John T. Reed’s views of various real-estate-investment gurus
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[where do I begin?]
Here is an alphabetical list of famous real estate investment gurus and seminar organizations along with information about them which investors may find of interest. Where I have a relevant product, it is mentioned and linked to the appropriate page. The Federal Trade Commission has a similar page although they are reluctant to name names, but they do identify red flags to watch for at FTC.gov.
- Real Estate B.S. Artist Detection checklist
- John T. Reed on real-estate-investment information
- Who this page is for
- A few observations to make after ten years of reader feedback
- Why I created and maintain this page
- Real Estate Book Reviews by John T. Reed
By clicking on the guru in question, you can move quickly to the entry in question. When I got into real estate in 1967, there would only have been about ten gurus, all book authors, and all recommended. The all-recommended status continued until Nothing Down author Robert Allen came on the scene in 1979. Ever since, there has been an endless parade of B.S. artists coming into the real-estate-investment-advice field. It is an embarrassment to the good people in the business.
If you want me to rate a guru, your best chance is to send me something he or she has written. I will not return it and I cannot guarantee to rate the guru.
Here is a link to three emails I received. The first guy refused to give me his name, so I changed the names of the gurus he mentioned. But some of the things he says I heard from other sources. Guru John Beck then saw it and confirmed it so I added his version of the story, which has the actual names of the gurus.
Table Key:
- I recommend
- No strong stance
- I do not recommend
Robert J. Abalos
I read his book on Investing in Land and generally liked it a lot. Here is the review I wrote. Abalos told me on 4/1/08 that he no longer sells the book but you may be able to get it on eBay or elsewhere. See the entry below regarding Bill Bronchick for mention of a lawsuit by Abalos against Bronchick.
John Adams—Unknown
Use my Real Estate B.S. Artist Detection Checklist to evaluate this guru.
John Alexander
Ridiculous prices ($5,000) and numerous too-good-to-be-true promises. F'get about it.
Robert G. Allen (San Diego, CA)
Author of best-selling books Nothing Down, Creating Wealth, and The Challenge. One-time seminar guru and founder of many Robert Allen Nothing Down clubs around the U.S. Allen’s advice is generally terrible. Although I did like a chapter he wrote on property-wanted ads. Otherwise, he is little more than a financial publicity stunt man.
My book How to Buy Real Estate for Little or No Money Down photographically reproduces documents from his famous “Send me to any city” nothing-down deals. The L.A. Times accepted his “challenge” and made him do them in San Francisco which is near where I live. I went there and got all the documents on each of the seven deals. Some were also done in the county where I live.
On one, which was apparently typical, the documents seem to show that Allen lied to the first-mortgage lender—Bank of America—about whether there was any secondary financing (there was—a seller mortgage) and about his intention to occupy the San Francisco condo as his principal residence (He lived in Provo, UT at the time and never occupied the SF unit). At that time, June, 1981, when home mortgage interest rates were at 18%, Bank of America would only make loans to owner occupants and prohibited all secondary financing. I have their loan policy for the date in question in the book, too. My wife was a loan officer for Bank of America at the time. [Note to bogus gurus: do not brag about deals that you do not want me to look into—especially in the San Francisco area. John T. Reed].
At best, you would have negative cash flow following his books. At worst, you would go bankrupt and wind up in jail. He doesn’t put it this way, but his nothing-down techniques almost all require you to mislead an institutional lender or take advantage of an unsophisticated seller or both. The president of his Atlanta Robert Allen Nothing Down Club literally went to federal prison (at Eglin AFB, FL) for doing illegal nothing-down deals. There is virtually nothing in his material about how to make a profit. Rather he simply assumes that real estate goes up so much every year that you need only buy it to cash in. Click here for a little story about his association with probate guru Jim Banks.
Allen himself got into financial difficulty with the IRS as early as 1984. In 1986, IRS filed a $346,395.79 lien against Allen. In September of 1987, when I wrote an article exposing his financial difficulties, he also had:
- another $65,649.90 IRS lien
- more than $76,000 of delinquent tax warrants filed by the State of Utah
- lawsuits and judgments regarding over $100,000 in unpaid fees to fellow gurus who spoke at his meetings
Allen declared Chapter 7 (total liquidation used when the bankrupt has a negative net worth) bankruptcy in San Diego on July 10, 1996 (Bankruptcy Petition #96-09323-LA). Bankruptcy creditors sometimes get pennies or nickels on the dollar. According toAllen’s bankruptcy papers, his creditors got nothing. The Initial Meeting of Creditors was held on August 9, 1996. A lawyer tells me that Allen would have been asked quesitons under oath about his assets during that meeting. A copy of the transcript of that meeting would be interesting. It would typically be in the case folder. See my 8/96 article.
The Allen’s attorney, Richard V. Vermazen, got $2,000 to handle their bankruptcy according to court papers. The Allen’s were discharged from their debts on 10/17/96. The case was closed with no distribution to the creditors on 10/31/96.
The creditors who were stiffed in the bankruptcy file were:
- American Express Optima Card
- Bank of New York
- Citibank Visa
- Farmers InsuranceGroup (San Diego)
- Ferrette & Slater ALLC (San Diego)
- Franchise Tax Board (California income tax)
- Internal Revenue Service
- John Graff (Highland, UT)
- Mark IV Properties (San Diego)
- McKay, Burton, Thurman (Salt Lake City)
- Neiman Marcus
- Nordstrom
- Robinson-May
- Saks
- Scalley & Reading APC (Salt Lake City)
- Scott Meredith Agency (New York city)
- Shirl and Gail Loveless (Provo, UT)
- Simon & Schuster (New York City)
- The Broadway (Phoenix)
The Allens may have had other creditors. These were the only ones listed in the bankruptcy court files. Now that Allen is running full-page ads touting his financial skills in theTwenty-First Century, one wonders if he has gone back and paid these creditors like his fellow Provo guru Howard Ruff did after his post-bankruptcy financial rebirth. No one has contacted me to say that he did pay off the creditors he stiffed in the bankruptcy.
In what must have been a weak moment when I was interviewing him for the ’87 article, Allen told me I, “do a great job and that I keep guys like him honest.” I have it on tape (with his knowledge and permission). I won’t take credit for keeping him honest—or give anyone else credit for doing that.
I think Allen has an interesting story to tell. But it’s not the one he sells. He should speak about real estate investment the way a reformed alcoholic speaks about drinking. For cheaper, accurate information on real estate finance, see my books on How to Use Leverage to Maximize Your Real Estate Investment Return and my newsletter articles on finance.
Later, he was sending out an e-mail soliciting customers for a business opportunity that has “nothing to do with real estate.” As far as I’m concerned, nothing he has ever done had anything to do with real estate. It was merely about making Bob Allen rich and famous. I am told that his former associate Marc Stephen Garrison once had a private conversation with Allen that went something like this.
Garrison: “I m concerned that our students are not using the real estate investment information we’re teaching them after the course is over.”
Allen: (wearily) “We’re not in the real estate investmet information business, Marc. This is show business.”
If you paid thousands of dollars for one or more of Allen’s courses, I hope you enjoyed the “show.” Although I suspect you could have gotten more entertainment at the hottest play or musical on Broadway for a lot less.
Click here to read an email from one of his seminar graduates.
On 9/4/02, a reader told me Allen was back to 65% real estate in his current seminar.
I also heard that Allen was telling people his bankruptcy was caused by an avalanche that destroyed an expensive home he and his wife were building. He tried to pawn that story off on me, too. Here are the details as I recall them. The avalanche occurred around February. But the IRS and the State of Utah had filed liens against him for non-payment of taxes months before the avalanche. Furthermore, I interviewed him by phone about all this and recorded the conversation with his approval.
I asked him what kind of real estate genius, as he was claiming to be at the time, would fail to insure his home. He said he did have insurance against the avalanche. “Did you file a claim?” “Yes.” “Did the insurance company pay it?” “Yes.” “So how did the avalanche cause your financial difficulties if it was fully insured?” He then mumbled something about a deductible. Gimme a break. At the time, he was claiming to be a multi-millionaire. Millionaires are not bankrupted by the deductible on their homeowners insurance. Plus there is still the pesky fact that he was in financial difficulty before the avalanche ever happened. And then there is the question of why he was building a mansion in the mountains when he was not paying his state and federal taxes like the rest of us.
Rich Arzaga, San Ramon, CA
Teaches a 10-night course at University of California, Santa Cruz extension in Cupertino, CA on real estate investment. For information, call Rich at 925-735-2600.
Jim Banks
Probate speaker. I heard his free come-on speech. I talked to him afterward. He struck me as a first-class jerk—gratuitously hostile and belligerent. I do not recall ever discussing him with anyone who disagreed with that assessment or who valued his probate advice. I do not recommend him. I recommend Gary DiGrazia's probate book instead. Also, there is a chapter on probate in my How to Buy Real Estate for at Least 20% Below Market Value.
A visitor to this Web site sent me the following: "I had found a 6-tape seminar by J.G. Banks entitled "Treasure Hunting Probate Real Estate" for $1.98 in a Sacramento thrift shop and it piqued my interest, particularly when he talks about $20,000 to $40,000 profit per deal. Jim Banks is not a polished speaker and he didn't use a quality tape production company. There were two copies of tape 6 in the package, one of them labeled as tape 2. I don't know why the original purchaser in 1987, at $317.70 (the VISA receipt was still in the package), didn't get it replaced."
Click here for a humorous anecdote about Banks having to remove pages criticizing Robert Allen from Banks' Treasure Hunting book after Banks started appearing at Allen events.
A recent caller said Banks is now charging $6,000 for his seminar. Lord, that's a lot of money! This caller said there were two phone numbers of satisfied customers in Banks' free presentation. My caller called both and found they were both "no longer in service." He asked Banks for the names and phone numbers of other satisfied customers and Banks flatly refused to give him any. If you want names of my satisfied customers, along with cities, states, and, in many cases, e-mail links, see the reader comments listed under my various book titles and my newsletter.
Len Barry
Yet another flim-flam medicine-show guru selling "Elixir of Real Estate Investment." 98% salesmanship and 2% real estate knowledge, only half of which is valid.
