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This Is How A Commercial Coaching Scam Works

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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47 Responses to “This Is How A Commercial Coaching Scam Works”

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  1. 21
    Duncan Wierman Says:

    What is your number so I can call you, since you talk to her.

    Hi, Dial it, and see what the response is:
    Call her number that HappyWithKarn posted above… (877) 877-1974
    Lets see if you get a refund…

  2. 22
    Jake Says:

    Is Karen Hanover NOT with DC Faucett at this point ?

  3. 23
    Duncan Wierman Says:

    I understand from very good sources they are not. I heard that Karen said she would never partner again on a launch. I think the partnership worked like this.

    DC smelled money from a product launch so he offered to partner with Karen to use his contact base. Karen of course, jumps in and uses DC’s network tuned into short sales to create much interest , and make a fortune , then takes the money and runs.

    Neither wants to fulfill the obligations, the launch formula was simply about getting your dollars quickly and moving on in this case.

  4. 24
    Richard Says:

    @Duncan Wierman
    Thanks for all the posts about KH! Luckily I didn’t buy their commercial product launch. The hype was too thick! Please give me your opinion of DC’s luxury home short sale course. I am currently doing about 8-10 short sales per year in the 100k price range. If the things DC says about luxury home short sales is even modestly true, I would be very interested in entering that market. However, his promotion for that product is dripping with bs hype! Can you give me any feedback about it…or about DC in general? Thanks!

  5. 25
    Duncan Wierman Says:

    @Richard –

    I recommend other Short Sale Trainers because I have worked with them, and they have good success with there students. I will not endorse or say anything negative at this point about DC Fawcett in regards to his course. I have his course. I don’t think his course is any better than any other short sale course out there. The information is usable.

    If however you think you are going to get rich in a short time period with short sales – you are mistaken. DC only recommends luxury homes because the spreads are bigger when they happen. Short Sales are a tough , time consuming and frankly a pain in the butt.

    I believe there are far easier way to make money faster in real estate investing. DC is a info marketer and is in the information business to make money because its easier than real estate! You are going to get lots of hype from him because of this. Its a shame that just too many people are looking for the next get rich quick scheme..because that’s why info marketers market that way. I believe this is the only reason he partnered with Karen Hannover because he smelled money around the marketing hype that can be created based on the media reports of commercial loans in potential trouble. Its certainly not because he has done a commercial deal either. I understand from the event, he was still pushing Luxury Short Sales too.

  6. 26
    Robert Kim Says:

    @Richard, if it’s any help, DC was trying to sell AgentPro247 as a way to get commercial short sale leads in Dallas and gave a coupon code to get us a discount that also put money into his pocket. I know someone who tried AgentPro 247 and ended up cancelling it since it was worthless.

    As Duncan says, there are plenty of short sale courses out there and they all pretty much say the same thing (I actively do short sales and recently did one where the debtor/seller owed about $287,000 and got the price down to $113,000). For me, it comes down to the credibility and integrity of the person selling the course or boot camp. From what I’ve seen of DC now and the dishonesty he is capable of, I’ll gladly say what Duncan is reluctant to say. If DC told me on a sunny day that the grass is green and the sky is blue, I want to check this out myself 3 or 4 times before believing him.

  7. 27
    Richard Says:

    @Duncan/@Robert -
    hey Duncan and Robert, thanks for your input! Yes, I have been doing short sales for 6 years. I work very hard, lots of hours, 6-7 days a week. I am scratching out a living, but I want more. The larger spreads in luxury homes are attractive. I thought maybe there were some special techniques or knowledge to working that arena. And yes, of course I would like to make more money faster…but have already learned the painful lessons that real estate is definitely not get rich quick. Best of success to each of you!

  8. 28
    Robert Kim Says:

    @Richard: I pretty much work the same price range you do, Richard, except for the occasional whale that swims my way. In my experience, all residential short sales are pretty much the same. The main difference is the kind of bait you use to bring in more whales than guppies. The only thing I could suggest is you go fishing in a pond with bigger fish if you want to land the luxury homes. DC’s materials sure aren’t going to give any magic pills to do that either. There’s better stuff out there.

    I’ve never found short sales to be hard, per se, as it’s all a numbers game. You win some and you lose some. I think the key is to have really good people work with you who know and understand what to do. The short sale I mentioned above was a house I bought and flipped out of state, I probably put in a total amount of working time of not even a week, although it stretched out for 6 months, and about 90% of the time I was working it in my pajamas or my underwear (about 5% of the time I wore clothes to do stuff like check mail at my PO Box, and I’d rather not tell you what I wore the remaining 5% of the time). Man, I’m glad I covered up the built-in webcam on my computer.

