Lewis Hackney, a marketing expert and the founder and chief executive of Etch’d, has been vocal in calling out get-rich quick schemes touted by bogus ‘gurus’. He’s previously called for the property industry to be doing far more to self-regulate in order to prevent self-appointed ‘gurus’ peddling get-rich-quick property investment courses, promising to make participants millionaires overnight.
He insists much greater transparency is needed around their offerings and conduct, with more direct action from industry bodies and trade groups to eradicate ‘dangerous marketing practices’.
There is currently no regulation of property investment training courses and anyone can, in theory, run one without anybody checking their credentials first. It seems ripe for exploitation and manipulation, with courses often charging fees anywhere from £2,000 to £15,000 – typically upfront – for information and advice that is freely available online.
Many thousands of people have fallen victim to the empty promises offered by get-rich quick schemes, most tragically in the case of 37-year-old former soldier and army reservist Danny Butcher who committed suicide after he lost his £13,000 life savings on a property training course that had promised to make him ‘financially free’. Since his death, his family have launched a petition calling for effective regulation of the property investment training sector, which currently has over 5,500 signatures.
Last Friday, meanwhile, it was revealed that property guru Glenn Armstrong has been declared bankrupt.The man behind the Property Millionaire Academy, who has appeared on Channel 4’s The Secret Millionaire and How the Other Half Live, owes £4.9 million to dozens of creditors.
Armstrong has spent many years selling courses and home study programmes for people wanting to make money out of property. According to LandlordZone, he now has 21 days to appeal the decision and in the meantime his bank accounts have been frozen and an insolvency practitioner will go through his affairs. Some 38 creditors are listed in the court papers, with huge sums of up to £537,000 each being sought.
What’s more, Armstrong has 10 unpaid county court judgements against his related companies dating back to 2017. These total more than £566,000, in addition to 10 unpaid personal county court judgements standing at £418,342.
And it doesn’t end there, with journalist Chris Mitchell also reporting Armstrong to the CrimeStoppers Covid Fraud Hotline, which has now opened a file for investigating fraudulent Bounce Back loans. According to Mitchell, this is now the third time Armstrong has been declared bankrupt, following on from 1992 and 2006.
With the above in mind, what can would-be investors do to ensure they aren’t sucked in by bogus operators?
Below, Hackney outlines five things to look out for that might be possible red flags and make people think twice about parting with their hard-earned money.
1) A backstory that doesn’t add up. Usually it is: “I was broke, homeless and a down and out”. Lo and behold, within two or three years, they’ve become a millionaire. If that seems too unrealistic to be true, the (sob) story is probably almost entirely fabricated.
2) Claims that anybody can become an expert. The ‘gurus’ will say that there are absolutely no barriers to entry or requirements for you to start investing tomorrow. Often, the picture painted is one of being able to put your feet up as the money rolls in. These depictions really underestimate the task ahead – the hard work and grafting that is required in property investment. Claims that anybody can become an expert property investor no matter what their situation is, I’m afraid, very much oversimplifying things.
3) Promises of unbelievable returns. Unrealistic returns may be an obvious warning sign for many that something isn’t quite right, but with the combination of the first two (the backstory and the promise that anyone can become an expert), it becomes easier for victims to get roped in. I’ve seen some ridiculous returns promised before – as much as 10% return in a day.
4) The course itself. Let’s be honest: if you had discovered the secret to making unbelievable returns - returns that could make you rich beyond your wildest dreams - would you really be flogging that secret for £997 in a three-star hotel basement?
5) Overpromising and under-delivering. If you happen to have fallen for the initial sell, these courses will offer you the opportunity to walk away now. However, it is a natural human trait to chase losses; the gurus will then upsell more courses as a means of helping you recover initial losses and achieve even more ‘knowledge’.
Bonus warning sign: These courses will often come packaged up with a lot of “Insta-lifestyle” imagery – fast cars, expensive clothes and beautiful destinations. This catches the eye and is the start of the funnel, and subconsciously makes those living a normal 9-5 lifestyle in the grey, cold UK tempted. Don’t fall for it.
The likes of Property Hub, Property Tribes and the comment section of our very own sister publication Landlord Today can be a great antithesis to the idea of property investment as a get-rich quick avenue – offering an honest, warts-and-all insight into how the market works and how much graft is required to make a success of property investment.
The video below from Property Hub provides a good example of what is involved in a real-life property deal and you can check out a range of others – from buying your first buy-to-let investment to how to get started with property investment - on the firm's YouTube page.