This Is How A Commercial Coaching Scam Works
By Duncan Wierman on Jun 29, 2010 in Duncan's Opinion
I am writing this so you know how to avoid a real estate investing scam at a seminar. Sure, mentoring is a good thing, but how you choose your mentor is another. Commercial real estate investing has the distinction of of being one of the few investments that enable skilled and well trained practitioners to make money regardless of current economic conditions.
Because of the recent soft commercial market and economy, hundreds and thousands of would be investors hoping to make a quick buck buying cheap property are entering the market. Lacking the expertise to find deals, these dreamy eyed investors turned to " self professed" commercial gurus : (you know who I am talking about ) who made pie in the sky promises. These "want to be" investors eager to learn the trade dropped 10K - 30 K at her well hyped bootcamp. Unfortunately they have been taken by a huckster. They are very happy to relieve naive investors of their hard earned cash. If you ever consider any real estate training program, educate yourself first and avoid becoming a victim.
It is easy to be taken in by this sales professional. However, dig a little deeper into their back ground and you would be shocked. Have they ever personally invested in Commercial Real Estate before? The sad truth is NO. A sure sign of a scam artist is that they avoid specific questions around their net worth, and experience level is brushed aside because they don't want the truth to get in the way of a perfectly good fraud.
Here is how it works
How many times did they use the tactic at the event and on webinars to mention certain "buzz" words like motivated seller, power of leverage, partnering, desperate lender? How many times did they refer to a NO Money Down Deal to get you to sign on the dotted line for her coaching program? They promised you the world, but I am telling you she /he/ they cannot deliver.
Did they start their presentation o with some "folksy" stories about "real" deals that he/she/they supposedly have done, (KH - deals from your previous employer are not your deals) and it was full of embellishments. Unbeknown to you, you're being led down a path to a major up-sell. Before the big push, they will try to pre-qualify you for it by teaching you a secret technique that will allow you to make a "no money down" purchase. (Which was so old and doesn't work anymore its ridiculous)
The tactic to part you from your money was that they will partner with you on deals. (After the event and your refund period is gone, they now say "OOPS , NO sorry no you have to qualify for the money" In other words this is not partnering , it is a LOAN!)
At this point, he/she instructed you to :
1. Call your credit card company and request a credit limit increase because you need to take advantage of limited spots going fast !
2. Offered a payment program.
Now instead of using your money to invest in real estate, you have been pushed to purchase more training. The excitement in the room increases and rose to a crescendo pitch and then many other attendees where like sheep to the slaughter . I bet you did not know there were probably PLANTS in the room to get the line moving!
Did you feel inclined to step up out on a limb and make a leap of faith, falling for the principal of "social proof" seeing others making the purchase, you too try to prove your commitment to your real estate investing future by following their lead? At this point .. Yes.. You been SUCKERED !
Here is the other item that annoyed me, The continuing pitch of "done for you" ! Real Estate investing takes time and work. Anyone who tries to say, just go find us a deal and we do all the work, and you get the money is a LIAR. They are deceiving you with false promises and false teaching so they can hide their true intent.. to sell you a worthless bag of goods! Don't be a victim. You are deceiving yourself if you bought into her crap.
SO if you got suckered, chalk it up to experience. I hope you can get your money back, but I am sure you cant.
Here are the 6 Key attributes to a Good Mentoring Program
1. Does the coaching program offer personal coaching be a professional and experienced staff in a physical location you can visit? ( not a call center where some reads from a script )
2. Does the training program have additional materials you can borrow? I do know that Karen sent every real estate investor guru an email asking them to give one of their courses to her students, so that they would have the opportunity to sell to them later. - Not quite the same thing.
3. Can you network with other students to expedite the learning process and possibly forge relationships?
4. Will she provide you with a list of former students you can contact?
5. Does she have an established track record with the Better Business Bureau?
6. More importantly , are there any written guarantees that will be honored if you don't do a deal?
So you probably fell victim to a good speaker who is more skilled at selling themselves then at commercial investing. Let me recap how you fell spell without even knowing how you whipped out your credit card.
UPDATE
What do you think of Karen going on vacation directly after selling 3 million in coaching ? Should she be not rather fulfilling the partnering she promised at the event ?
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July 1st, 2010 at 5:02 am
Sounds like a certain Hawaiian’s M.O. – raise the credit card limit, so you can get my upgrades. He denied knowing that his seminar people were using those tactics when on the camera, however.
July 1st, 2010 at 10:16 am
Who are you referring too?
July 3rd, 2010 at 12:26 pm
He is referring to the author of “Riche Dad/Poor Dad”! The problem is that some people are greedy and savvy while others are desperate, broke and lazy so the sound of just paying money to get a “system” that is going to do “all” your work and all you do is collect money is like music in most peoples airs!