John Beck—I do not recommend his TV infomercial tax lien products or services
I love John the person, the writer, and the speaker. However, I have received an unacceptable number of complaints and nothing but complaints about Genesis Media Group, Inc. or Family Products, LLC or whatever. The company that sells the Free and Clear program through the infomercial and a “mentoring” or coaching program in which John trained the mentors, provides material that the mentors and mentorees use, and is on call to to help them.
In the past, I relied heavily on John for his expertise on real estate investment. His 1970s and 1980s books, newsletters, and speeches were excellent. However, there is no longer a lot of reason to mention them because they are now unavalaible and were written years ago.
In the Twenty-First Century, he has gone the TV-infomercial-out-of-Utah route. There is not now and never has been a worthwhile Utah-based TV infomercial product. In fact, there are few, if any, worthwhile infommercial products from anywhere with the possible exception of record collections. I have tried to disusuade John from the Utah approach. I presume his other friends have as well. To no avail.
Here is an item I published in my newsletter, Real Estate Investor’s Monthly in January of 2002:
John Beck’s ‘Free and clear’ infomercial
I had long heard of John Beck’s infomercial for his “Free and clear” course on investing in tax-lien certificates, but I had never seen it—until recently. John is a long-time real-estate investor and guru. He is also a lawyer and a friend of mine. My articles and books have often featured John’s adventures and opinions.
I was channel surfing around 12:15 AM recently when I heard the name “John Beck.” It was freaky. We tend to regard TV as another world. But when they kept saying John Beck and writing his name on the screen, I thought, “Hey, I know him! He’s a real person, not a TV character!”
The infomercial features a young man and woman who finish each other’s breathless sentences about how wonderful John’s course is. They are as energized and enthused as only TV pitchmen can be.
From time to time, the scene changes to some guy interviewing John. But it was not the John I know. He is rumpled, low-key, laid back, thoughtful, slow to speak—sort of an intellectual Jimmy Stewart without the stuttering.
What I saw on TV was what I would expect if you gave him a dress-for-success makeover, made him double-park his car in downtown San Francisco, and had him drink diuretics for three hours without letting him go to the bathroom. He seemed to be sitting on the front of his chair and almost shouting his lines with a tremendous sense of urgency. The guy who interviewed him behaved the same.
Apparently the producers of the infomercial, Genesis Media, have found through focus-group research or something, that the way to market a book on investing in tax-lien certificates is to say over and over how cheap such purchases are—often under $1,000 in the examples in the infomercial—and that those who buy such houses have no mortgage or mortgage payments. I am not sure they ever mentioned the phrase tax-lien certificates. It was cheap, free and clear, cheap, free and clear, cheap, etc.
One bit of John’s influence was apparent. The commercial was honest. John repeatedly held up color photos of houses and stated the price at which they sold via delinquent-property-tax procedures. If John says it, it’s true.
There were testimonials, but they, too, were honest as far as I could tell. For one thing, they claimed far less success than the outlandish nonsense you hear on other real-estate infomercials.
The testimonial givers were not identified, but one was Ron Starr, an investor and guru who has co-authored books with John and who has often been featured in my books and newsletter. Somehow, they made Ron look ten years younger in the infomercial—which I guess is not surprising after they made John look like an investment banker.
The infomercial appeared to have been part John insisting that it be honest and part Genesis insisting that everyone act like carnival barkers. From the emails I have received, the problem arises after you buy the $39.95 course, then start receiving calls from boiler-room salesmen who pressure you into buying far more expensive services.
I pass the complaining emails I get along to John and he seems to win most of them over when he contacts them. [2005 note: This is no longer the case.] I surmise that he is also asking Genesis to behave in such a way that fewer complaints are generated. I have never seen the $39.95 course. I love John; have no use for Genesis.
I was asked to do an infomercial about an exchanging course many years ago. I refused in part because I felt the infomercial format had been used almost universally by sleazeballs. Although it would theoretically be possible to do an honest infomercial, the mere fact that I was using that medium would make me look like a sleazeball.
I said I might do it if I could make it look totally different, but when I described some ways I would want to do that, the producer rejected them out of hand. The only way they would do it was a fake talk show format. The only identification that it was a commercial that they would allow was a fine-print written disclaimer at the beginning and end of the half hour. No way, I said.
After years of recommending John’s pre-infomercial stuff, I must now reluctantly categorize him as a “do not recommend.” I do not recall ever having done that before with any guru. It is rare for someone to change his stripes so late in life. If anyone knows how to bring back the old John Beck, I would support the effort strongly.
Ed Beckley
Moved to Iowa to be near Mahareshi Yogi transcendental meditation. Shut down by attorney general for not paying refunds. The Wisconsin state Bureau of Consumer Protection published a Guide for Wisconsin TV stations which lists several "Questionable infomercials," among them those of Ed Beckley's Home Business Technologies. See also David Martin's letter.
John Behle (Salt Lake City)
Here is an item I posted on Behle on 4/16/99:
"Behle once tried to rent my mailing list. I refused to let him because I thought the advertising piece he wanted to send was misleading. It was made to look like a newspaper article and had a post-it note on it that looked like it came from a friend. It was signed "John B." I had received the same piece myself previously and called my friend John Beck to ask if he had sent it. That's when I first heard of John Behle."Behle responded (4/17/99):
My (John T. Reed's) response (4/17/99) to John Behle’s email:“Stabbed! - The latest victim
I had been so thrilled to stay off John T. Reed's hit list. He doesn't have a competing book about paper, so I thought I might be safe. Apparently someone inquired and now his faulty memory and facts have colored me too. It's not a big deal, just not true. I left a message on his voice mail which since it wasn't ‘worshipful’ will probably lead to further attacks. I guess I knew it was just a matter of time. Here's the scoop - I mean poop.
I’ve never tried to rent John's list. He has nothing to do with paper and wouldn’t be an interesting list for me anyway. The only list I've ever rented in my life is Creative Real Estate Magazine (a couple times).
I doubt John cares about facts, but the letter/ad he is referring to was developed and marketed by a company named Unicorp or Millionaire Consulting Service. They marketed a consulting service for Bob Allen and Mark Haroldsen.
I sued them and won over the fact that they used their infamous “John B” letter as they called it. Nothing in the letter ever mentioned me or referred to me, yet in a marketing script that we uncovered it mentioned that if they thought it was a friend or relative that had sent it to not disagree with that. If they were upset or enquired (sic) as to who sent it, the marketer was told to say that it came from John Behle in their marketing department. I never had anything to do with their marketing department. For a few months I helped out in doing some training for their consulting staff and handling the most difficult consulting situations.
I sued them because many people did assume the letter came from me. At that time about 100,000 people per month had been reading the magazine articles I wrote for many different publications and my name was the first to come to many people's minds. They mailed out tens of thousands of these ads per week and just about anyone with the name “John B” paid the price. Chuck Abbot, Doug Holmes and Richard Allen that developed the ad said that they chose that name because almost anyone knew a "John B". I sued for $750,000 in damages and because they didn't have a leg to stand on, they settled. I just wanted an apology, the cessation of any use of my name and just to rub Doug's nose in it a little, I received rights to use his mailing list (total junk), the Unicorp mailing list and had him sign a letter to clear up falsehoods that they had spread among their employees. I'm not a real vindictive person, so I didn't mail the letter. I guess I should have. Anybody want a 10 year old 30,000 name mailing list from a consulting service?
Once again, John T. Reed’s facts are messed up. Hopefully he will show his intentions are honorable and clear it up. What do you wanna bet?
JOHN T. REED - I DO NOT RECOMMEND HIS RECOMMENDATIONS
From what I’ve heard, his books are very worthwhile reading, his opinions of others in many cases are flawed.”
I stand corrected. I was wrong. My apologies to John.
Gary Belsky and Thomas Gilovich
Click here to read my review of their book, Why Smart People Make Big Money Mistakes.
Steve Bergsman
Here is a review of his book Maverick Real Estate Investing
Robert A. Blair, President of National Home Buyers Training Corporation
I am told they charge thousands of dollars for seminars. See my article on expensive seminars.
Sonny Bloch (deceased)
Radio and book guru. Sent to prison for income-tax evasion. Died in 1998.
Bill Bowen—Unknown
I recommend that you use my Real Estate B.S. Artist Detection Checklist to evaluate this guru.
Scott Britton—University of Real Estate Letter
According to a promotional mailing I received, he sells a video in which you learn how to "make $10,000 in 98 days." $10,000 divided by 98 = $102.04 per day or $102.04 divided by eight hours = $12.76 per hour. According to my local want ads, you can make that much in jobs like the following: driver, chauffeur, customer service, child care site supervisor, carpet cleaner. Britton's way of making the $12.76 a hour is rehabbing buildings that you must buy, rehab, then sell to get your money. There is far less risk and effort in a customer-service job.
Bill Bronchick
I disagree with him on due-on-sale clauses. See my article on the subject. I also reviewed a book he co-authored on flipping.
Here is an item that relates to Bronchick from my 6/07 Real Estate Investor’s Monthly newsletter.
Abalos v. Bronchick
For years, I have been receiving communications that denounced Investing in Land author Robert Abalos, whose book I review favorably at my Web site guru rating page. Also, various things have been posted on the Internet denouncing him and denouncing me for refusing to denounce Abalos. Other gurus have received the same stuff and some turned against Abalos as a result. Bill Mencarow of www.papersourceonline.com and I did not.
The communications I received seemed part of an odd, orchestrated campaign rather than spontaneous communications from independent individuals, although they had the names of various seemingly obscure persons on them. I said so years ago at my Web site.
A month or two ago, I received a snail-mailed envelope with no return address. Inside was a credit report on Robert Abalos and nothing else. The person or entity that ordered the credit report was redacted.
I did not read the credit report, but I thought it was illegal for it to have been ordered for the purpose of injuring Abalos and equally improper for it to be sent to me and others. I sent Abalos an email about it asking if he wanted me to mail it to him. He did.
Abalos contacted the credit bureau in question. Although the entity ordering it had been redacted, the company was easily able to tell Abalos who ordered it from the date and time, which had not been redacted.
