John T. Reed’s views of various real-estate-investment gurus Part 1
Posted by John Reed on
Here is an alphabetical list of famous real estate investment gurus and seminar organizations along with information about them which investors may find of interest. Where I have a relevant product, it is mentioned and linked to the appropriate page. The Federal Trade Commission has a similar page although they are reluctant to name names, but they do identify red flags to watch for at FTC.gov.
- Real Estate B.S. Artist Detection checklist
- Who this page is for
- A few observations to make after ten years of reader feedback
- Why I created and maintain this page
- Real Estate Book Reviews by John T. Reed
By clicking on the guru in question, you can move quickly to the entry in question. When I got into real estate in 1967, there would only have been about ten gurus, all book authors, and all recommended. The all-recommended status continued until Nothing Down author Robert Allen came on the scene in 1979. Ever since, there has been an endless parade of B.S. artists coming into the real-estate-investment-advice field. Fake stories on infomercials. 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.
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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.
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.
Use my Real Estate B.S. Artist Detection Checklist to evaluate “unknown” gurus.
Ridiculous prices ($5,000) and numerous too-good-to-be-true promises. F'get about it.
Robert G. Allen (San Diego, CA)
Author of best-selling books Nothing Down, Creating Wealth, and The Challenge. One-time seminar guru and founder of many Robert Allen Nothing Down clubs around the U.S. Allen’s advice is generally terrible. Although I did like a chapter he wrote on property-wanted ads. Otherwise, he is little more than a financial publicity stunt man.
My book How to Buy Real Estate for Little or No Money Down photographically reproduces documents from his famous “Send me to any city” nothing-down deals. The L.A. Times accepted his “challenge” and made him do them in San Francisco which is near where I live. I went there and got all the documents on each of the seven deals. Some were also done in the county where I live.
On one, which was apparently typical, the documents seem to show that Allen lied to the first-mortgage lender—Bank of America—about whether there was any secondary financing (there was—a seller mortgage) and about his intention to occupy the San Francisco condo as his principal residence (He lived in Provo, UT at the time and never occupied the SF unit). At that time, June, 1981, when home mortgage interest rates were at 18%, Bank of America would only make loans to owner occupants and prohibited all secondary financing. I have their loan policy for the date in question in the book, too. My wife was a loan officer for Bank of America at the time. [Note to bogus gurus: do not brag about deals that you do not want me to look into—especially in the San Francisco area. John T. Reed].
At best, you would have negative cash flow following his books. At worst, you would go bankrupt and wind up in jail. He doesn’t put it this way, but his nothing-down techniques almost all require you to mislead an institutional lender or take advantage of an unsophisticated seller or both. The president of his Atlanta Robert Allen Nothing Down Club literally went to federal prison (at Eglin AFB, FL) for doing illegal nothing-down deals. There is virtually nothing in his material about how to make a profit. Rather he simply assumes that real estate goes up so much every year that you need only buy it to cash in. Click here for a little story about his association with probate guru Jim Banks.
Allen himself got into financial difficulty with the IRS as early as 1984. In 1986, IRS filed a $346,395.79 lien against Allen. In September of 1987, when I wrote an article exposing his financial difficulties, he also had:
- another $65,649.90 IRS lien
- more than $76,000 of delinquent tax warrants filed by the State of Utah
- lawsuits and judgments regarding over $100,000 in unpaid fees to fellow gurus who spoke at his meetings
Allen declared Chapter 7 (total liquidation used when the bankrupt has a negative net worth) bankruptcy in San Diego on July 10, 1996 (Bankruptcy Petition #96-09323-LA). Bankruptcy creditors sometimes get pennies or nickels on the dollar. According toAllen’s bankruptcy papers, his creditors got nothing. The Initial Meeting of Creditors was held on August 9, 1996. A lawyer tells me that Allen would have been asked quesitons under oath about his assets during that meeting. A copy of the transcript of that meeting would be interesting. It would typically be in the case folder. See my 8/96 article.
The Allen’s attorney, Richard V. Vermazen, got $2,000 to handle their bankruptcy according to court papers. The Allen’s were discharged from their debts on 10/17/96. The case was closed with no distribution to the creditors on 10/31/96.
