CLEVELAND - Some northeast Ohio leaders are flipping out about real estate seminars that promise to teach you to flip houses.
Than Merrill, one of the stars of the television show "Flip This House" on the cable network A&E and a co-founder of FortuneBuilders, is holding the 11 seminars taking place in northeast Ohio this week.
"It's a pyramid scheme," said Cleveland City Councilman Tony Brancatelli. Council members issued a warning to residents about the bills attached to foreclosed homes and risks of real estate seminars during its meeting Wednesday.
Summit County's Office of Consumer Affairs sent out an alert to its residents about the seminars last week, warning them to "be wary of 'get rich' quick real estate seminar deals."
NewsChannel5 investigators went undercover to check out one of the seminars. Merrill was not there
Instead, a man named Mike Kasper told close to 40 participants they can earn thousands of dollars by tracking down, fixing up and selling distressed and foreclosed homes around northeast Ohio.
At the end of the event, Kasper said you can learn more about how to make money flipping houses by paying $197 for a 3-day course.
After the seminar, most participants we spoke to were satisfied.
"The seminar was great. I got a lot of information," said Robert Coggins.
Richfield resident Matt Pierson was so impressed he decided to pay for the 3-day course. "More knowledge is power and I want to make a lot more money and be wealthy."
Brancatelli said the seminars are misleading its participants. He said it's nearly impossible to make money flipping a house in Cleveland. It's because the prices of the homes are low, but back taxes, assessments and other fees attached to the properties often add up to thousands of dollars.
Brancatelli was so concerned about the seminars he handed out information to participants outside FortuneBuilders' seminar in Warrensville Heights Wednesday afternoon.
"I just want to make sure when they come into town putting on their show and their carnival act that they know we are going to hold people responsible," he said.
"It's buyer beware to the tenth degree," said Frank Ford, the senior vice president of Neighborhood Progress Inc., a Cleveland-based community development group.
Like Brancatelli, Ford said it's impossible to get rich quickly from flipping northeast Ohio's foreclosed homes.
"They're like defective consumer products. They need to be taken off the market and they need to be put somewhere for safekeeping or demolished," he said.
Paul Esajian, co-founder and CFO of FortuneBuilders, sent NewsChannel5 this statement:
" FortuneBuilders values its reputation and works very hard at servicing our students. At FortuneBuilders, it is our mission to share with our students our learned principles of Residential Redevelopment to create real estate solutions for properties. Our company educates people on real estate investing strategies based on sound principles of residential redevelopment. In our training programs, we educate students on running a successful and ethical business. All of our teachings focus on legal strategies which put an emphasis on positive contribution to the communities they affect.
As such we do not guarantee results, and our promotional materials confirm that.
We would invite any individuals that have questions or concerns about our company, education, and services we offer to contact me directly firstname.lastname@example.org"
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