And unfortunately I once was one of those but fortunately it didn’t cost my a fortune to arrive at that conclusion!!
July 4th, 2010 at 8:05 pm
I am appalled by all of this nonsense. I am a student of Karen Hanover’s and I have to speak up. Not only has she changed my life by helping me with my first deal, but anyone who knows her would agree that she truly cares about people and goes above and beyond. As far as your Sperry Van Ness email, I don’t understand it. She worked out of a Sperry Van Ness office when she represented me in my deal in Tempe. I had numerous conversations with both her and her broker at Sperry. I would imagine that representing yourself as associated with a firm like Sperry would constitute a crime and cause her real estate license to be revoked. Her license is still active and upon calling Sperry they admit that they have not filed suit against her. Hmmmm…. why would that be? Shame on whoever is posting this crap as Karen Hanover is a wonderful perosn with lots to give!
Wilma
July 4th, 2010 at 10:12 pm
Wilma, will you please supply us with all the information to validate your statement
FACTS :
1. KH did not work for SvN as stated by SvN corporate
2. She created two false associations to give you the appearance of success
3. KH is being investigated by the Federal Trade Commission for both false claims, and incentivizing others to promote her credentials
4. Karen Hanovers personal / corporate background check by attorney is posted in the other post. She has 7 foreclosure, numerous liens against her and show not ONE commercial deal
So your claim of success with her is very suspicious until otherwise proven. Show us the Money ..
Duncan
July 5th, 2010 at 11:12 pm
Want another laugh.
Here is Karen Hanover posting to the information marketing guru site :
On Mon, Jul 5, 2010 at 11:54 AM, wrote:
Hi Everyone,
Maybe it’s time we ban together and pull back the curtain on these sites by posting blog entries and using social media to explain that many of these postings are for self promotion, extortion, and SEO purposes. When I speak about this I find that so many people have no idea. We can site the lawsuits against ripoffreport.com, etc. and remind people that you never know who is posting which could be an ex, disgruntled employee, competitor, etc.
We should choose a two week period and do our own “launch” bombarding our lists with well written, consistent messages about these sites. We should likely do this annually for reminding veterans and informing newbies.
Thoughts JV’ers?
Karen Hanover
Sent from my Verizon Wireless BlackBerry
—–Original Message—–
From: Cris Chico
Sender: jvupdate@googlegroups.com
Date: Mon, 5 Jul 2010 09:55:28
To:
Subject: [JVupdate Chatter] another guru basher
here’s a new one that i just came across
http://www.fakerealestategurutactics.com/sitemap-page-order.html
look’s like he is just getting started
im sure many on this board will be here soon
July 6th, 2010 at 2:42 am
This really bothers me……We all cunsumers need to figure out how to weed out such scam artists like Karen Hanover…The problem is there are so much information out there, and sometimes it is tough to discover important information about the gurus….sometimes we have to experience and go through the hussle to fight back for refund or other remedy. I really hope there are some ways to compile the information about those fake grus, and find out before joining them…..
July 17th, 2010 at 3:26 pm
@Wilma Akern
Hi, I am a student of Karen Hanover and attened the bootcamp in Dallas 2010 and signed up for the “fast-track or her “bon-bon” program and have not received a contract or other information on the deal. DID YOU CLOSE ON THE TEMPE DEAL WITH SEAN CARPENTER USING THE TAX CREDITS? I am starting to become very worried about the deal and losing my money and with all the negative post on her and the company, thanks.
July 17th, 2010 at 3:31 pm
You need to read this post:
http://www.duncanwierman.com/blog/in-the-news/karen-hanover-suckered-1000s-commercial-short-sale-launch/
This is happening to many, many people. Don’t expect any contact from her . She is in Hawaii for 4 weeks.. spending your hard earned money..
July 17th, 2010 at 9:46 pm
Tempe deal? Uhmmmm……OH, she cited that example in August 2009, almost a year ago! Is she still telling that deal is under contract (not closed?) I do not know if she closed the deal or not, but if she is referring to the same property and telling people she had it under contract, do not buy what she said! Don’t you think if she got it under contract last August, is it fair to say closed the deal or did not fly? I have never heard that sale pending almost year and keep telling people she got the deal that she did not close.
July 18th, 2010 at 10:35 am
Victims of Fraud and Misrepresentation and people who feel they have been cheated and lied by Karen E Hanover (Commercial Investment Education) please contact the attorneys office of Edward Cross.
