I Got Punk'd by Hilary Farr
A few weeks ago I ran across a curious headline, FTC Claims House Flipping Seminars Featuring HGTV Stars Are Total Scams.
No duh.
Okay, well, I know that now anyway. Let me explain. A few years ago, I saw an advertisement for the Hilary Farr’s Rules of Renovation presentation in our local events calendar, and since I’m always looking for good blog content, I signed up. The website, now replaced with a litigation notice, was plastered with photos of Hilary and the headline “Learn the Rules of Renovation.” It detailed her famous show on HGTV, “Love It or List It,” and her many years of staging and design experience. And it includes her blogs “5 Best Staging Tips” and “3 Upgrades That Are Worth Paying For.” I was all set to see a fun-snarky TV personality, learn a little more about design, and possibly snap a few photos for my social media. Instead, I was subjected to an hour of greasy used car salesmanship.
It started at the check-in table in an average hotel with larger than life-size posters of Hilary presiding. The helper checked me in and handed me a copy of the “Build Design Live” magazine. As I waited for the conference room to open I skimmed articles asking “Are You Ready to Renovate Your Life?,” “Are You Living the Life You Want?...Entrepreneurship Might Be For You,” and an inspirational story of blind Everest climber, Erik Weihenmayer, about the importance of having vision (yes, really). The articles were perfect for making anyone with doubts about starting a business feel inadequate. At this point I thought, “OK, Hilary’s going to do her HGTV design personality routine and there’ll be a sales pitch for peripheral products like business coaching or real estate education.” To be expected.
Then, the ringmaster of the event, straight outta “New Joisey” with shiny shoes and a three-piece-suit, gathered the crowd for announcements. There were about 50 chairs for 40 people, so he asked us to all fill in from the front to the back of the room, leaving no empty seats, so “people who come in late can find a spot.” Then, he outlined the agenda, dropping Hilary’s name several times, but not saying when she’d appear. Odd logistics for a presentation, but I’m a rule follower, so sure. Everyone filed in and, no joke, the rows of seats were actually cordoned off, so people were forced to sit as instructed.
We were cattle led to the slaughter. The pre-game huddle outside the doors, energetic name-dropping, and sitting shoulder to shoulder creates the impression the room is crowded, buzzing with activity, and makes it harder to get up and leave when the doubt creeps in. I sat in the front row where another ringmaster explained how “in the interest of being efficient and on time” we were to write down any questions during the presentation, to be answered at the end. This was actually to prevent anyone from publicly doubting the pitch.
Next, Terry Granahan, a good 20 years more haggard than his headshot, stepped up to the plate. He positioned himself as a salt of the earth midwesterner, while his bio on the screen vaguely spoke his 30+ years of qualifications with terms like “investor,” “trainer,” and “entrepreneur.”
If you’re so successful, why are you pitching to this sorry crowd?
He asked those all-engaging, can’t say no, participation questions, like “Who likes to make money?” and “Would you like to buy property with other people’s money?” A man to my left really got into it, answering every question Terry asked, out loud, for the whole 75 minutes.
A shill or a sucker?
Terry laid the groundwork saying they’re looking for a small group of people (scarcity creates urgency), in their spare time (so easy!) to use confidential bank lists (exclusivity and access) and Hilary Farr’s system (star power), called the Tax Lien Buyer’s Club (all the knowledge you need), to write contracts for pre-foreclosure homes and use other people’s money to buy them (plentiful opportunity and wealth). The office would review the contracts, correct any mistakes, and submit them to the investors. There was no mention of how many contracts actually turned into deals or why a homeowner would sell pre-market. And remember, questions were to be submitted in writing and answered at the end.
If the properties were acceptable, they would be sold, either wholesale (“Buy low, sell what? High? NO! SELL LOW!), at a mid-range price, or after renovation. The company would decide which route to take, with much higher profits for renovation, but quicker cash selling wholesale. Terry put up numbers showing possible profits of each method and the commission breakdown, baiting the audience with quick money in the wholesale scenario, then convincing us to aspire to more by showing the potential profits from renovation. Now, with dollar signs reflecting in our eyes, he pulled a “take away” strategy, encouraging us to start slowly using the low dollar deals as practice, since renovations are more complicated.
Then the conversation took an even more curious turn. Terry pointed out we did not need good credit when we were using other people’s money to buy homes and make a profit. He showed an alarming statistic about most people being unable to cope with even a $500 unexpected expense, which served to normalize a portion of the audience in the same situation, or made people with more than $500 spare dollars feel confident. He mentioned trainees would fill out a form detailing their debts and the trainers would work with us on a debt elimination program, so we could find “financial freedom” through this program. Wait, what?
And, oh yes, some people will want to use their own money to keep EVEN MORE profits in their pockets. Of course you can. The only thing that will limit you is your “belief” in the program. Well, now we’ve gone Kool-Aid cult.
Then came the ringmaster back to give the nitty-gritty about the product. The training will start “soon,” seats will be “limited,” and someone in this room “not gonna say who” had called earlier wanting to skip the presentation and just sign up for the $5900 training program. And here’s where we went full-on Glengarry Glen Ross, launching the “Something for Nothing Close”. For today, for the people sitting in this room, this remarkable training program would be offered at just $1997…(insert dramatic pause)....and, anyone who signs up today can invite a guest….(another dramatic pause)...for free…
Next, he launched into the “Yes Man Close”. Raise your hand if you want to make money! Yes! Raise your hand if you want to use other people’s money to do it! Yes! In fact, stand up if that sounds good to you! Yes! Stand up and walk straight to the back of the room where Terry will be waiting to sign you up for training! Yes! So, I did. I stood up and walked straight out the door. On my way out I passed a woman and said,
“Well, I guess Hilary’s not coming.”
She said, “English is my second language. I thought maybe I misunderstood.”
“No, it was tricky.”
At home I went back to the website to figure out where I went wrong. There, near the bottom of the page, below the sign-up section and in smaller text was the statement, “While Hilary is unable to personally attend all events, she is proud to partner with a team of experts who teach rules of renovation strategies on her behalf.”
And after reading the recent HousingWire article, it could have been a lot worse. Undoubtedly a few people who stayed in that room and said YES! signed up, paid the $1997, and continued on to the next stage of the game which involves buying thousands more dollars worth (well, probably not worth) of training, and taking on additional credit card debt to do so, yet never profiting from renovation.
If you’ve been a victim of one of these scams, you can read the full complaint against Zurixx here.