As a direct result of the credit report, Abalos, who is a lawyer, tells me he has now filed federal suit number 2:2007cv00844 on June 4, 2007 in Washington Western U.S. District Court (Seattle), Honorable Robert S. Lasnik presiding. The name of the suit is Robert J Abalos versus William Bronchick and Flamingo West Ltd.
William Bronchick is a well-known real estate guru and is himself a lawyer. You can see information about the suit at http://dockets.justia.com/docket/court-wawdce/case_no-2:2007cv00844/case_id-144087/. The cause of action is violation of the federal Fair Credit Reporting Act (15 USC 1681).
If you want more details about the dispute, I refer you to the U.S. District Court files on this case and to the parties to the suit.
Bronchick sent me an email on 7/18/07, but asked me not to publish it. In it he says he did not send me the credit report he obtained and does not know who did. He also said he had a legal reason for ordering it, refused to say what it was, and invited me to guess what it was. He said that as of 7/18/07 he had not been served with the suit summons in spite of Abalos knowing where to serve him.
Bronchick was reportedly served on 8/2/07. Abalos says he was awarded a default judgment against Bronchick in 2007 or early 2008. Bronchick says the default judgment against him was vacated and that he won a defamation judgment against Abalos. Abalos says the preceding sentence is inaccurate.
Fun couple.
On 4/8/08, Bronchick sent me an email containing a “findings of fact and conclusions of law” against Abalos in Arapahoe County Court in Colorado that found Abalos made false allegations that Bronchick violated the Fair Credit Reporting Act and other criminal laws. (Case No. 07CV1463 Div. 202) Note that this is different from the federal court in which Abalos filed his suit against Bronchick. The Colorado court said it made these findings of fact based upon “the testimony of William Bronchick and documentary evidence presented...” No mention was made of any testimony or evidence from Abalos. The Colorado court said that Bronchick suffered noneconomic damages of $20,000.
Albert Brown, Jr.(Southern CA)—Unknown
I recommend that you use my Real Estate B.S. Artist Detection Checklist to evaluate this guru. A visitor to this site said he was a good guy with reasonable prices and ethical, practical advice.
Louis Brown—I do not recommend
Bob Bruss died 9/26/07
Nationally syndicated real estate columnist, author of occasional books, publisher of California Real Estate Law newsletter and a national real estate advice newsletter. Solid investor with a law degree and extensive experience. He and I did not agree on everything, but I recommend his books, newsletter, and column without hesitation.
You can still buy his stuff after his death. Three things he said, and his material will still say, that I disagree with are:
• He repeatedly recommended the book Nothing Down. Not a single technique in that book is ethical and legal. They all require either deceiving an institutional lender or taking advantage of an unsophisticated seller or both.
• He urged use of single-family lease options which, in most cases, works by bamboozling would-be howmeowners into paying large extra rent and front money for a home-purchase route that rarely results in homeownership and leaves the would-be homeowners far worse off. Bruss himself did not appear to do that to people but he said little about the distinction between doing it in a way that actually results in home ownership most of the time versus just using it to enrich the lanldord and leave the would-be homeowner out in the cold.
• In one of his weekly Q&A columns. he said it was OK to fudge the truth on a mortgage application. No it’s not. It’s a federal felony as well as immoral.
In general, however, his writing are rock solid.
Larry Burkett died 7/4/03
Author of Business By The Book, The Complete Guide of Biblical Principles for the Workplace and Using Your Money Wisely, Biblical Principles Under Scrutiny. Many people believe the Bible is the word of God. It turns out, there is considerable discussion of financial matters in the Bible. Larry Burkett is a sort of combination Bible fan and personal finance/business guru. His books give his interpretation of what the Bible says about various financial issues.
I do not disclose my religious beliefs. Nor do I tell other people what religion they should join. I leave that to people like Robert “Did I tell you I was a missionary” Allen. (A missionary is someone who tells you that you are in the wrong religion, he is in the right one, and that you should switch to his. That’s Part I. In Part II, he tells you that you must send 10% or some such of your income to his religion’s headquarters for the rest of your life if you buy Part I.)
Having said that, however, I must add that I welcome ethical analysis of the various approaches to real-estate investment. There is far too little ethical discussion in the real estate business. Whether the Bible is THE Good Book is something for you to decide. However, I do not think there is any question that it is A good book in many respects as far as ethics are concerned.
The code of ethics I recommend is
- Tell the truth
- Keep your promises
- Treat others the way you want to be treated
Also, in real-estate transactions, I believe you are not ethical unless you require that persons with whom you do deals meet appropriate suitability standards. Almost no one does and most of the nothing-down and lease-option approaches now being pushed by various gurus fail those ethical standards. My Real Estate B.S. Artist Detection Checklist also offers detailed ethical standards for real-estate gurus.
In short, while I may not agree with every point Burkett makes, in general, most investors would benefit from study of the ethical implications of various real estate and business techniques whether it be based on the Bible, the Koran, or other popular religious or secular teachings.
John Burley (Glendale, AZ)—Unknown
I recommend that you use my Real Estate B.S. Artist Detection Checklist to evaluate this guru. I am told he appeared with Robert Kiyosaki in Australia. I would not have done that. His Web site is rather brief and vague, but still manages many hits on item #20 of my BS detection checklist, for example, when he refers to his “automatic system for Creating Wealth.” Says he “retired” at age 32. So what’s with the making speeches in Australia and selling products and “boot camps” off a Web site. He’s hustling a buck pretty hard for a retired guy. Few retired people have Web sites, and those that do only have family news and photos.
Cash Flow Generator (Cape Coral, FL)
Now owned by Russ Whitney. See my extensive articles on him.
Joel Cassway
Too expensive for my tastes. Worked with Givens and Pino.
CCIM Courses
I took the Certified Commercial-Investment Member of the Realtors® National Marketing Institute seminars in the mid-1970s. The ones on income-tax law and the time value of money were excellent. I did not much care for the one that taught how to do a feasibility study. Although it has been many years since I took those seminars, I have heard nothing since that would cause me to believe the current versions are any less excellent. The name of the Institute has changed to Commercial Investment Real Estate Institute. www.ccim.com
George F. Coats deceased
Author of Smart Trust Deed Investing in California. Super book. Super guy. Best information I know of on trust deed investing. Those of you who do not live in California are foolish to wait for your state to produce a George Coats. Other states are generally not large enough to warrant the writing of real estate investment books aimed just at one state. Even if they were, guys as good as Coats are probably a once-in-a-lifetime occurrence. You have to modify Coats' California book with your own local research if you want to invest outside California.
Peter Conti—Unknown
Uses the business name Mentor Financial Group, LLC. The purpose of an LLC (limited liability company) is to make it harder for you to sue the owners of the company in question successfully. Use my Real Estate B.S. Artist Detection Checklist to evaluate this guru. Advocates use of lease options. See my article on that subject. His Web site says Mentor Financial is “Registered by the Colorado Secretary of State’s office as a company in good standing…” That seems to imply some sort of approval or endorsement by the state. In fact, all corporations and LLCs are required to register with the secretary of state’s office. That’s about as meaningful as my saying I am “Registered by the California Department of Motor Vehicles as a vehicle owner in good standing.” The products on his Web site sound like the same old mix of nothing down, lease option, etc. that so many other gurus are pushing.
No longer associated with David Finkel. Now Explosive-Cash-Flow.
Wade Cook (Seattle, WA)
Real Estate Money Machine author. He has declared bankruptcy multiple times, has unpaid fines levied against him by state attorneys general, has been the subject of cease-and-desist orders from attorneys general, has taken the Fifth Amendment in court, and has been indicted. Smart Money magazine did an extensive article (“Wade’s World”) on his financial and legal difficulties in October 1996. Call 800-925-0485 for a copy. The State of Texas went after Cook on 5/1/98. While you are at the FTC Web site, you may want to search around for other pertinent information. I suggest you bookmark my site before you do so you do not have to hit “back” a zillion times to find your way back. Here is a link to a Reader’s Digest story about Cook and other gurus. There is a devastating article from the Wall Street Journal at the Motley fool Web site. The Street.com has an article with a nose-diving graph showing the performance of Cook’s trades and another by a staffer who attended Cook’s seminar.
On 10/5/00, Bloomberg News accounts said Wade Cook Financial Corp. would offer refunds to thousands of investors who attended Wade Cook stock-market seminars. This was to settle action brought against Wade Cook Financial Corp. by the Federal Trade Commission. Cook was also sued by the attorneys general of the states of AL, AZ, CA, ID, IL, KS, MO, NC, NM, OK, OR, PA, TX, and WA. Cook told investors they would learn how to double their money every 2 1/2 to 3 months and claimed “We do it all the time.” Cook’s corporation’s stock market investments lost 42% of their value in the first half of 2000.
Investors who did not earn back from stock-market trading at least what they paid for the seminar (up to $6,295) are eligible for refunds. Shares in Wade Cook Financial Corp sold for as much as $5.30 in 9/97. Last I heard, they sold for 18¢. Although neither Cook’s students nor his shareholders have done very well (he owned 64.5% of Wade Cook Financial Corp. on 4/30/00), Cook himself took $22 million out of the corporation in compensation—more than triple corporate earnings for the period.
Cook is a best-selling author (Wall Street Money Machine) and also wrote Real Estate Money Machine previously. He is one of a number of best-selling financial authors who make that list, in large part, a rogue’s gallery. The many people who buy Cook’s books and attend his seminars are idiots. I have talked to some on the phone. When they ask about him, I recite all his legal troubles, including his bankruptcies. They then ask what I think of his latest book. Like I said, idiots.
On 12/19/02, Wade Cook Financial Services was put into involuntary Chapter 7 liquidation bankruptcy (Case No. 02-25434) in the U.S. Bankruptcy Court of the Western District of Washington. On 1/17/03, this was converted to a Chapter 22 reorganization bankruptcy on 1/17/03. When I did a search to confirm this, I typed Wade Cook bankruptcy into Google and immediately got the pertinent Web page of the Western District of Washington U.S. Bankruptcy Court Web site.
There is a story about it at http://seattletimes.nwsource.com/html/businesstechnology/134686071_wadecook30.html.
Here is an article I wrote about Cook’s being indicted for tax fraud in 2005.