  9. 29
    Duncan Wierman Says:

    @Robert – you got to start blogging and teaching.. you got the style and know how to do it right.. Your bonus chapter can be “What to wear during short sales to attract more deals”

  10. 30
    Robert Kim Says:

    Thanks for the kind words, Duncan. It is on my bucket list to teach only at the finest nudist colonies that money can buy.

  11. 31
    Denise Says:

    Hi, Thank You for all the great info here… I am a gold member of DC Fawcett and attended his resent seminar in Tampa at the end of July 2010..

    It was a big sell fest…. You just do not know who to trust anymore… I was going to upgrade to Platinum which is quite expensive and then I heard about this Karen Hanover being so dishonest and was really shocked that DC did not check her out before partening with her and setting her lose on his list.

    With DC’s program for each property you submit for them to do the negotiations with the lenders for you, a fee is charged and this is whether the property can be a Short Sale or not. So I was considering doing the platinum level where I could get my own coach and submit as many deals as I want without a fee, just the big platinum membership price tag!! I just do not know what to do.

    My attraction to DC’S program was the fact that they are suppose to do all the negotiations with the banks and various lenders for you therefore eliminating what they tell you takes a long time to learn… This seemed sensible to me… Gosh, but after seeing some of the greed going on in Tampa I am just totally confused…

    Is DC just a good business man and needs to promote aggresively to keep his employees paid or he just a greedy uncaring scoundral??

  12. 32
    Duncan Wierman Says:

    In my Humble Opinion…. I think when he started out good… he was a stand up guy. I think the dark side of greed has gotten hold of many promoters. Lets be honest .. there is NO short cut to wealth. It takes work. There is NO way his team can handle 1000′s of students negotiations.

    Plus many states have their own requirements who can do negotiate. If this was such a good deal, why do they charge you upfront or a fee at all if they partner with you. They should be paid on performance, NOT upfront. They make their money but you don’t.
    I put my course up against his any day and I will give you a 7 day free trial and only 49 a month. I would however advise you to look for the professional in your area and certified to do this. Check out http://www.ShortSaleAutomation.com ( sure its a blatant plug for me – But what have you got to lose with a 7 day FREE Trial ) I put my money where my mouth is to prove the quality and my training first. – Duncan

    If it was all so easy – everyone would be rich

  13. 33
    Robert Kim Says:

    @Denise:
    I find him to very dishonest. He and Karen Hanover are playing a shell game with several million dollars they fleeced from students who paid them $30,000+ for commercial coaching. DC says Karen has all the money, Karen says DC has all the money.

    DC promoted himself to be a commercial real estate expert, and is still doing so, but he knows very little about commercial real estate. This much was evident when I saw him present how to do “commercial short sales” in Dallas in June this year. Many people lost a lot of money because of DC and Karen. If you are happy with him, I’m glad but my view of the guy is that he a big scam artist. More on this here:

    http://www.duncanwierman.com/blog/in-the-news/karen-hanover-suckered-1000s-commercial-short-sale-launch/

  14. 34
    Duncan Wierman Says:

    Makes for an interesting read about Karen Hanover belief about DC manipulating Affiliate payments:

    http://duncanwierman.com/images/karen-hanover-lawsuit-1.pdf

  15. 35
    Duncan Wierman Says:

    DC Just posted an email to his affiliates claiming that it was the tracking systems fault and not his. HUH. This is the guy who stood on stage at the JV Affiliate Conference and swore up and down that he only uses PAP as its the best in the world, and said he would not do a launch with anyone who was not using it.

    He shifts the blame again away from himself back to Karen Hanover. Funny thing is that he is basically saying .. hey you got screwed with my commercial launch but I still have my virtual short sale package … please promote me.

    http://duncanwierman.com/images/dc-affilate-email-Sept-14-part1.jpg
    http://duncanwierman.com/images/dc-affilate-email-Sept-14-part2.jpg

  16. 36
    Robert Kim Says:

    Never thought I’d live to see the day when “gurus” would scam “gurus”. Takes cajones for DC to smile at his colleagues and shake hands with them while plotting ways to rip them off when they’re not paying attention. Yeah, he’s a real stan-up with whom guy I’d like to do business and buy all his stuff XD

  17. 37
    Duncan Wierman Says:

    JP Moses has just released probably his most CONTROVERSIAL blog post ever! Click on the link below on the email copy that was sent announcing it!

