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My guru-rating page often elicits email from visitors who desperately want to believe in a particular guru. Even though I have refuted what the guru says, the visitors say, "But they have all those testimonials from average people who got rich using the course. Are you saying those people are lying? The government wouldn't let them get away with that!" Oh, yes they would and they do.
In fact, I do believe that the vast majority of testimonials seen on real estate investment TV infomercials and in promotional video tapes are lies. Specifically, I believe an investigation would find:
Experts in the infomercial business say that the infomercial must tell about a magical transformation that will happen to you if you buy. To do that, they present fake testimonial givers who claim their lives have been magically transformed. There is no such thing as magic. Wherever there appears to be magic, it is merely a tricka magic trick.
If someone would ever sue one of the bad gurus big time, they should also name as defendants the producer of the infomercial, the TV stations that ran it, the newspapers that ran ads for it, the commissioned speaker at the free seminar who talked the victims into signing up for paid seminars, and the persons who provided phony testimonials for the infomercial.
On 5/19/99, NBC TVs Dateline did such an investigation of William J. McCorkle. They found exactly what I just described above.
Henceforth, I am going to post guru testimonials on this Web page and invite readers who know anything about the individual in question to tell me what they know.
|Guru||Person giving testimonial||Claim made in the testimonial||Comment|
|William J. McCorkle||Eddie Tyson||broke...behind on mortgage and car payments...wife left me...made $16,000 part time...in less than a year||Professional actor and Bill Clinton impersonator. Friend of McCorkle. Was never broke or behind in payments. Wife never left him. Never took course or invested in real estate|
|Sharon O'Brien||Used to live paycheck to paycheck...whole life changed...I was selling shoes to older people...I was a secretary||Professional actress. Real name: Sheila Chismar. Paid $20 for her testimonial. Never invested in real estate or owned a BMW or Jaguar|
|Leonard Olmer||Made a lot of money with [McCorkle]...approximately $40,000 or more per year||Dateline implied this guy testified against McCorkle at his trial|
|William J. McCorkle||We were evicted from our home||He never lived in the home shown on TV and was never evicted from any home|
|Unnamed black woman||I used to be a hairdresser||Professional actress|
Fort Pierce, FL
|Made $11,500 with six hours work in partner deal with McCorkle||Made the money but McCorkle put up no money. Sondergeld says he never did another deal.|
|Carleton Sheets||Unnamed heavy set man with beard||(Pointing to six houses on a street) I own this one, this one, this one, etc.|
|Unnamed woman||(Pointing to list of 13 properties on a white board) These are all our properties listed...|
|Jackie||(Pointing to map marked with 15 large dots) Over here I have a map of the city with all of my properties...my net worth is now $491,203...almost a half million dollars in a year and a half...$69,336 a year spendable cash flow||Those numbers add up to a 14% return on equity which is extremely high for rental real estate. Such returns are generally only seen in extremely depressed areas, like Anchorage, Alaska in the late '80s, where local people believe the regional economy is permanently down and consequently, they are willing to pay more to rent than it would cost them to own the same property. To make $491,203 in 18 months at a full-time job, you would need a salary of $163.73 per hour., an unlikely amount to be made by a beginning real estate investor. Gurus imply that real estate investment is not a full-time job. if it were half-time, this woman made $327.47 per hour in her first 18 months in the real estate business, plus the property's very high cash flow. She should write a book. Even Sheets himself has not claimed he made that kind of money per hour.|
|Unnamed heavy set woman||She says to her husband, The CDs, for my anniversary. I want the CDs.||A reader sent me an email saying, I saw her on a TV show (I cannot remember which one, but I believe the Discover Channel) which showed a re-creation of an investigation and she played the role of a neighbor.|
|Uncertain which guru is using this guy||Danny Smith||Supposedly a high school dropout who lived with his parents and bought 300 houses within seven years after taking Sheets' (or DelDotto's?) course.||I do not believe it. One reader called this "a real estate guru urban legend." I actually know a guy who bought 300 houses. He is a rompin' stompin' hard-charging SOB. He graduated from college, played a professional sport, runs a successful business, and has 300 houses because of a special niche he got into. No high-school dropout who lived with his parents as an adult ever did this. I defy anyone to produce this "Danny Smith."|
I thought it was funny that McCorkle's testimonial people often held up fists full of checks they said they got as a result of using McCorkle's teachings. When were they planning on depositing those checks in their bank accounts? More recently, they brandish photocopies of the checks. Do you suppose that is a result of this Web page?
In a debate with Matt Fletcher on an Internet news group, Fletcher expressed skepticism that Tacoma, WA-based Kaiser had bought many properties. Kaiser responded thusly:
Unfortunately, it's Sunday and I won't be heading into the office, but off the top of my head, here's what we've picked up in the last couple weeks . . .