On 2/20/07, a federal jury in Seattle found Cook guilty on seven of eight criminal charges of not paying taxes due on $8.9 million of income from 1998 to 2000. The jury was unable to come a verdict on the eighth charge, tax fraud, and on any of the charges against Cook’s wife. At the time of the verdicts, the U.S. Attorney’s office was unable to say whether they would retry Cook’s wife or the tax fraud count against Cook.
On August 2, 2007, U.S. District Court Judge Thomas Zilly sentenced Wade Cook to seven years and four months in prison and his wife Laura to 18 months in prison. Laura pled cuiilty to obstruction of the IRS to avoid a second trial. The judge also ordered the Cooks to pay $3.75 million in back taxes. See the Seattle Times story at http://seattletimes.nwsource.com/html/localnews/2003819531_wadecook03m.html. The federal judge noted that Wade Cook had previously had to pay more than $500,000 in fines and restitution for investment fraud in Arizona, $4 million in back taxes in a prior case, and $2.7 million in judgments because of Federal Trade Commission action against him in 14 states.
At one point, Cook had four financial advice books on the New York Times best seller list. See my article about the rogues gallery that is the financial best seller list.
Russ Dalbey—Unknown
Loan brokerage. Not my area of expertise. Use my Real Estate B.S. Artist Detection Checklist to evaluate this guru.
Robert Dahlstrom
He co-wrote a book on flipping that I reviewed here.
William Danko
Click here to read my review of the book he co-authored, The Millionaire Next Door.
Jay P. DeCima (Redding, CA)
Reasonably-priced book ($24.95) Generally reasonably-worded brochure—although it is noteworthy that he tells you to whom the check should be payable, but gives no mailing address, thereby preventing you from paying by check. That’s the kind of mistake that disqualifies you from getting your financial-genius secret decoder ring.
Excellent book on the fixer strategy. I do not like the parts of the book that discuss partnerships and financing. I do not know if his more expensive products are worth their prices.
I could do without Jay's cornpone, Beverly Hillbillies costume and occasionally folksy language. De Cima is apparently from the Joe Land-Jimmy Napier School of Presenting Yourself as a Country Boy. It's a bit odd, but does not seem to prevent one from giving decent real estate advice. It's the guys who wear pinky rings and gold chains that you have to watch out for.
DeCima is a slob about checking his facts. For example, on page vii, he says, "nearly half the work force was unemployed during the Great Depression." It took me about 20 seconds to get the correct figure, 26% at the peak. The book contains a number of such Cliff Claven-style errors.
He also fails to attribute stuff he got from other people. For example, on page 93, he tells one of Joe Land's jokes without mentioning Joe and prefacing it with, "When I write about this subject, I'm always reminded of..."
When DeCima talks about non-fixer investment issues, his thinking is sometimes muddled, uninformed, or illogical. For example, his discussion at the top of page 9 and elsewhere in the book seems not to reflect an understanding of the time value of money. On page 116, he dismisses the use of computers in real estate out of hand. There is no doubt that computers can be misused. I recommend against all canned real-estate-investment-analysis programs. However, failure to use a computer to manage property or to analyze large amounts of useful, accurate data is idiotic.
He seems oblivious to an ethical issue on page 131. He says it's best to work with just one agent, in part, so you can get access to so-called "pocket listings." I was an agent for two years. "Pocket listings" do exist, but they are an unethical agent practice. A "pocket listing" is one which the agent keeps "in his pocket" and shows only to his best buyers. Since the agent has a fiduciary duty to get the highest price for the seller, he must publicize the fact that the house is for sale as widely as possible as fast as possible. If, instead, he only tells his favorite buyer, to avoid another agent splitting the commission, he is acting against the interest of his client, violating his fiduciary duty to the seller. You should not deal with unethical agents who keep listings "in their pockets" either as a buyer or as a seller.
Don't get me wrong. When DeCima talks about buying and fixing houses for profit, his book is excellent. But he says a number of things that I must dissociate from my general recommendation of the book lest readers think I agree with everything that's in it. Because I see a number of inaccuracies, exaggerations, and failures to attribute in the book, I worry that some of the unverifiable statements about DeCima's successes may be similarly inaccurate or exaggerated or the result of external factors rather than the result of DeCima's own efforts.
Click here to read my review of his book, Fixin' Ugly Houses for Money.
Dave Del Dotto (Hawaii and Modesto, CA)
Former sheetrocker from Modesto who did infomercials featuring himself sitting on the beach in Hawaii. I debated him on Larry King Live. Del Dotto strikes me as the dumbest of the famous gurus. In one of the books he sold with his home-study course, he said to take advantage of a Farmers Home Administration loan. If you're not a farmer, he said, get one to "front for you." Many of the other gurus give similar advice. But Del Dotto is the only one I know dumb enough not to understand that the standard, get-rich-quick-guru way to deal with the issue is not to mention the farmer requirement. For the record, getting a farmer to front for you in a loan program that's for farmers only is a felony. Del Dotto's Modesto headquarters was foreclosed in the '90s.
The Wisconsin State Bureau of Consumer Protection published a Guide for Wisconsin TV stations which lists several "Questionable infomercials," among them those of David Del Dotto.
In the 6/8/98 Newsweek, Jane Bryant Quinn said that Del Dotto had gone bankrupt. I still see him on TV, only now this one-time "real estate expert" is selling products unrelated to real estate.
The WA attorney general sued Dave Del Dotto and his Affordable Housing, Inc. The suit alleges Del Dotto made numerous misrepresentations about real estate investing, some of which violate a U.S. District Court order. It also accused him of acting as a broker without a license: he collects $500 deposits to be credited toward closing costs for a mortgage which he will help them get.
The court papers said Del Dotto was a principal in a firm that filed bankruptcy and has been the subject of repeated enforcement actions by regulators, including the FTC and the Insurance Commissioner of Hawaii. They also allege that he tells seminar students inaccurate information, i.e., that they can pocket the proceeds of government-insured home-improvement loans, that they can get mortgages for 1% to 3% less than less informed consumers, that his customers typically make a profit in real estate using his system, that you can get free-and-clear title to a house by simply paying back taxes of as little as $500, that it's easy for people with bad credit to buy houses for nothing down, and that you can add $50,000 equity to a home by painting and adding carpet.
In short, WA says Del Dotto "charges high fees for information which is virtually worthless, outdated, and unethical." WA authorities were seeking a restraining order to prevent Del Dotto from holding a seminar in the state. Court papers reveal previously unknown facts about Del Dotto: IRS placed a lien on his Hawaii house in 1993. In 1995, Hawaii sued him for nonpayment of $5,000,000 in loans. He filed for Chapter 7 personal bankruptcy, and his corporation filed for Chapter 11 bankruptcy in 1995. In 1996, he agreed to pay a $200,000 fine to the FTC.
What's new here is that government authorities have finally become appropriately aggressive in pursuing guys like Del Dotto. Unfortunately, the gurus seem to be ignoring the authorities to an extent, witness Del Dotto's alleged ignoring of a previous federal court order. Another new development: many gurus have begun to structure their pitches so as to run afoul of securities and licensing laws.
Many investors originally came into real estate as a result of pitches from gurus like Del Dotto. Too many investors still have vestiges of those original pitches in their real-estate-investment programs. See also David Martin's letter.
Dolf De Roos
Click here for a review of New Zealander De Roos’ book Real Estate Riches.
Don’t know if it means anything, but a reader of this site who is from the U.K. says he thinks DeRoos has a South African accent, not a New Zealand accent, and that the name DeRoos sounds Dutch and Afrikaner. Dutch settlers created South Africa. Afrikaner is a South African language similar to Dutch.
Claude Diamond (Chula Vista, CA and Winter Park, CO)
Lease-option guru. I talked to Diamond and he seemed pretty sharp at the time. But I cannot recommend him for two reasons: His lease-option program has a 50% failure-to-exercise rate and his price for his "mentoring" service is in the multi thousands of dollars. See What you need to know about lease options for a discussion of their problems. See my Why you should not buy expensive seminars or mentoring services for more on Diamond's fee and my opinion of it.
I have received many different responses to negative reviews on this page—threats, attempted bribes, extortion, and attempts to "kill me with kindness." Diamond, however, takes the prize for the most juvenile response. "Juvenile" is not a word usually associated with mentors.
On 6/29/00, Bill Mencarow told me he had just learned that Diamond bought the number one ranking for the key words “Paper Source” at goto.com. Apparently this means that anyone who searches for “Paper Source” in goto.com’s search engine will get a list with Diamond at the top. Mencarow takes umbrage at this because he has been publishing the newsletter PaperSource and putting on the Paper Source convention for many years. A common law called “unfair competition” may be pertinent. “Unfair competition” is defined in Black’s Law Dictionary in part as “…endeavoring to substitute one’s own…products in the markets for those of another, having an established reputation and extensive sale, by means of imitating…the name, title,…the imitation being carried far enough to mislead the general public or deceive an unwary purchaser, and yet not amounting to an absolute counterfeit or to the infringement of a trademark or trade name. Singer Mfg. Co. v. June Mfg. Co., 163 US 169”
John,
I saw your web page. I am an attorney involved in litigation against Claude Diamond. My client was a young business entrepreneur who engaged the “mentoring” services of Mr. Diamond. He is being sued by Mr. Diamond. I am investigating Mr. Diamond, his background, credentials, and qualifications. I would be interested in speaking with individuals with similar consumer related complaints against Mr. Diamond. If you have any information, it would be greatly appreciated. Your web site is very informative. Thank you.
Name removed at the attorney’s request after being initially posted here at that same attorney’s request
Elmer Diaz (Houston)—Unknown
A reader says Diaz claims to have been the past president of the National Real Estate Investment Association. I had never heard of that organization. An Internet search reveals an organization by that name, but it appears to be for institutional real estate investors only. Institutional real estate investors are pension funds, REITs, etc. The reader also says Diaz is a “follower of Robert Allen, Robert Kiyosaki, and Robert Shemin.” Since I do not recommend Allen or Kiyosaki, it is unlikely I would recommend Diaz. The reader also characterizes Diaz as “a strong proponent of asset protection.” I generally think strong proponents of asset protection are paranoid and a little kooky. Another reader says Diaz has said nice things about Sheets but “does not endorse any guru.” I am not sure what the word endorse means in that phrase. If Diaz disagrees with the teachings of Allen, Kiyosaki, or Shemin, he ought to tell me so if this is incorrect. None of these guys are in my Rolodex.
