A celebrity flipper who tells people they can make up to $60,000 per month buying foreclosed homes is bringing his tips to Tucson.
Armando Montelongo, a former host of the reality show "Flip This House" on the cable network A&E, has scheduled seminars by his team Tuesday, Wednesday and Thursday in Tucson. He may not attend personally; he has events scheduled in Phoenix the same day.
Montelongo makes bold statements in a video on his website: "Imagine being able to get you and your family out of debt and to be able to change the legacy of your family by becoming a real estate millionaire."
No credit and no cash?
No problem, there are new government bailout grants.
There's property for pennies on the dollar, the website says.
Promises of such high returns run counter to the experience of local real estate agents who have spent years building relationships with investors in the Tucson area.
They also raise red flags with the local chapter of the Better Business Bureau.
"We always caution against offers that promise returns for low risk. Basically it makes it sound like making a lot of money is easy," said Nick LaFleur, a spokesman for the Better Business Bureau of Southern Arizona.
Alan Murdock, a local Realtor with Tierra Antigua, said he has worked with investors on sprucing up and selling distressed properties. There's substantial risk involved, he said.
"I'm involved with flipping a lot of properties and it's never easy," Murdock said. "It can be profitable, but it's a lot of work."
Murdock said he's not familiar with Montelongo's method, but he's not aware of any programs - government or otherwise - that provide financial assistance to flippers.
A traditional lender isn't going to jump at financing a foreclosure, especially in today's tight credit market. Many of the cheapest foreclosures, those that can be bought for "pennies on the dollar," require a cash purchase because they're so run down banks won't finance them.
That means you - or someone you know - is going to need plenty of cash on hand to purchase and fix a distressed property.
Even if buyers do get the money to purchase torn-up homes and repair them, they still have to sell them. And that can be a challenge with property values still depressed and plenty of homes on the market.
Many investors now looking to cash in on the foreclosure market don't sell the homes right away. They sit on them or rent them out. All of these factors don't point to thousands of dollars rolling into bank accounts overnight.
Also, some of those who have attended Montelongo's free seminars didn't leave with any greater understanding of real estate, according to the BBB in Austin.
About 60 complaints against his Texas-based company, Armando Montelongo Worldwide Inc., have been reported to the BBB over the past three years, said spokeswoman Erin Dufner.
The company hasn't responded to 16 of the complaints, the BBB's website says, leading the bureau to give it an F rating. The company has issued refunds to some complainants, Dufner said.
In certain cases, consumers who attend a first, free seminar complained to the BBB that they didn't learn how to flip real estate, Dufner said. Rather, they were pitched another course that costs about $1,500 to attend.
People who showed up to the second course told the BBB they were then urged to attend an additional program that cost up to $25,000, Dufner said.
In a telephone interview Friday, Montelongo said the vast majority of those who attend his seminars leave satisfied. At first, he shares information about how to find motivated buyers and sellers and ways to get financing.
He said he's sharing techniques that carried him from being $50,000 in debt to a financially successful flipper of homes. "We absolutely teach people how to duplicate my system in today's market," he said.
As for the fees attached to his programs, Montelongo likened it to going through school. The public education system provides high school education free of cost to students, he said, but they're going to have to pay if they want their bachelor's or master's degrees.
He said he always makes it clear that making money in the real estate world isn't easy, and it's not for everyone.
"It starts with me telling people you're going to have to work hard at this. You're going to have to follow my system to a T."
Contact reporter Dale Quinn at firstname.lastname@example.org or 573-4197.