However, some consumers who enrolled in the coaching program told BBB they received no services after making large upfront payments. Some also told BBB that following Rich In Five’s investment program resulted in losses in the hundreds of thousands.
Rich In Five principal Jason Schubert offers a coaching program which claims to help people learn to invest in hotels. According to consumers BBB spoke to, coaching can cost between $25,000 and $45,000. Consumers told BBB that under the coaching arrangement they were told Rich In Five would help find hotels to invest in and help them obtain financing.
Some have told BBB that they lost their investments after Rich In Five took over management of the hotels they were investing in. Consumers said the hotels were taken back by the original owners when Rich In Five failed to make payments.
The website, www.richinfive.com describes Schubert as a “builder, national real estate speaker, entrepreneur, commercial real estate mentor and coach, hotelier and master of buying properties with none of your own money and deal structuring.”
The website includes a link from a webinar and testimonials from people who reportedly found success through Schubert’s coaching program, including one who it says now has a hotel with cash flow in the “thousands of dollars.”
That wasn’t the case for consumers who spoke to Better Business Bureau serving Central, Coastal, Southwest Texas and the Permian Basin. BBB has received complaints about the business claiming losses ranging from $7,000 to more than $45,000 from the Rich In Five coaching program. A BBB investigator contacted consumers who filed complaints against the business, as well as other consumers who worked within the program and was told of additional individual investments totaling between $250,000 and $600,000.
Rich In Five’s website has earnings statements, including “Except at the end of the day instead of only making an average of $200 a month in positive cash flow, you end up making between $5,000 – $15,000 or more a month in positive cash flow!”
BBB sent a letter to Rich In Five’s address at P.O. Box 2007 as well as Schubert’s email address requesting that Rich In Five include a clear and prominent disclaimer about the limitations or conditions related to potential results or provide recent objective data to show that the majority of consumers using the service will attain results described on the site.
Rich In Five principal Jason Schubert did not respond to the letter, but stated on Nov. 18 that he would respond to complaints “right after Thanksgiving” and on Dec. 11 that he would respond to BBB complaints “by next week.” As of Dec. 29, 2014, the company has not yet responded.
Paula Fair of Arlington, Texas says she and her husband Bryan lost close to $250,000. That includes $44,900 for the coaching program and $200,000 invested in failed hotel purchases. She said the money for the investments was raised by cashing in two IRAs.
“In August 2010, we paid $44,900 for the Rich In Five mentoring program,” Fair said. “In April 2011, we took $100,000 out of an IRA to invest in a hotel in West Memphis, Arkansas. In May 2011, we took $100,000 out of another IRA to invest in a hotel in Baton Rouge, Louisiana.”
Fair said the West Memphis deal fell through when Schubert took over management and then stopped making payments to the original owners. “Sept. 12, 2012 was the last lease payment he made,” she said. “In April 2014, the West Memphis hotel went back to the previous owner.”
She said the Baton Rouge deal fell through for reasons that aren’t clear. “[Jason Schubert] claims two students negotiated with the prior owner behind his back to buy it,” she said.
Hugh Walker of Spring, Texas says he paid $44,900 to get into Jason Schubert’s coaching program, but that the business never found hotels for him to invest in and failed to honor other parts of his contract. He says he got some of his money refunded, but is still owed $12,900.
“Almost immediately I saw that he wasn’t doing what he said he would do,” Walker said. “He seemed unorganized. He was supposed to find us hotels to invest in. He kept promising he would change and improve. I found a hotel I was interested in, but he was so slow in reacting. By the time I put together a letter of intent, the owner changed his mind and was not interested in selling.”
Cory Wilkinson of Oklahoma City says he paid $20,000 to enter Schubert’s coaching program, then invested in a hotel—which he says he lost after Schubert took over management and failed to make lease payments. He says he lost over $250,000 total. “I did buy a hotel. I let him come in and manage it. After nine months, he bankrupted the hotel and it got taken back by the owner. He was managing member of my LLC. He was responsible for taking care of business.”
Consumers who want to invest should consider the following advice from BBB:
- Beware of making required, large upfront investments. One of the most common complaints BBB receives about investment opportunities is when consumers pay fees and do not receive the promised income.
- Beware of “high return for low risk” promises. Every real estate venture and financial investment comes with a level of risk. If a seminar offers a plan claiming large returns with little or no risk, beware, even if it comes with the promise of a money-back guarantee.
- The use of high pressure sales tactics. Seminar leaders often try to get consumers to sign up immediately. They may claim there are only a few spots left or that you need to get in on the ground floor today to see the largest earnings.
- Do your research. Before signing up for any investment program, research the company thoroughly. Check the BBB Business Review at www.bbb.org.