Gary DiGrazia (San Lorenzo, CA)
My one-time adult baseball teammate. His Diamond Farming (510-278-2017, FAX 510-317-9644) is a solid book on probate investing in California. As with Coats' book, in the land of the blind, the California book is king. If you live outside California and want to invest in probates, DiGrazia's book is probably the best thing you'll ever find. You'll have to modify it to reflect differences between your local law and California's laws. I wrote about him in How to Buy Real Estate for at Least 20% Below Market Value.
Joe Dominquez
Jim Kerr wrote:
Mr. Reed -You mentioned that you were unaware of Joe Dominguez and his book "Your Money or Your Life". Joe is now deceased, but in the early 90’s he wrote (with Vicki Robin) the book "Your Money or Your Life". It is NOT a get rich quick book. Basically, he feels most Americans spend way too much money. The book promotes the idea that financial independence and early retirement can be achieved through frugality. I enjoyed the book and agree with most of what he says. Probably the only thing I disagreed with was his recommendation to buy 30 year US treasury bonds to provide you with a steady stream of income. I believe he downplays the danger of inflation. His book is readily available in bookstores. I highly recommend it.By the way, I really like your site and what you are doing! Jim Kerr
John T. Reed responds:
Thanks for your kind comments about this site. Dominguez sounds like my kind of guy. I agree with your comment about 30-year bonds.
Gary Eldred
Here is a review I wrote of his book Value Investing.
Gayle B. Ellison
Use my Real Estate B.S. Artist Detection Checklist to evaluate this guru.
Michael R. Enelow (Duquesne Heights, PA)
I got an email from a reader who told me there was a story in the Pittsburgh Post Gazette newspaper about a real estate investment guru who was in trouble with the law. The story is at http://www.post-gazette.com/neigh_city/20020808cburbs9.asp. According to the article, 61-year old Michael Enelow was indicted on 29 counts of wire and mail fraud by a grand jury in connection with a real estate invesment scam. He reportedly ran ads in periodicals around the U.S. from 1995 through 2000 offering money to people who would refer real estate deals to him. The indictment said he lied about how much money he had and how many deals he did. He charged $1,500 to sign up and got over a thousand people to send him that much. (1,000 x $1,500 = $1,500,000) The FBI said Enelow lived off the $1,500 charges and that his real estate dealings were insignificant.
Cliff Enz (Morrisville, PA)
On 7/25/97, a reader alerted me that Cliff Enz's Web site had plagiarized mine. I visited his site and found that Enz had copied the guru portion of this Web site including my copyrighted “B.S. Detection Checklist” article and a reader-input-soliciting page I used to have here, and put it on his own web site with some changes. He presented my material without permission and without attribution to me and even said “The material is copyrighted,” implying that he owned the copyright. He claimed the material was “the product of personal observation, research and analysis...” You bet, mine and those of my readers.
The only business I have ever had with Enz is that he asked for a free copy of my annual update booklet. If anyone finds he has published that anywhere as his own, please let me know.
Words cannot express my contempt for Cliff Enz.
Richard Epley (Houston)—Unknown
The “Blue Jeans Millionaire.” One-time “real estate investment expert” now selling multi-level health stuff through Rexall. A reader comments that’s “peculiar since at one time he espoused staying away from multi-level and other business opportunities since they were a needless distraction from real estate--where the ‘real’ money was to be made.”
David Finkel—Unknown
Use the business name Mentor Financial Group, LLC. The purpose of an LLC (limited liability company) is to make it harder for you to sue the owners of the company in question successfully. Use my Real Estate B.S. Artist Detection Checklist to evaluate this guru. Advocates use of lease options. See my article on that subject. His Web site says Mentor Financial is “Registered by the Colorado Secretary of State’s office as a company in good standing…” That seems to imply some sort of approval or endorsement by the state. In fact, all corporations and LLCs are required to register with the secretary of state’s office. That’s about as meaningful as my saying I am “Registered by the California Department of Motor Vehicles as a vehicle owner in good standing.” The products on their Web site sound like the same old mix of nothing down, lease option, etc. that so many other gurus are pushing.
No longer associated with Peter Conti. Now Maui Millionaires, LLC.
Foreclosurebargains.com
Here is an email I got from a reader about this company.
"A foreclosure listing service that advertises on television. They provide REO listings. I sent for a three month subscription in September 99 which consisted of three monthly issues for approx. $50 non-refundable. The two issues they sent were received late and the third was never received. Calls were not returned. The information in the issues was over two months old by the time I received the issues. The only charge authorized was this $50 charge back in September. Move forward to March 23 and I find that this company has charged $499 to my credit card they had on file. I cannot reach them at their customer service number or order line. New VISA guidelines require the card issuer to send to the card holder a dispute form that must be filled out and signed before the dispute can be processed. Now I have to wait for the card issuer to contact the merchant for their side of the story." Chris Golianis
ForeclosureListings.com
I received a complaint about this company from Ryan Ballard. He also sent me some emails he says they sent him. Please click here to read those emails. Warning: the emails from ForeclosureListings.com contain profanity. In one email, ForeclosureListings.com questions Mr. Ballard’s intelligence. He is a college graduate. For what it’s worth, he is also a professional baseball player (minor league).
Foreclosureworld
I got a letter from a reader about it. Click here to read it. Use my Real Estate B.S. Artist Detection Checklist to evaluate this guru.
Fortune 21 (See also Success Magazine)
Clickhere to read letters I have received about Fortune 21.Use my Real Estate B.S. Artist Detection Checklist to evaluate this guru.
Dan Franklin
Clickhere to read an email I received about Dan Franklin.Use my Real Estate B.S. Artist Detection Checklist to evaluate this guru.
Richard Gardiner (last known address Rocklin, CA)
Big advocate of lease options. Wrote a book called Real Estate Option Techniques.
Gardiner was always arguing with me, which I normally love. Taking a position and debating it is my favorite way to figure things out. But there are only two legitimate debate tactics: finding errors or omissions in the other party’s facts or logic. There are a bunch of illegitmate debate tactics: changing the subject, strawmen, name calling (e.g., “you’re too negative”), and so forth. Gardiner would hit me with multiple illegitimate debate tactics in rapid fire. He subscribed to my newsletter as recently as March of 2000. When he came up for renewal, I tossed his renewal notices in the trash rather than mail them to him because I decided I did not want his business. I had never done that with any other subscriber.
He was always arrogant and bragging about what a big-time real estate guy he was. On 1/24/00, he filed bankruptcy in the U.S. Bankruptcy Court for the Eastern District of California in Sacramento. I did not learn that until a year later. On 1/24/01, I called his phone number to ask if what I had heard was correct. It was disconnected. As a result of his not appearing in court when ordered, an “order to apprehend” him was entered in the Federal Bankruptcy Court in Sacramento. The authorities there cannot find him and would like to know where he is. I am trying to find the full scope of what happened. One story I heard was that he was a property manager who sold his clients’ properties without their permission and kept the proceeds! One account of that says he could do this because he had broad power of attorney from them. Another said he got his clients to give him “unrecorded deeds” to their properties saying he needed such deeds in order to manage their property.
A person who said he “represented” her in setting up a bunch of lease options was in a panic because five were coming due and the index Gardiner had her tie the option prices to had not gone up enough. As a result, each property was worth about $60,000 more than its option price. She was looking for an “aggressive” attorney to “defend” her against the buyers who wanted to exercise.
Marc Stephen Garrison
Pepe1989@aol.com wrote: have you ever heard of Marc stephen garrison ? he takes people on real estate buying tours out of the area where they live because he finds better markets. does this make sense to you?
Garrison was an associate of Robert G. Allen. He and Allen had a falling out. Allen apparently gave Garrison his newsletter to satisfy or partially satisfy a debt Allen owed Garrison. Garrison strongly urged me to write an article exposing Allen's financial difficulties. I said I needed proof and Garrison helped me get key interviews and told me where to look for key documents. I wrote the article in my 9/87 issue. Garrison also tried to get me to take over the newsletter. “I don’t want to put out a July issue,” he said. I believe that was in June of 1988. I made my standard offer for taking over newsletters (I have taken over three): You pay me the cost of printing and mailing my newsletters to your subscribers and I will pay you half of each renewal by your old subscribers for the first year and 25% of each renewal the second year. He wanted a better deal. I believe he sold it to Mark Haroldsen.
Brief (six months) windows of opportunity have opened in various areas like Anchorage and Oklahoma City in the last twenty years. I don't think anyone could make a living taking people to such opportunities because they only occur once every five or ten years. Plus most people would be chicken to invest in such dramatically depressed areas.
A more common pattern is investors from high-priced areas erroneously concluding that real estate is a bargain in lower-priced areas because they are cheaper than in the investor's home area. The classic group that made that mistake was the Japanese coming to the U.S. I have also heard of New Yorkers (high priced) being taken to Camden, NJ (ghetto and also my birthplace) by Sonny Bloch and various people have capitalized on the propensity of Californians (high priced) to conclude that prices in places like Arizona (lower prices) must be too low because they are so much lower than California.
I think it's possible for opportunities to exist in some areas of the U.S. other than the brief windows of opportunity I described above, but it would have to be a rather esoteric niche which the typical investor who uses someone else (Garrison) to find properties would be afraid to invest in.
His 1986 book Financially Free is one of many real estate investment books which I describe as "Real estate dictionaries that are not in alphabetical order." You do not need to buy a real estate dictionary. There are several on-line for free.
A reader tells me he found a Chapter 7 bankruptcy for a Marc S. Garrison in Gilbert Arizona in 1997. I do not know if it is the same person.
Jane Garvey (Glen Ellyn, IL)
Solid, down-to-earth experienced author publisher of Creative Investor newsletter and several how-to books. President of the Creative Investors Association Chicago, a former Bob Allen Club. Widow and former partner of the late beloved guru Marc Goodfriend. Former college professor.
