Recent news articles on Trump University and Legacy (formerly Tigrent) have brought up the question of the value of ultra-expensive real estate “personal coaching”, which can sometimes run the student $25,000 to $100,000. To any outsider, this would seem like an absurd amount. We agree. But if this is way too high, then what amount is fair?
A great real estate class should be worth every bit as much as a similar class at Harvard University
A single three-unit course at Harvard University runs around $5,000. That’s the number that we feel is the maximum that should be charged. And Harvard’s rate is in-line with most top-tier private colleges. Millions of Americans have established this as the going market rate over years of college attendance.
A great real estate class should be taught by someone who has been successful – not some academic
Real estate is a trade. It’s a business class. It’s based on real-life practice. As a result, the best teacher would not be an academic who has no greater experience than just thoughts and ideas. Most law school instructors are assumed to have spent at least some time in private practice in the courtroom.
A great real estate class should be strong enough that you don’t need personal coaching
Can you imagine a competent college telling its graduates “now that regular classes are over and you’ve graduated, you’ll need to pay us another $25,000 per year to put into practice the theories we taught you”? The sign of a great class should be that you have all the material you need to go forward, not just an appetizer for the main course.
A great real estate class should pay for itself many times over
Of course, the true hallmark of a great real estate class should be that the students buy real estate properly and profit from it. They should have learned the correct way to identify, evaluate, negotiate, perform due diligence on, re-negotiate, finance, and operate, and should have all the tools they need to succeed. They should leave ready to buy deals immediately, and to make money with them. Except in those cases where the student puts out no effort, it should be an insult to the college if the student does not succeed.
The correct pricing of a real estate class is no mystery. It’s already been established by the traditional college class cost metric. That being said, it’s insulting to believe that $25,000+ in personal coaching is reasonable. That money should be used for the down payment on a property, which is the whole point of the class to begin with.