We are getting out there and gonna put her and her entire crew out
LAW OFFICES OF EDWARD H. CROSS & ASSOCIATES, PC
72-980 Fred Waring Drive, Suite C
Palm Desert, CA 92260-2898
Tel.: 760 773-4002 / 949 789-7800
Fax: 760 406-5979
http://www.edcross.com
July 19th, 2010 at 6:26 pm
@Duncan Wierman
Duncan,
I notice that ALL OF THESE POSTS ARE FROM ABOUT 3 PEOPLE… who keep posting…
I was shocked when I saw the post from Sperry as she was with them when we were working on my deal in Jacksonville. I had many conversations with her and the guy who owned the franchise. Karen was associated with one of Sperry Van Ness’ franchises and not corporate as you suggest. So technically the letter from Maria Doop is correct but it is misleading. Case in point: Sperry never sued her and her DRE license is intact. They would have revoked it if your claims were true.
As for her credentails, please specify which ones you are referring to and I will investigate. She does return my calls and emails and I HAVE HAD GREAT EXPERIENCES WITH HER INCLUDING FASTRACK. Also, how do you know she is being investigated? Has some government authority contacted you? I sure hope not! We want her spending time on our deals and not distracted by a lawsuit. If something happens to her our money will ceetainly be gone!
Finally, as for foreclosures… WHO CARES? Why would anyone continue to make payments on properties which negatively cash flow and have more debt on them than they are worth. She talks about these properties in her bootcamps. If it were a stock, you would just simply sell. But because it’s real estate it’s more complicated. She talks about these foreclosures so people can learn. And as far as commercial property, after these postings I’m sure she doesn’t hold property in her own name. She advises us all to use LLC’s.
As Karen says if these 3 people spent half as much time doing deals as they do complaining, they might be in a better place.
July 19th, 2010 at 7:19 pm
Wow Wilma – I hope you can can analyze deals better than you can count people who are upse and are posting. I sure count more than the 3 your refer to. Refer to the main post , where there are over 50 comments from people ripped off.
How do you account for false press releases put out by her, How do you account for deals that never happened she bragged about?
I cant believe you don’t care about her foreclosures and tax liens. Huh? So she walks away from them, instead of fixing them. Sorry. I have also had property that at one time did not perform and where negative. I did not just stop making payments on them, or not paying my taxes on them.
You still have not proofed up your commercial success with her. She is being investigated because numerous people have initiated complaints with various state attorney generals offices. There is also action from Ed Cross in filing a class action suit.
July 20th, 2010 at 5:00 pm
Hi Wilma, Can you give us the name of one Company? If she is a real estate guru and put people in deals they would have some sort of documentation so they know where there money is. Just one Wilma. I do not think you can.I will wait to hear back.
Obviously you know nothing about real estate either.If she had equity in these properties(actually put money down) she might not be walking away from them so easily.So no equity.
There are no deals in the past or future.The deals she put together are not doing very well, are they? You do not walk away from property. It is always worth something. She does not own a house because she probably can not get a loan. However she can pay cash for a house because she has scammed plenty of money from innocent people.
If you knew anything about Real Estate you would also realize she makes up titles for herself. Have you given this woman any of your hard earned money? Show us on paper.
You are either a plant yourself,or one of her friends that know nothing about real estate that she hires.
When this is all said and done everyone will be under investigation because all Karen does is Brag about what is going on with her. Lets see who is sticking up for her when you have to testify in front of a jury.
Try and contact people that worked for her only months ago.You can not reach them either because they are no longer there. Just fills their space with more unqualified people. Anyone working for her at this point knows this woman is a SCAM and is not working on any deals. Why would you want her to work on any. Look at her record.
That should say it all. How do you people sleep at night?
She is giving more boot camps as we speak in California. Hope the authorities show up.Start the refunds because hopefully one will be the FBI
July 23rd, 2010 at 2:52 pm
What state are you out of and where would one find you with the Better Busines Bureau?
July 23rd, 2010 at 2:54 pm
Who is this question directed to? Please use the @ sign to the name of the person who wrote comment or post.
July 24th, 2010 at 11:32 pm
@Duncan Wierman
Actually, she’s teaching a bootcamp this weekend in Irvine. I spoke to her today. See my synopsis of our discussion where I talk about checking out the bootcamp.
July 24th, 2010 at 11:44 pm
@Karen hanover student
Karen referred to this today. Their infrastructure was not ready to handle so many students and the emails that DCs office is giving out are not going to Karen. You can sign up for her other bootcamps and I’d suggest you show up and ask questions. Call her number and ask for the website address. (877) 877-1974
July 25th, 2010 at 11:40 am
Why would Karen have you do her dirty work? Why would she not put a stop to it once and for all here where all the complaints are about her? DC and Karen are partners? Why would he not give her information about their coaching program considering they are under investigation? Something does not make sense here?
July 25th, 2010 at 9:02 pm
Hello @ Happy With Karen,
Since you spoke with her today you must be working with her, or you are a family member.
There are no return phone calls. Hense the outrage we are all beginning to feel.
Can you tell the rest of us how to do this,actually have a conversation.
What is your number so I can call you, since you talk to her.