Bill J. Gatten
Gatten has complained about this portion of my Web page. He told me on 5/9/03 that it had cost him “exactly $51,456.57 in sales.” He did not explain how it would be possible to know such a thing.
Click here for my analysis of a free seminar he gave on his PACTRUST.
The summer 2007 issue of the Ohio Division of Real Estate and Professional Licensing newsletter contained an extraordinary statement by a professional engineer. It told how the engineer was drawn into real estate by Kiyosaki’s book Rich Dad Poor Dad and sent on a bad path by Kiyosaki’s employees. It also refers repeatedly to a person whose first name was Bill and whose last name was redacted who advocated a complex trust arrangement for investing in real estate. I have obtained an unredacted copy of the statement and the person named Bill is, indeed, Bill Gatten and the trust in question is, indeed, Gatten’s PACTRUST.
The professional engineer was fined $39,000 by the state of Ohio, but was told that the fine would be waived if he made a comprehensive statement to the public about his experience.The purpose of the statement and its being printed in the Ohio government newsletter was to warn others from making the same mistake as the engineer. You can see that newsletter at http://www.com.state.oh.us/real/documents/2007Summer.pdf. Also, I have copied and pasted the unredacted version to my Web site. I redacted on my own initiative the names of persons who appear not to be public figures. You can read it by clicking here. I put a copy of the statement at my Web site because government documents are not copyrighted and because sometimes government Web sites later remove older documents.
Here are a couple of the engineer’s statements in which he summarized his feleings about Gatten:
...Bill Gatten offered us no assistance when problems arose. When we contacted Equity Holding Corporation (the trustee established by NARS), they denied any relationship with the property and claimed they did not receive payment or documentation to act as the trustee, even though we have documentation from NARS showing payment and trust establishment (see Appendix 3). I have gone back to engineering and continue to pay off the debt incurred by this endeavor. Our involvement with Mr. Gatten and his trust system is regrettable. The experience with Mr. Gatten and his system has been a very negative one for us and we have no current or planned future involvement in real estate investing. We caution other potential investors to thoroughly investigate a program such as this before becoming involved.
Gatten sent me a long email about the Ohio item. Since it started off ranting and raving, I only read a paragarph or two. He may have some response to the Ohio statement at his Web site. If you are interested in his response, I suggest you visit his Web site to read it.
Genesis media
Here is an email I got from a reader.
I mention Genesis Media in this e-mail message. Not sure if they are mentioned at your site but they have provided Telemarketing services for Ted Thomas, Fortune 21 Inc., and possibly Michael T. Warren. There is a post at papersourceonline that mentions Michael T. Warren and the person was given the number for Genesis Media as a contact number. Ted Thomas and Fortune 21 Inc. are mentioned in SEC forms filed by Genesis Media. If you ever want to know more about Genesis Media check the posts at ragingbull (www.ragingbull.com; message board - GENI). The posts by Charles_Ponzi are simply amazing. Genesis Media is a subsidiary of GENI (whatever that symbol stands for). This is an activity you would undertake if you had a lot of free time on your hand and like good spy novels. It reads like a great fi! ction spy novel except it ain't ficition. …ex-Saud arms dealer Khashoggi, who controls GENI.
Charles Givens (deceased)
If you look up "glib" in the dictionary, you'll find a picture of Givens next to the definition. Givens was the Cliff Claven of finance. His International Administrative Services, Inc., which did business under 16 names including some involved in real estate, went bankrupt in Orlando in the summer of 1996. In 1993, he lost a lawsuit stemming from the uninsured death of a man killed in a car accident by an uninsured driver after Givens advised the deceased to drop his uninsured motorist coverage. That same year, he settled a fraud and deceptive trade practices suit filed by the Florida attorney general by agreeing to pay $177,000 in refunds to 135 disgruntled customers and to reimburse the state for its investigation costs.
In 1995, the Florida Attorney General got Givens to agree to pay $377,000 to cover refunds and the cost of the Florida investigation. Givens also agreed to stop making certain claims about the value of his teachings and to make full refunds to anyone who requests them within three days of receiving his materials. Two juries found him guilty of fraud.
In 1996, a California jury said Givens had defrauded 29,000 customers in that state and ordered him to refund $14.1 million to them.
The Wisconsin State Bureau of Consumer Protection published a Guide for Wisconsin TV stations which lists several "Questionable infomercials," among them those of Charles J. Givens. Givens died of prostate cancer in July of 1998.
Global Resource Network
A reader tells me they charge $5,000 to teach note brokering. That's too much. The reader also said they tried to pressure him into borrowing money to pay the $5,000. I find it hard to believe that anyone would stoop so low, or that there are idiots out there who respond to such pressure.
Steve Goff—unknown
Use my Real Estate B.S. Artist Detection Checklist to evaluate this guru.
Steven Good
Click here to read my review of his book Churches, Jails, and Gold Mines
Allen Gorin—unknown
Click here to read my review of his book, How to Nail Down Your Home Improvement Project Without Getting Screwed.
Benjamin Graham—unknown
Click here to read my review of his book, The Intelligent Investor.
Ione Young Gray
Ione Young Gray - #74491
Current Status: Disbarred
This member is prohibited from practicing law in California by order of the California Supreme Court.
Bar Number: 74491
Address: 2265 Westwood Blvd., #337
Los Angeles, CA 90064
District: District 7
Undergraduate School: Rice Univ; Houston TX
County: Los Angeles
Law School: Columbia Univ SOL; New York NY
Bill “Tycoon” Greene (fugitive)
The biggest character among the real estate gurus. Doonesbury's Uncle Duke come to life. He made a big splash in the late '70s with his book, Two Years for Freedom and multiple appearances on the Dinah Shore Show. He was convicted of federal income tax evasion and sent to prison. He escaped. One version I heard was that he escaped while on emergency leave visiting a sick relative. The other was he disappeared from a half-way house. In any event, he is apparently living in England using the name Dr. William G. Hill. Numerous books are for sale there by that author. They are virtually identical to Greene's books. When John Beck came across the books in England, he asked the publisher how he could get in touch with “Dr. Hill.” He was told they could not even get in touch with him, that Dr. Hill calls them.
I thought Greene had some good ideas but I could never recommend his stuff because it contained too many bad ideas, like backing out of a deal based on a clean termite report. He explained, “You could say you wanted a building with termites.” No, you can't. The courts will not allow such nonsense. See also David Martin letter.
Kevin D. Haag of Douglas Realty, Inc. (4821 Coronado Pkwy, Cape Coral, FL 33904)—Unknown
Use my Real Estate B.S. Artist Detection Checklist to evaluate this guru. This is Russ Whitney’s Realtor®. His office is across the street from Whitney’s building.
Mark Haroldsen (Salt Lake City, UT)
Author of How to Awaken the Financial Genius Within You. Publisher of the now quarterly Financial Freedom Report. His main claim to fame is that he invented the densely-worded, full-page, magazine, direct-mail ad to sell his book. The novelty of that trick apparently has long since worn out. I haven't seen it in years.
Financial Freedom Report was accused of 83 counts of deceptive sales practices by the Utah Division of Consumer Protection according to a 5/19/97 KSL-TV story in Salt Lake City. Utah had received over 900 complaints about Financial Freedom Report nationwide since 1993 but only took action based on the 83 complaints from Utah residents. KSL-TV said the Commonwealth of Virginia had also taken action against Financial Freedom Report.
The Wisconsin State Bureau of Consumer Protection published a Guide for Wisconsin TV stations which lists several "Questionable infomercials," among them those of Financial Freedom Report.
Haroldsen's people once called me to ask permission to reprint one of my book chapters as an article in their magazine. I said, "OK, for $375." They said they only paid $125. I said no deal. They went ahead and printed it anyway and sent me a check for $125. I sent them an invoice for $250 and a strongly-worded note. They ignored me. I then told everyone I met who had the slightest interest in Haroldsen about that incident. Many months later, Haroldsen was coming to Monterey, California to give a seminar. I plotted how I could obtain a judgment against him and have the sheriff execute the judgment by till-tapping, that is, seizing his receipts, at the seminar. About that time, he sent me a check for $250. If you'd like to be treated the way he treated me, deal with Mark Haroldsen.
On another subsequent occasion, Haroldsen's people asked me to speak at his annual convention. I refused.
Here’s an email I got about Haroldsen.
“In 1976 I was one of the one's that purchased Mark Haroldsen's How to Awaken the Financial Genius Within You through the mail. I was 12 years old, and not to be funny, but it was written right on my level. He had a very simple easy way of explaining the power of compounding, but even at that age I could see a flaw in his math. He stated that he was worth millions and planned to double his net worth every year for the rest of his life. Let's see... If was worth two million in 1976 then he should be worth over 67 TRILLION DOLLARS in 2001.”
Haroldsen apparently won an FTC complaint case against him. I do not fully understand the FTC’s Website. Look at it for yourself at http://www.ftc.gov/ogc/status/injunct2.htm. I had not been aware that the FTC had filed a case against him until a Haroldsen supporter told me about it.
Greg Hickman
Plagiarized Bill Mencarow until persuaded to stop by Mencarow's attorney.
Tyler G. Hicks
A reader was kind enough to give me Hicks’ 1989 book How to Make $1,000,000 in Real Estate in Three Years Starting With No Cash. First, the title is ridiculous. The third page of the book lists Hicks’ other book titles. Almost all of them trigger item #20 of my BS artist detection checklist. If I were forced to write a book by the title Hicks chose for this book, it would be very narrowly focused. I figured that’s what Hicks would do. I mean how many ways can there be to make $1,000,000 in three years starting with no cash? The way Hicks tells it, it almost doesn’t matter which approach you use: conventional financing, credit-card loans, raw land, residential property, commercial and industrial property, islands, fixers, motels, limited partnerships, condos, stock market, theaters. This is absurd.
Not wanting to waste much more of my time on Hicks, I just checked out the raw land chapter. It defines raw land, lists obvious advantages and disadvantages (e.g., cheap, pays no income), says its valuable because it’s a limited commodity, says to buy in the suburbs of a major city in the direction of growth, etc. This is conventional wisdom. It’s not worth a nickel, let alone the price of the book.
