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John T. Reed’s views of various real-estate-investment gurus Part 2

Posted by John Reed on

Russ Dalbey—Not recommended

Loan brokerage. “Winning in the Cash Flow Business” was the name he used for his program. Not my area of expertise. Use my Real Estate B.S. Artist Detection Checklist to evaluate this guru. Or read the Federal Trade Commission complaint against him. FTC sued Russell T. Dalbey;, DEI, LP; Dalbey Education Institute, LLC; IPME, LLP; Catherine L. Dalbey; and Marsha Kellogg. Kellogg provided a testimonial for Dalbey’s infomercial. She has settled out of Court with the FTC and agreed to cooperate with the FTC in their suits against the other defendants.

As usual in such cases, the FTC said Dalbey misled prospects about how much they could make, how fast, and how easily. FTC said spectacular testimonials were far from typical of Dalbey’s customers. Other chargse: false and unsubstantiated claims,most of Dalbey’s income fro the last twenty years came from selling advice on note investing, not note investing; income figures were cumulative over multiple years but depicted as from one year; violation of FTC telemarketing rules.

Here is an email I got:

Law360, New York (July 18, 2013, 3:03 PM ET) -- A Colorado couple accused of defrauding thousands of consumers through a supposed method of making money off seller-financed promissory notes agreed on Wednesday to pay the Federal Trade Commission and Colorado $330 million.

The FTC and the state of Colorado in 2011 sued Russell T. Dalbey and Catherine L. Dalbey, along with their companies, Dalbey Education Institute LLC, DEI LLLP and IPME LLLP, for allegedly violating the Telemarketing and Consumer Fraud and Abuse Prevention Act. In its complaint, the FTC said that since at least 1996,...

The Colorado Attorney General sent me this media release:

INFOMERCIAL CELEBRITY RUSS DALBEY MUST SURRENDER ASSETS IN $330 MILLION SETTLEMENT WITH COLORADO ATTORNEY GENERAL AND FEDERAL TRADE COMMISSION

07/31/2013
DENVER—Colorado Attorney General John W. Suthers today announced that his office and the Federal Trade Commission (FTC) have reached a settlement with Russell and Catherine Dalbey of Boulder for allegedly defrauding consumers with promises of making money by brokering seller-financed promissory notes or privately held mortgage loans. The two are now banned from telemarketing, selling business opportunities and producing or distributing infomercials.

“Using infomercials, print advertising, testimonials and telemarketing calls, the Dalbeys convinced nearly one million consumers to part with thousands of dollars and jump on board with their “Winning in the Cash Flow Business” wealth-building scheme,” said Suthers. “Together with the FTC, we have stopped the Dalbeys and their three companies from orchestrating their get-rich quick activities.”

Under the agreed-upon settlement, the Dalbeys must disclose their assets in sworn financial statements; repatriate all foreign assets; and cooperate fully as the FTC and the Colorado Attorney General’s office determine how much of an agreed-upon $330 million judgment they can pay. The judgment will be suspended upon the defendants’ surrender of those assets.

The settlement order bans the Dalbeys from telemarketing, from marketing or selling business opportunities, and from producing or distributing infomercials. The stipulated order also prohibits them from making deceptive claims about the efficacy, benefits, price, or availability of products, programs, or services, and it bars them from using deceptive endorsements or failing to disclose restrictions regarding any products, programs, or services.

According to the complaint, the infomercials, which oftentimes featured a celebrity endorser, made deceptive claims that consumers would experience quick and easy success using DEI’s three-step program: “Find ‘Em,” “List ‘Em,” and “Make Money.” The defendants’ claims were underscored by allegedly atypical, and sometimes false, testimonials from consumers who claimed to have made “$1.2 million in 30 days,” “$79,000 in a few hours,” and “$262,216 part time,” for example.

Consumers spent approximately $40 to $160 on the initial program and were later encouraged by telemarketers to spend hundreds or thousands of dollars more on additional products or services, such as multi-day seminars, coaching sessions, and promissory note holder lead lists, although very few made the money the Dalbeys promised they would, the complaint alleged.

The Colorado Attorney General and FTC charged one of the consumers who provided testimonials for the infomercial, Marsha Kellogg, with falsely claiming that she earned $79,975.01 from one promissory note transaction using the Dalbeys’ program, and that her total earnings were more than $134,000. Kellogg agreed to settle the charges in 2011.

Under a stipulated order against Russell Dalbey’s three companies – DEI, LLLP; Dalbey Education Institute, LLC; and IPME, LLLP – the companies are jointly and severally liable along with the Dalbeys for the $330 million judgment. The three companies ceased operations shortly after the Colorado Attorney General and the FTC filed their complaint. On September 21, 2011 the companies filed for Chapter 7 bankruptcy protection.

The FTC voted 4-0 to approve the stipulated order against Russell and Catherine Dalbey. The stipulated order against the Dalbeys was entered by the U.S. District Court for the District Colorado. Consent judgments have the force of law when approved and signed by the District Court judge.

The Colorado Consumer Fraud Unit works to prevent fraudulent, deceptive, and unfair business practices. In this matter, consumers should call 720-508-6888 or click http://www.coloradoattorneygeneral.gov/dalbey for more information or to file complaints.

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.

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.

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.

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.

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.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.

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 Afrikaan. Dutch settlers created South Africa. Afrikaan is a South African language similar to Dutch.

Here is an email I got on 5/14/12:

I have seen your website and the analysis of Dolf de Roos' book.

I am the liquidator of a company named Property Ventures Limited. This company was a property developer / investor. It is now insolvent owing as much as $NZ165 million with no assets left. De Roos was responsible for attracting a number of Americans into the company as an investors.

I attach my report for your interest.

If you are not game to open it you can find it on the official NZ Government website as follows http://www.business.govt.nz/companies/app/ui/pages/companies/878526/documents

If you want more information feel free to contact me.

Robert B Walker


www.robertbwalker.co.nz

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)

Dirty Talk (Tampa, FL)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.

I have no idea who these guys are or what they are about but they regularly send out an envelope containing their newsletter. It has a long list of people listed on the back of the envelope, including me. I did not give them permission to use my name. I told them to stop. They did not. The other people on the list include many who send me unsolicited emails that I delete without reading and many real estate gurus whom I do not recommend. It is illegal in California to use someone’s name in advertising without their permission. I conclude the people who produce Dirty Talk are some form of scum of the earth.

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 in Real Estate.

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)

Click here 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 paragraph 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 1996, a California jury said Givens had defrauded 29,000 customers in that state and ordered him to refund $14.1 million to them.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.

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
UPDATE: 1/7/09 - Steven Good found dead at 52

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.

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.

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.

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.

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.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.

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 other 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)

A Washington State judge ordered him to pay $3.2 million in restitution and fines to victims of his foreclosure rescue scheme. He was also teaching how to do that scheme in seminars for real estate investors. Seattle Post-Intelligencer article on the court order and copy of the court order itself.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. Here are some other links: http://www.atg.wa.gov/uploadedFiles/Home/News/Press_Releases/2009/kaiser%20fact%20sheet.pdf and http://www.atg.wa.gov/pressrelease.aspx?id=22822

Click here to see part 3 of this article.


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