can let your hair down with.” Sussilleaux made a pitch for her own firm and was dismissive of competitors.
Fay explained that “there is no regulation” on legal fees charged in real estate deals, but advised students to stay away from discount attorneys charging less than $1,000 for a closing.
“Don’t go into the yellow pages and pick the guy with the biggest ad,” said Fay. She gave tips like making sure buyers or their attorneys review co-op board minutes before purchasing these apartments to look for upcoming special assessments, for example.
Fay also explained how to take title of a property as an investor using LLCs, corporations, partnerships and trusts. Fay ended her lecture by describing the recently passed Home Equity Theft Prevention Act (which Lucks had mentioned as well). Fay described the legislation, which allows distressed home sellers to potentially reclaim properties up to three years after a sale, as ill-conceived and warned students to be aware of situations in which the act could upend their purchases.
Siegel steered students to the Wells
Fargo bank Web site for current interest rates and advised everyone to pay a reputable service to get their credit score. Emphasizing the subprime mortgage crisis — “As you know, there is a lot going on with the industry, all bad” — Siegel ended the class by informing students of the newer, more stringent requirements for getting a mortgage.
Both seminars emphasized that buyers should expect to do research and avoid shortcuts. Siegel said to stay away from Web sites like LendingTree.com. Lucks advised students to stay away from “get rich quick” schemes, saying that legitimate and profitable investing requires hard work over a long period of time.