I started going to meetups for real estate to expand my business. One meetup was for real estate and business networking. I was a young entrepreneur looking to expand my business.
I met a man there who I will call Tom. That is not his real name. He was a self-proclaimed real estate mentor who had 30 plus years of experience guiding people through the ins-and-outs of real estate and entrepreneurship.
He had a small following that met once a week over Zoom. In those Zoom meetings, he would go through everyone's accomplishments and answer questions.
The red flags I wish I would have caught before I paid:
- The LLC which he ran his group through was not registered with any state agency. This LLC was only on his email.
- In order to be a part of this group, you had to pay $2,500-$5,000.
- His "group" was full of successful people who were already into real estate before meeting him. All of the stories they told about their success were from their own work. Tom just latched himself on to them so that new members would associate their success with knowing him.
- You could not pay him directly, but had to pay his son, who was not active in the group at all. His excuse for this was that he was trying to build a legacy for his son and he didn't need the money.
- He never paid for anything with a card. He only paid for everything with cash. His excuse was that he didn't need write-offs. Anyone who is running a business knows that all write-offs are important.
- He never formally organized any events. His favorite and most successful people organized and set them up. He just attended.
Red flags I wish I would have caught after I paid:
- He made his niece cash the check I wrote him for the education. His niece was 16 years old. His excuse was that he wanted to help her start her business. She cashed it and gave him half in cash.
- He once had me get him a hotel and made me use my ID and pay as part of my $5,000 entry fee. When I questioned why he needed my ID, he got defensive and said I can use the room whenever I wanted to.
- He had us make spreadsheets, which the template was made by someone else in his group. We then filled out those spreadsheets with the houses we found, and shared them with him. He then took that work and shared it with others in the group like he already knew about it and it was his own work.
- He eventually told me he hated being called a mentor.
- He had nowhere to stay so couch surfed with his mentees. His excuse for this was that he didn't need to spend money on accommodation if he didn't have to.
- He didn't drive and was driven around by his group. His excuse was that he had a driver in California so just preferred not to because he never needed to.
- He punished one of his mentees with a $25,000 payment because they accepted an earlier closing date on a house than he wanted.
The final red flags when it all came crashing down:
He moved in with me after I bought my house. He used me buying my duplex as a...