    Date: Sunday, October 3, 2010, 11:30 PM

    He states, “based on the 67 salty comments left in the last 24 hours alone, I’d say Saturday’s blog post struck a raw nerve… ”

    http://reitips.com/open-letter/

    Again I want to say for the record that my goal is NOT to stir up a hornets nest or make enemies…I just feel it’s time I come out and openly say what most of us are already
    feeling and thinking.

    Did you happen to catch it yet? If not, I’d really appreciate hearing your candid thoughts on it please…

    “To All The Gurus We’ve Ever Loved Before (An Open Letter)”

    Please be honest…but also let’s keep it positive. With a topic like this, it can be easy to go all negative. But that’s really not my goal here…

    Thanks in advance,
    …jp

  18. 38
    Duncan Wierman Says:

    The only thing is that he did not go as far as to name names. I think its time to bring about a change in the industry. JVUpdates.com is the festering ground for new more experienced product launch promoters to prey on new people. Trevor Mauch wrote a long expose about how the site helps people sell.. He fails to reply to why I was banned from the site for reporting on people perpetuating fraud!

  19. 39
    REBECCA Says:

    I forwarded some of the emails back and forth from Karen Hanover to me and I sure hope Duncan will posts it on all his blogs. I am completly beside myself today knowing that Karen Hanover and Sean Carpenter are holding a gathering to suck more money from more people that don’t even know what’s coming. This feels like a very bad dream. I’m still in shock that Karen Hanover took my 30 thousand dollars and now I have to go through all the legalities to even try to recoupe something back. But, I will do what I need to do to be heard. And I will not stop until I am, and Karen Hanover and her help: Jill and Jena are arrested for grand larceny.

    And yes Jena you know that Karen burned me out of 30 thousand dollars and you can’t say I was a problem student or anything like that. I am a good woman and I did not deserve this at all and neither did the others going through this as well. I know of alot of other fastrackers that have been scammed just like me. Posting these blogs does help and more are coming out of the wood work, I alone from blogging have over 25+ people devestated from this scam. It wasn’t just 30 thousand dollars, you even had people travel and pay thousands in travel and lodging just to rape them alittle more. And just because you think Sean Carpenter is going to cover your ass and flaws and hurry and try to show some kind of documentation that you did walk a property with students. Oh my God. that is so twisted. other fastrackers are going to have to be played even harder than me and have to travel twice just to walk through a property so they can show some kind of proof that they did something. CRAZY!!

    Any other fastracker out there reading this post that isn’t sure what to think, I understand..been there. But does this sound familiar? My first property presentation from Karen Hanover and the property she presents has no address? Ring a bell? How about being muted? Ring another bell? What about all the property information she say’s she’ll send later and then you never receive it? Ring any more bells? If you are another fastracker reading this blog, I am a real person that signed up as a fastrack student with Karen Hanover at the event she had in Dallas in June (gilly”s) and we probably met and spoke through out the 3 day event. You need to call me so I can show you, or introduce you to 26 to be exact.(and that’s just what I have from blogging) students that have been scammed. There is an attorney that has quite a few plaintiffs also. Rebecca 714-523-1546

  20. 40
    R Hounchell Says:

    Yep, Duncan was right and I was scammed too (fortunately I’m only out the $$ for her home study course I purchased at the DC Fawcett event held in Jan in Los Angeles.

    After her presentation, she was swamped by attendees, peppering her with endless questions out in the hallway of the LAX Marriott. After the crowd had considerably thinned out to 4-5 remaining individuals, I approached her to explain I was enthusiastic to purchase her course and partner with her, except I couldn’t commit to her bootcamps schedule (her stated requirement for partnering.) My reason was that I traveled extensively outside the United Stated and didn’t yet know whether I could deconflict my travel schedule.

    Quite simply, I explained that I would buy ONLY on her assurance that she would still partner with me in the meantime until I was ABLE to attend. She agreed to suspend the requirement to attend her bootcamp, provided I promised to only submit carefully researched deals that met her investing criteria.

    Fair enough, right?

    Upon receiving my product I discovered that I had not received everything I was promised, making it impossible for me to keep my end of our bargain. So I called and left messages with her support staff. No response. Finally I sent an e-mail to her staff, detailing the arrangement I had made with Karen.

    That e-mail did the trick.

    Karen promptly answered me personally, vehemently denying our entire conversation and making any such promise to me; I didn’t bother to reply as I knew with certainty that I had been taken to the cleaners by a con artist.

    Hey Karen, what goes around comes around and one day one or more of us will have the last laugh at your expense……

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