On page 100, he tells of a guy who made his quick million by electing himself mayor of a ghost mining town then issuing municipal bonds, part of the proceeds of which were used to pay himself a “good salary.” Hicks says the guy “restored the city as a tourist attraction.” That is, at least, a mildly interesting idea which is not conventional wisdom. But I do not believe it. This is what I call “seminar real estate”—stuff that delights ignorant seminar audiences, but which has no relationship to the real world.
Since majority rules in elections, I suspect there is a rule that you must have at least three voters to hold an election and that there is some government agency which oversees elections to make sure they are honest. To vote in a town election, you have to live in the town. Ghost mining towns may be uninhabited, but they are not unowned and they have posted "No trespassing" signs. In order to live in the town, you must buy or rent from the owners, neither of which is likely when you have no cash. I am a Harvard MBA. Many of my fellow Harvard MBAs are in the municipal-finance business. The notion that they would underwrite and successfully sell out a multi-million-dollar bond issue on a ghost town and deliver the proceeds to the sole inhabitant and “mayor” who owns no property there is silly. All bonds and prospective bonds must be rated according to their risk. The rating agencies, like Moodys and Standard & Poors, would visit the town and ask to see its financial books. It wouldn’t even get that far. The prospective underwriters would ask about the town’s population, annual tax revenues, operating expenses---then they would hang up. If Hicks calls, you should do the same.
Tony Hoffman
Former Lowry employee. Nothing-down seminar guru and author of the book, How to Negotiate Successfully in Real Estate. I detest him and his book. It gives unethical advice, like threatening to renege at the eleventh hour in a deal in order to get better terms. I debated him, or tried to, on a Financial News Network TV show in the '80s. I say "tried" to because it was a call-in show and the callers attacked Hoffman so viciously that any additional comments I made would have seemed like piling on. So I just sat back and listened.
Hoffman's company declared bankruptcy. Although he expressed a plan to become governor of California, he was more recently seen selling drape-cleaning devices in TV infomercials and he was the producer of the video O.J. Simpson did to prove his "innocence."
Larry Holder, Wealth Builders
The name of this company triggers item #20 on my BS artist detection checklist. Here’s an email I got about him:
John, I just went to a Larry Holder seminar. He had the gaudy rings, showed us pictures of his "million dollar cabin", referred to flying his plane in that day (his assistant inadvertently admitted they drove in), and asked for $6,000 for his seminar and mentoring. This could be conveniently paid for by credit card. Thought you might like to add this to your BS list!
interlinkwealth (Carlsbad, CA)
Use my Real Estate B.S. Artist Detection Checklist to evaluate this guru.
IREM courses
I took Institute of Real Estate Management courses in the mid-1970s. They were good, not great. IREM puts out a lot of lame books. Their courses are better, probably because the committee that destroys their books can’t edit the instructors during their presentations.
Robert Irwin (Rancho Palos Verdes, CA)
By far the most prolific real-estate-investment author, but that title seems to be his goal rather than communicating new information that the world needs. Books range from ho-hum to OK. I wish he would knock off the quantity and switch to quality. His books won’t hurt. Neither will they help much if you already read the good books available. He has little or nothing new to add. I am annoyed that he did not acknowledge the contribution of any ather person in the books of his that I have. I do not recall him ever mentioning any other human being in his books except for Napoleon Hill, a long dead motivational writer. He is also extremely coy about the titles of his other books and where he is for some unknown reason.
Click here to read my review of his book, Improve the Value of Your Home Up to $100,000.
Click here to read my review of his book, Find It, Buy It, Fix It.
Victoria A. Jackson
Click here to read my review of the book she co-authored with Sidney A. Pashkow, Focusing on Foreclosures.
Vena Jones-Cox
Lease-option guru. I am not familiar with her material, but I have yet to find a lease-option guru whose approach is satisfactory to me. See my article on lease options and my Special Report on the subject.
Joe Kaiser (Tacoma, WA)
Author of the Ultimate Lease Option Strategy. Kaiser's main point is to contact owners of vacant homes and rental house owners who have filed eviction lawsuits. That's a good idea. But he says his strategy is "one size fits all." There is no such strategy. He says lease-option investors can avoid triggering the due-on-sale clause in the property's mortgage if they do it "correctly." That is not true and, indeed, Kaiser never tells you how to do it "correctly." In a couple of aspects of his approach, Kaiser misleads the seller. He barely mentions all the legal complications of lease options, complications which are comprehensively explained in my special report Single-Family Lease Options. I also do not like the fact that his book has so much blank white space that I figure 82 of its 232 pages would be blank if he used normal margins and typesetting. Kaiser is also one of the many gurus who offers an expensive mentoring service. See my discussion of expensive seminars and mentoring services.
I did an article on Kaiser's lease-option book at his behest in the 11/97 issue of my newsletter, Real Estate Investor's Monthly. I did not like his book and he did not like my review. Kaiser then published a critique of my article which I did not believe described what I said accurately. Accordingly, I am putting the whole article here.
A.D. Kessler
Some of his Creative Real Estate Magazine's article authors are good, others are by guys I do not recommend. Gurus I recommend rarely write for Kessler.
Kessler was somewhat broker or guru oriented last time I saw any of his stuff. In other words, he was more about helping brokers get commissions or gurus sell their stuff than he was into helping investors make money in their investments. An experienced investor once told me much of Kessler’s material depicted an agent’s fantasy world—“real estate the way brokers wish it was” was the phrase he used. For example, one of Kessler’s authors was famous for bragging that he insisted that every single client come to his office. He never went to a client’s office. When a bedridden heiress begged him to come to her home, he told her to call an ambulance to take her to his office, and bragged about it at his seminars. Very creative.
Kessler’s company name triggers item # 20 on my B.S. checklist.
A number of years ago, his assistant called me to say they really liked my newsletter, Real Estate Investor’s Monthly, and wanted to sell it to their customers if I let Kessler pay a wholesale price for it and keep the difference. She predicted many sales. I agreed to this wholesale arrangement.
Months later, they sent me one subscription sale. After that, I forgot about them. About six months later, when I had a new employee doing orders, another Kessler order arrived. I had not trained the new employee regarding Kessler orders. She sent the subscriber an invoice for the difference between the wholesale check Kessler sent and the regular subscription price. A few days later, Kessler’s assistant called and gave me a tounge-lashing for embarrassing A.D. to the subscriber. I never figured out why he should be embarrassed about my not teaching my employee about the deal he arranged on subscriptions.
I recommend some stuff by people whom I do not like or who do not like me, because it would hurt my credibility and deprive my readers of good stuff if I did not do so. I do not believe Kessler has a similar policy. It appears that he regards everyone in the real estate infromation business as either in business with him, or against him and the quality of your material is secondary to that. To put it another way, if Kessler believed that my newsletter was good as his assistant told me, they should have beeen recommending it all along, including after our two-subscriber relationship. To only recommend writers who are currently in business with you strikes me as disingenuous. There are a number of people in the guru business who won’t recommend you unless they make money every time they do so, and will recommend you if they can make make a buck out of it, even if they are not that impressed with your material.
Ernie Kessler (passed away 4/30/03)
Kessler seemed like a great guy when I met him at a convention and when I interviewed him for an article. But he once asked me to speak at a conference in Niagara Falls. I agreed and asked for a letter confirming the terms. He said he would send it. It never arrived. When the date drew near, I called to remind him I needed the letter and to make travel arrangements. He did not return my phone calls. I finally got an assistant and told her if I didn't hear in the next day or two, the agreement was off. She called back to say the conference had been canceled. I have no objection to his canceling a conference. But not sending the confirmation letter and not returning my phone calls indicate a lack of responsibility and common courtesy.
On 3/14/99, about five years after the incident in question, Kessler called to apologize. He said he thought he sent me a letter telling me the conference had been called off. He said he is not computer literate and only found out about this Web page on 3/14/99 when a customer called and told him about it.
In May of 1999, a member of a real estate club told me Kessler had treated them the same way he treated me.
On 8/14/99, Frank Verchereau told me Kessler reneged on a deal involving purchase of a six-story apartment house in Schenectady, NY after committing in writing to do the deal. Verchereau had enormous difficulty getting Kessler to return phone calls as the closing date approached.
Robert Kiyosaki (Rich Dad Poor Dad)
I was told I would like this guy. His book was #1 on the Business Week best seller list. Eager to find another guy to recommend, I bought his book Rich Dad, Poor Dad in a bookstore and read it.
This is one of the all-time worst financial books ever written! I was so disturbed by it that I wrote an extensive review of it.
The summer 2007 issue of the Ohio Division of Real Estate and Professional Licensing newsletter contained an extraordinary statement by a professional engineer. It told how the engineer was drawn into real estate by Kiyosaki’s book Rich Dad Poor Dad and sent on a bad path by Kiyosaki’s employees. The purpose of the statement and its being printed in the Ohio government newsletter was to warn others from making the same mistake as the engineer. You can see that newsletter at http://www.com.state.oh.us/real/documents/2007Summer.pdf. The Ohio government copy is redacted. Also, I have obtained and copied and pasted an unredated copy of it to my Web site. You can read it by clicking here. I do this because government documents are not copyrighted and because sometimes government Web sites later remove older documents.
Nick Koon—Deceased
Deceased. Some of his stuff is still around. I do not recall being impressed by it one way or the other.
Joe Land
Joe was a nothing-down guru in the mid-'80s. I "debated" him on a 60 Minutes segment titled "Nothing Down" on March 16, 1986. Morely Safer was the correspondent.
Land said you only needed one technique. His was buying, at a discount, a mortgage someone had taken back on the sale of a house. Then you got a new institutional mortgage for 80% of value and used the mortgage you bought at a discount as down payment. The face value of the mortgage you bought at a discount was bigger than 20% of the value of the property you were buying, so you actually pocketed several thousand dollars proceeds of the new first mortgage at closing.
Morley Safer explained it well. He said the crux of Land's technique was persuading the owner of the mortgage that it was not worth what it said, then turning around and immediately persuading the owner of the house you were buying that the mortgage was worth what it said. There is no doubt some sellers are that dumb, especially those who are trying to sell overpriced property. But there are no institutional lenders who will knowingly do that deal.
