Florida resident Bob Morse hoped to earn a "substantial amount of money in a relatively short amount of time" -- and provide a more secure financial future for his family -- when he signed up for a seminar about flipping houses offered by Scott Yancey, known to millions as the star of the cable show "Flipping Vegas."
Instead, the experience left Morse so embittered that he demanded a refund of the more than $30,000 he said he spent for a year's worth of training he considered inadequate.
"I thought that I would have to sue," Morse, 58, told CBS MoneyWatch, adding that he still feels like he has been taken "to the cleaners and back." He recently had half his money refunded, he said, after filing complaints with the attorneys general of Florida and Utah and with the Federal Trade Commission.
Similar real estate seminars are offered by Tarek and Christina El Moussa, the stars of HGTV's "Flip or Flop," and Armando Montelongo, the former star of A&E's "Flip This House." The reviews are hardly glowing. More than 160 former students have filed suit against Montelongo, alleging the advice he sells to wannabe real estate investors for buying dilapidated homes, fixing them and selling them at a profit doesn't work as advertised. And there are complaints about all three stars on websites such as Bigger Pockets, a social network for real estate investors, and online forums such as Yelp.
Montelongo has denounced the federal civil suit as frivolousand has vowed to file a countersuit against the former students. His spokesperson couldn't be reached for comment.
A spokesperson for the El Moussas said they have data to back up the "efficacy and professionalism of our seminars."
The Better Business Bureau lists 57 complaints filed against Montelongo over the past three years, with 13 of the complaints closed over the last year.
According to the BBB, the firm that puts on the El Moussas' seminars, Success Path Education, also does business under the name of Premiere Mentoring. The BBB says Premiere has recorded 159 complaints over the past three years, closing 13 of them during the past 12 months.
April Critchfield, chief marketing officer of Success Path, said the BBB's data are wrong, and she denied any link between the El Moussas and Premiere Mentoring. (Utah corporation records show that the businesses are both located at 6465 S 3000 E in Salt Lake City with different office suite numbers, according to Katherine R. Hutt, director of communications for the Council of Better Business Bureaus.) In an email to CBS MoneyWatch, Critchfield also identified herself as the marketing chief for a company called Advanced Real Estate Education, which the BBB also said is linked to Premiere Mentoring.
Students who attend Yancey's gatherings get advice on how to "Pick the right type of investment" along with DVDs and a book titled "Flipping Your Way to Real Estate Profits." Yancey's website is full of glowing testimonials from satisfied customers, along with a video showing highlights of "Flipping Vegas."
The show, however, went off the air in 2014, although reruns are broadcast on A&E sister channel FYI. A spokesman for the cable channel said he had no contact information for Yancey. The entrepreneur didn't return voice-mail messages left at his office at Goliath Co. in Las Vegas.
Yancey's seminars are connected to a company called Affluence.edu, which has a D-minus rating by the Better Business Bureau for failing to address complaints from customers. Morse's gathering in Florida was run by Abundance.edu, a site that seems identical to Affluence.edu. A third entity called Yancey Events is the main website where the seminars are promoted. Yancey Events is rated C plus by the BBB for addressing complaints, with 20 complaints listed over the past three years.
The relationships between the various Yancey-related companies weren't immediately clear, and calls were not returned requesting comment.
The Yancey name remains a draw in the real estate world. When Morse and his wife Kim went to their free introductory seminar at a hotel conference room in Tampa, they couldn't wait to get started. They brushed aside complaints from some fellow attendees about the quality of the food or about the fact that Yancey and his wife Amie, his co-star on "Flipping Vegas," weren't there. Indeed, they soon shelled out money for both real estate training and a class on trading stock options.
"I honestly didn't expect to see the Yanceys at such a low-key event, though his name and face were plastered all over the place," Morse said, adding that many of the others in attendance "wanted to meet the superstars from TV."
Seminar leaders used high-pressure sales tactics designed to prey on their students' anxieties about their financial future, according to Morse's account. Speakers made "subliminal and not so subliminal messages about upping your credit," so that attendees could afford to sign up for additional training, he said. Other online reviews about the Yancey's seminars made similar complaints.
Yancey's seminar discussed several strategies for real estate investing, including wholesaling, which is when someone serves as a middleman bringing buyers and sellers together. Investors can make money by acquiring a property and quickly reselling it to another buyer at a profit.
Other flipping experts advocate the strategy. However, it requires a license in some states, a point that Morse said wasn't made in his seminar. That's a common error made by novices, according to James Wise, a real estate investor based in Parma, Ohio, who is critical of the flipping seminars. He sees people who make this mistake "pretty much on a daily basis."
"They hear all this stuff, and they think 'Hey anybody can become rich in real estate,'" Wise said. "They come out and try and transact business. Sellers are getting hung" out to dry. Another problem with the wholesaling strategy is that many people are trying to undertake it.
Despite his best efforts, Morse said he has yet to close a single real estate deal, though it's not for a lack of trying, including putting in 12- to 14-hour days. "We burned through at least three real estate agents" in a fruitless search for deals, he said.
He's hoping his luck will change. Morse says he plans to invest the money returned by the Yancey seminars back into real estate with individuals he considers to be reputable. "We never really got the coaching and mentoring to help us figure out what we needed to do next," he said.
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