Tarek & Christina’s Seminars Are a Scam
INVESTMENT PRO CHARGES: EXCLUSIVE INVESTIGATION In Touch goes inside the Flip or Flop stars’ real estate course and uncovers alarming new information
On a large screen in a hotel conference room, Tarek and Christina El Moussa addressed the audience in a pretaped video message. “We can’t be here today because of our busy film schedule,” Tarek said. “You are here absolutely at the right place and time. There has never been a better opportunity to invest in real estate than today. We are proof that this will work for you.” The stars of HGTV’S wildly popular home buying, selling and renovation series Flip or Flop had attracted approximately 130 people to a “free” seminar for their Success Path real estate investment training program on Nov. 5 at the Laguardia Plaza Hotel in East Elmhurst, N.Y. Tarek and Christina have drawn tens of thousands of people during the past three years with the lure of celebrity and the promise of wealth.
The only problem? Real estate professionals and angry fans charge that what Tarek and Christina are selling is a scam at worst, misleading at best. Two In Touch reporters went undercover and attended the Nov. 5 seminar and discovered troubling tactics that include questionable math, too-good-to-be-true guarantees and high-pressure sales methods urging attendees to sign up for a three-day retreat with a tuition of $5,997 — or a discounted rate of just $1,997 if they signed up that day. The price goes astronomically higher for more “advanced” houseflipping courses, including a course for more than $75,000 (discounted to $43,294)! A seminar leader also tried to lure attendees into a $4,997 membership in the Tax Liens Investment Buyers’ Club, an investment approach known for being so complicated and risky that even seasoned professionals steer clear of it. The “good news” for attendees — that day the membership was “discounted” to $1,597.
Paying students were also promised an exclusive list of properties that have been or are about to be foreclosed on. But these lists can be obtained for free online or at county courthouses. The program further promised to “align our students with our preferred lending group, which will grant funding access for real estate deals,” something experts say grossly misrepresents the loan type and cost. “The whole thing is a scam,” James Wise, real estate broker and co-founder of the Holton-wise Property Group in the Cleveland area, charges to In Touch. “They’re teaching a business plan that sounds appealing but it just won’t work. They’re giving false advice.”
Complaints about Tarek and Christina’s seminars are rampant. The Better Business Bureau has fielded complaints, and online investing and other sites are filled with angry comments from people who
attended the seminars. Grievances have been lodged against Zurixx, the Salt Lake City–based company that runs these seminars, which insists that most attendees are satisfied with the program.
But multiple seminar attendees felt cheated when In Touch went undercover. They told reporters that they were there after seeing an ad on Instagram inviting them to “join” Tarek and Christina that day. One guest said she “definitely” thought Tarek and Christina were going to show up, and muttered “damn it” after the video announced they wouldn’t be. When seminar leader Steve Wyman, who described himself as the couple’s business partner, was questioned by an undercover reporter about whether Tarek and Christina would be at the pricier future retreats, he criticized the couple. “The celebrities aren’t the best teachers,” he said.
So what exactly is he teaching in their name? For starters, Success Path promotes tax lien buy-ins. “They tell you there are these great suburban houses that cost $250,000 and the owner let it go into tax foreclosure and you can pick it up for their back taxes, which are $8,000. Well, that doesn’t happen,” explains Wise, who has attended and sent staffers to the free seminars to investigate. “The only properties that are available that you can pick up just for the back taxes are proper- ties in [ poor neighborhoods] scattered across the U. S. that usually have a net value of less than zero.”
The math just doesn’t add up. Steve, the seminar teacher on Nov. 5, claimed that Success Path students keep 100 percent of sales profit and their lending partners make 2 to 4 percent “of the amount that is loaned.” But that didn’t address the interest rate being charged. These type of loans — called hard-money loans — are short-term and very highinterest for flipping houses. “There is no way Christina and Tarek’s students are getting low-cost loans,” Wise says. Hard-money lenders, he adds, “are not giving out loans to people who couldn’t qualify for traditional loans, at prices that are half what traditional loans are, for properties and deals that are 10 times riskier. No way.” There’s also limited inventory of dirt-cheap properties these days compared to what was out there during the 2011 real estate crisis. “Now that property values have gone back up, [ banks] are charging a reasonable price for these properties. What the people running the seminars are giving you is pure fabrication.”
Success Path insists it’s helping its students, not harming them. “More than 50,000 people have attended our seminars over the past three years and there have been less than 20 complaints,” Tarek and Christina told In Touch in a statement. “People have gone on to change their lives and achieve their dreams using our models and strategy.” But many who’ve attended their seminars feel duped and have given bad reviews to Tarek and Christina. “Please do not fall into the same trap I did,” wrote one attendee. “Will never watch those scammers on HGTV ever again,” wrote a man who said he knew the program was not on the level when the presenter claimed they would loan up to $500,000 to seminar attendees “no matter what their income or credit ratings were.”
Wise believes the Flip or Flop couple are treading on dangerous ground. He tells In Touch, “Tarek and Christina El Moussa should be ashamed of themselves.” ◼