I debated Land subsequently on a conference call that included Joe, me, and Time magazine reporter Jon Hull. Land insisted that he had done this deal many times and that many lenders would do it. I asked for the address of a property where Land had done such a deal. He refused to give one, citing confidentiality. Time promised anonymity to the lender. Land still refused. I urged Morley Safer to ask the same question of Land. He did and Land refused to provide him with an address, also.
Land stopped doing real estate seminars not long after the 60 Minutes piece ran. He later did TV infomercials in which he sold audio tapes purportedly containing subliminal self-improvement messages. All you could hear was sea gulls and ocean waves. I am told that at one of his real estate seminars, Land once told an associate, "These people would buy blank tapes if I told them to." Later when he was selling the seagulls-and-wave tapes, he said, "They aren't blank, but they're pretty close."
I always thought that blank-tapes story epitomized the real estate B.S. artist segment of the guru business.
Loral Langemeier
Click here to read my review of her book, The Millionaire Maker.
Learning Annex
In the 1970s, I took some real estate courses from the Learning Annex and they were good. But my 3/22/06 San Francisco Chronicle had a full-page ad about their “Real Estate Wealth Expo” that weekend in San Francisco. It headlines Donald Trump, whose book Art of the Deal I recommmend. And it has a number of gurus whom I do not know. But it also had at least seven that I do not recommmend.
This is the latest example of previously-respected organizations jumping on the bogus real estate investment information gravy train. Yahoo! offers Rich Dad Poor Dad author Robert Kiyosaki as a daily columnist. Time-Life sponsored Kiyosaki for a while. And PBS has had Kiyosaki on TV. According to the San Francisco Chronicle, the Learning Annex’s annual gross income jumped from $5 million a year to $100 million a year when they started promising to tell people how to get rich quick in real estate. That same article said the Learning Annex news release about the Real Estate Wealth Expo called real estate the “drug of choice” in San Francisco.
Time was not that long ago when someone at such organizations would check out a speaker or columnist before hiring them and say, “We can’t associate with this guy.” Apparently, a great many organizations have fired the guy who used to do that and replaced him with a guy who just checks the sales volume of the prospective speaker or columnist.
Al Capone would have his own entrepreneurship show on PBS now if he came back.
After the San Francisco Real Estate Wealth Expo I received some emails from persons who said they attended. The general tone was that Trump, Orman, and Robbins gave good speeches, but that the other speakers were all high-pressure salesmen pushing expensive stuff. That sounds like those three and perhaps Kiyosaki were paid to speak, but that the other “speakers” were actually exhibitors who paid the Learning Annex ($5,000 each according to the 3/28/06 Contra Costa Times) for the right to pitch their products and services to those who came to hear Trump and his fellow celebrities. Two or three attendees told me they were planning to exercise their federally-mandated three-day right of recission to get their money back.
I am also told that Learning Annex staff manned the order booths for each guru selling stuff. Just based on general business practices, I suspect that was because they were taking a cut of each sale and did not trust the gurus in question to give an accurate accounting of their sales. Not trusting the speakers that you foisted off on the public would make for an interesting line of questions at a class-action trial of such a sponsor. I also suggest that you follow the Learning Annex’s example and that you not trust the speakers either.
So it would appear that Learning Annex charged you to hear a bunch of sales pitches, charged the salesmen for the right to pitch you, and charged you and them again in the form of a cut when you bought. Normal practice would be that when you pay for information, you get pure information, not commercials. When you get information free, as on TV or radio, you expect to have to put up with commercials. Some products, like Time magazine, charge for subscriptions and sell advertising. As a consequence, the subscription prices are cheaper than they would have to be if they had no ads.
Learning Annex seems to have charged attendees primarily to listen to commmercials and only provided four paid speakers who were not hawking products in their speeches. I doubt that so many would have signed up had they known that was what they were getting. Many of those quoted in the Contra Costa Times story said they were unhappy with the amount of selling they were subjected to. They thought it was going to be all information.
Oddly, I got a call late Friday night, 3/24/06, at my home. Some woman with a very thick foreign acccent babbled at me. When I made her repeat it slowly, I learned that she was offering me free VIP tickets to the San Francisco Learning Annex Real Estate Wealth Expo. “I have no interest in that,” I told her. What do you suppose that was about?
I received an eamil inviting me to exhibit at some real estate expo a year or two ago. It named the other exhibitors who had signed up. I sent back an email declining to particiate in their “fraudfest.”
I have also heard that an honest speaker/exhibitor was at one real estate expo type gathering and was open about his disagreement with many of the other products and services being sold there. I further heard that the dishonest exhibitors there complained bitterly about this and theratened the sponsor with a boycott. And finally I heard that ever since, that sponsor runs all potential exhibitors/speakers by some sleazy Utah organization (See item #42 of my Real Estate B.S. Artist Detection Checklist for more on Utah-based real estate investment information organizations) to make sure they are all sufficiently scummy and that the exhibit floors and speaker rooms are not darkened by any more honest exhibitors or speakers.
Enjoy.
Ron LeGrand
$9,000 seminars. Gets people to attend live infomercials. I would love to charge $9,000 for a seminar, but I can't quote such a price and keep a straight face.
I listened to one of his tapes. It was the same old stuff all the other gurus preach. As is typical of other gurus, LeGrand left out much of the disadvantages of the various techniques. He also struck me as overbearing—which is irrelevant unless you are susceptible to being overly influenced by such people. When I get some time I will list some specifics here.
One of my readers told me “our distributor (Access) went bankrupt taking our money with them. It turned out that they were purchased by a company that also owned Ron Legrand’s BS factory six months before we took them on as a distributor.”
Another reader tells me LeGrand says he was once a carnival skeeball concession operator. Why am I not surprised? In general the gurus I do not recommend are salesmen, not real estate guys. Both carnival barkers and the majority of real-estate gurus are salesmen. Real estate investment requires far more than just sales skills. Telling people that you are a real-estate-investment expert, on the other hand, only requires sales skills.
David Lindahl (Rockland, MA)
On 2/25/06, he sent me a large post card pushing his free Teleseminar. It said on the front,
“Hear how one man owns over 810 apartment units, and hasn’t spoken to a tenant in over 4 years! Find out how you can cash in, too!” [Emphasis aded]
A tenant is a type of customer. Any businessman who avoids all contact with his customers is incompetent at best. Furthermore, the landlord-tenant relationship is special. When you provide someone’s home, you have additional moral, ethical, and legal obligations above and beyond those of a businessman who only provides, say, toothpicks to a customer.
You have responsibilities for the tenant’s health and safety and that of their family members and visitors. By providing him or her with a home, you are probably getting more of the tenant’s monthly income than any other firm they do business with. You owe your tenants a comparable and appropriate level of attention.
What, pray tell, is the name and location of this man who owns 810 apartments? His tenants should be asked if Lindahl’s statement is accurate. For one thing, when you make a representation in an advertisement, you must have a reasonable basis for it under the Federal Trade Commission Act. Someone should verify that the statement is true by tracking down the 810-unit owner and getting him and his tenants to go on the record that it is accurate.
Then there is the issue of that 810-unit owner getting sued for negligence. I can almost guarantee that if the plaintiff’s attorney finds out what Lindahl said, the landlord in question will be forced to read that statement to the jury at his trial. And I can guarantee that he will be sued. Anyone who owns more than a dozen or so units is likely to be sued by one or more tenants. 810 units? Forget about it. People who own that many units are probably being sued continuously by one tenant or another.
Lindahl’s return address is Massachusetts. That is one of the most anti-landlord states in the Union. A MA landlord who got caught making a statement—alng with the “cash in” comment like that might find an angry mob carrying torches and pitchforks in front of his stately abode. He would surely be quoted in the tenant newsletters
Then there is the issue of Lindahl himself. Is he a landlord? Most gurus claim to be. If so, does he also avoid contact with his tenants? Does he approve of not speaking to any of 810 tenants in over four years? The fact that he put it on the front of his post card strongly suggests that he does approve.
What if Lindahl himself gets sued for negligence by a tenant? I do not know how many units he owns if any. But if he owns any, it may not matter how many because he is depicting himself as a deep-pockets guy with his guru advertising. He is making himself an attractive litigation target. He, too, will be required to read that statement to the jury if he gets sued for negligence by a tenant. No doubt they will also make him read the other statement on the front of the post card—the one about making “a killing” from the tenants to whom certain landlords do not lower themselves to speak. How would the plaintiff’s attorney find out about it if Lindahl did not send them one of the post cards? They will Google Lindahl’s name and find this Web page. Then they will demand a copy of the post card during discovery.
Here’s a free property management tip from my book How to Manage Residential Property for Maximum Cash Flow and Resale Value. Find an excuse to call about one tenant per month per building. Use the list of questions in my book to ask the tenant about various aspects of the building and service you are providing. Put your name, address, and phone number on the exterior wall of your building’s office so tenants and prospective tenants can easily and quickly get in touch with you if they feel the need. When they call, use that same list of questions after you deal with their reason for calling.
That’s your name. Not the name of some employee or agent who has an incentive to keep you in the dark about problems you need to know about.
Here’s another free property management tip. If you don’t want to talk to tenants, stay the heck out of the landlord business. The responsible, competent landlords don’t want your kind giving them a bad name.
Here is an email I received from Lindahl and my response.
John,
I recently read your piece on me at your website.
The reason I have not talked to my tenants in over 4 years (it's actually 6 now) is because I use good qualitity managment companies to do that.
I am not a landlord, I leave that up to my managers. I'm an investor. As an investor, it's my job to grow my business and create more cash flows. I leave the managing to others.
I agree with you that our tenants are our "gold". And I run my business and teach my students accordingly. I let them know that all phone call must be returned the same day. All maintenenance request should be completed with in 72 hours with emergencies done within 24 hours.
I instruct my managers to provide a safe, clean and friendly place to live for my tenants. My managers show my tenants the respect they deserve.
As you know, tenant turn over is our biggest expense, therefore we have numerous tenant retention programs to reduce that number to it lowest levels.
For the first three and one half years of owning multi's, I was the manager. I took those phone calls on a daily basis and a lot of time, did the maintenance.
Though I learned that the more time I spend on my properties, the less time I had to grow my business so I switched to using property managers. I instruct my stu