John T. Reed's view of various real estate investment gurus

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.

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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:

Robert J. Abalos

I read his book on Investing in Land and generally liked it a lot. See the entry below regarding Bill Bronchick for mention of a lawsuit by Abalos against Bronchick.

John Adams—Unknown

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:

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 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.

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)

Gary Belsky and Thomas Gilovich

Click here to read my review of their book, Why Smart People Make Big Money Mistakes.

Steve Bergsman

Robert A. Blair, President of National Home Buyers Training Corporation

Sonny Bloch (deceased)

Bill Bowen—Unknown

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

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.

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.

Bronchick says his motion to dismiss was granted in Civil Case CO7-844RSL in Seattle on 6/23/08. That is the third case number I have seen in Bronchick/Abalos litigation. I ma not familiar with the case.

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.

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.

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)

Joel Cassway

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.

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. Reader’s Digest did a story about Cook and other gurus (the link is no longer active). 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.

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.

Russ Dalbey—Unknown

Robert Dahlstrom

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.

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

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”

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

Gary Eldred

Gayle B. Ellison

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.

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.

Foreclosurebargains.com

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

Fortune 21 (See also Success Magazine)

Dan Franklin

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.

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

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

Steven Good

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

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

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.

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

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."

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