9051 Ridgeview, Tacoma, WA - $156k
The QuarterDeck Restaurant, Wheaton Way, Bremerton, WA $330k
1431 South 51st Street, Tacoma, WA $120k
12-14 Mosher Hill, Hudson Falls, NY $65k
7 Melony Lane, Hudson Falls, NY $85k
190 Broadway, Fort Edward NY $90k
13 Dixon Ct, Queensbury, NY $130k
32 Richardson St., Queensbury, NY $120k
23 Sunset Avenue, Queensbury, NY $120k
16 Twin Channels, Queensbury, NY $100k
18-20 Hickory Cir, Gansevoort, NY $125k
30-32 Hickory Cir, Gansevoort,NY $135k
87 Stark Road, Corinth, NY $100k
89 Stark Road, Corinth, NY $150k
860 Cran Street, Schenectady, NY $65k
190 Hans Creek, Providence, NY $65k
All for sale, by the way. If you (or anyone else, for that matter) see something you like, please email me for details. I can make you one heck of a deal here.
Fletcher then asked real-estate people in New York state if any of them could check out Kaisers list of acquisitions. One did and said that Kaiser did not buy any of those properties. I contacted Kaiser and he admitted that was correct. Indications are he had some kind of agreement to buy these from one owner, then backed out of the deal. Fletcher says the Quarterdeck restaurant was bought by some group and he was unable to confirm what role Kaiser had in that group. He also said there were questions about the restaurants soil and structure and whether it would have continued access to its parking which is on a separate parcel owned by someone else.
Heres an email I got from another visitor to my site.
Subject: Your Fabulous Site!
Date: Tue, 09 Jan 2001 03:51:10 -0700
Hello Mr. Reed --I just stumbled onto your site tonight, and have been amazed and delighted! Since pretty much all of my REI info over the years has come from the, uh, BAD people on your list of investment gurus, I have spent the last hour or so just absolutely mesmerized with the wealth of solid information you provide.
Btw, one guru that I did not see listed was a guy named Al Rotola or Al Rotolla. He was an absolute fraud that I bought a "course" from about ten years ago from a series of late-night infomercials he had. For some reason, I've done searches on the net, and can't find a single mention of him anywhere -- it's weird. I KNOW that was his name. Maybe it rings a bell..? Anyway, his course was something about how to be a "foreclosure trustee." He was this fat, bearded man who seemed SO sincere and nice...
When his materials arrived, it consisted of some forms and a couple of flimsy manuals that seemed like they were written by a six-year-old, told meandering stories about his life, and hinted at what a "foreclosure trustee" could do, but never actually explained how to do anything. (One of the "chapters" was three pages, double-spaced, entitled "99 + <plus> Business You Can Start" -- and he listed 100.) One of the people on the infomercial was this older man with curly grey hair who owned an independent Paralegal service in South Carolina or somewhere. This guy was raving about the course, saying, "Al, even if all I got were the legal forms you include in the course, that would be worth every penny!" Well, I tracked this paralegal down and called him on the phone to ask him what the deal was, and he said in this Southern drawl, "Are you calling about the infomercial?" I said yes, and he replied, "Listen, he is nothing but a crook. I never gave him permission to use those clips, and now he can't be found anywhere, so just save your money, it's all worthless."
Just thought you might be interested.
Anyway, sorry to take up your time, but your site was fantastically informative and helpful. Thanks.” Seth Parker
Here is an odd exchange of emails I had with a person who claims to be a successful real-estate investor as a result of following Carleton Sheets advice. I do not believe him. I would appreciate it if someone could tell me Matts last name and what state and county he invests in. I will then post that information here so readers in that area can look him and his millions up in the grantee index next time they are in the county recorders office.
On 5/30/01, "Clyde W. Norman" wrote:
I was directed to your web site about carleton sheets from a student. I'm have been a student of Mr. Sheets since 1990 and have made millions. I challenge you to and your negative attitude to any thing you say does not work.
Name the time and place!!!
On 6/2/01, "John T. Reed" wrote:
Please send me the addresses of the properties you bought using Mr. Sheetss advice.
John T. Reed
On 6/3/01, "Clyde W. Norman" wrote:
First of all who are you and why would I send addresses to a total
stranger! I have the cameras and the challenge........... Put yourself in
front of our cameras and lets get it on!!!!!
On 10/12/01 Clyde W. Norman wrote me saying he did not send the above emails. He suspects a neighbors child whom he chided for buying Sheets material.
My favorite bad guru testimonial is on the back cover of Robert Allens best-selling book Nothing Down. It says, The best investment we ever made. Robert Allens course has completely changed our life and the lives of many people in our city. And here is an item about that same testimonial giver from the 1/87 issue of my newsletter, Real Estate Investors Monthly. His name was on the original book and in my original article. I leave it off here because he may have become a private person in the interim.
Former Nothing Down club president gets prison term
A former president of the Atlanta Robert Allen Nothing Down Club and contributor to Real Estate Advisor newsletter, pled guilty to filing false statements with a bank to persuade them to make mortgage loans on properties he was selling.
The bank was told the buyers were making down payments. But many investors were told that the club president would return their down payments to the buyers after closing. He also had employees write false leases on vacant apartments. Many of the properties have gone into foreclosure. The club president was sentenced to 30 months in federal prison and ordered to make restitution of $1.4 million. The Atlanta Assistant U.S. Attorney said, There is a continuing investigation pertaining to numerous individuals that may have been involved in these matters.
I guess he was right about Robert Allens course completely changing his life. If you buy stuff from the TV infomercial gurus because you are impressed by their testimonials, you, too, may have your life changed.