American Express Optima CardThe creditors who were stiffed in the bankruptcy file were:
- Bank of New York
- Citibank Visa
- Farmers InsuranceGroup (San Diego)
- Ferrette & Slater ALLC (San Diego)
- Franchise Tax Board (California income tax)
- Internal Revenue Service
- John Graff (Highland, UT)
- Mark IV Properties (San Diego)
- McKay, Burton, Thurman (Salt Lake City)
- Neiman Marcus
- Scalley & Reading APC (Salt Lake City)
- Scott Meredith Agency (New York city)
- Shirl and Gail Loveless (Provo, UT)
- Simon & Schuster (New York City)
- The Broadway (Phoenix)
The Allens may have had other creditors. These were the only ones listed in the bankruptcy court files. Now that Allen is running full-page ads touting his financial skills in theTwenty-First Century, one wonders if he has gone back and paid these creditors like his fellow Provo guru Howard Ruff did after his post-bankruptcy financial rebirth. No one has contacted me to say that he did pay off the creditors he stiffed in the bankruptcy.
In what must have been a weak moment when I was interviewing him for the ’87 article, Allen told me I, “do a great job and that I keep guys like him honest.” I have it on tape (with his knowledge and permission). I won’t take credit for keeping him honest—or give anyone else credit for doing that.
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.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.
Garrison: “I m concerned that our students are not using the real estate investment information we’re teaching them after the course is over.”
Allen: (wearily) “We’re not in the real estate investmet information business, Marc. This is show business.”
If you paid thousands of dollars for one or more of Allen’s courses, I hope you enjoyed the “show.” Although I suspect you could have gotten more entertainment at the hottest play or musical on Broadway for a lot less.
Click here to read an email from one of his seminar graduates.
On 9/4/02, a reader told me Allen was back to 65% real estate in his current seminar.
I 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.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.
Rich Arzaga, San Ramon, CA
Rich Arzaga, CFP®, CCIM, San Ramon CA
Teaches a 10-night course at University of California, Berkeley extension in San Francisco and Berkeley. Many of the principals covered in classes to earn the CCIM designation are reviewed and applied during this class. 925-824-2880.
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."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.
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.
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 infomercial products from anywhere with the possible exception of record collections. I have tried to dissuade 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.
On 7/22/09, I heard that the FTC sued Beck and others for $300 million. I was not surprised. When John got involved in the infomercial-Utah telemarketer world, I strongly urged him to reconsider. To no avail. And on 5/17/12, I received this:
Grand Scale Deception
The FTC has won a judgment against a massive infomercial scam that allegedly deceived almost a million people out of more than $450 million. The marketers behind infomercials for John Beck's Free & Clear Real Estate System, John Alexander's Real Estate Riches in 14 Days, and Jeff Paul's Shortcuts to Internet Millions promised big returns for the price of $39.95, the FTC said. But fewer than one percent of the buyers made any profit, and many people found themselves enrolled in programs that charged them every month, the court found. The defendants also pitched personal coaching services for up to $14,995, claiming people would easily earn back the cost. But almost everyone who paid for coaching lost money. Read Ads for Business Opportunities: How To Detect Deception.
I received this on 6/3/12 It says the FTC won their case against John and others on summary judgment (no need for a trial)
And here is the FTC media release summarizing the case and its result.
Here is a Reuters story saying that John Beck has been ordered to pay a fine of $113 million.
Most of us who knew John are very sad about this. He was a great guy before he got involved with Utah.
On 2/9/16, he disappeared. Here is what I said on Facebook:
John N. Beck II mysteriously disappeared 2/9 around noon at Land’s End in San Francisco. Land’s End is the shoulder of land that juts out into the Pacific Ocean from the south end of the Golden Gate Bridge. This has been in the local print and TV media since 2/9. A reader asked me to comment.
I have known Beck since 1977 as a friend, colleague, and, until about 2005, a quiet ally in my crusade against the get-rich-quick, real-estate investment, infomercial crowd. In 2005, he went over to the other side and became one of the infomercial guys. After talking to him about it a number of times, I was forced to reverse my strong recommendation of him and recommend that my readers NOT purchase his infomercial stuff.
See my guru-rating page: http://www.johntreed.com/…/61653315-john-t-reed-s-views-of-…
Generally, neither the media nor the prosecutors do enough against this crowd. But they do go after a few of them. Ironically, Beck, who was one of the good guys from the mid-seventies to the mid-2000s, was one of the ones they went after hard. The FTC won a $479 million judgment against Beck and some related defendants. Beck was required to pay $133 million of the judgment personally. He promptly declared bankruptcy.
He is also appealing the summary judgment verdict in the FTC matter. If I understand correctly, he is about to lose the home he lived in for the last 40 years or so in Alameda, CA. The media seems to speculate that he was discombobulated by the suit and bankruptcy proceedings.
Give me a break! Beck had a JD and an MBA in management and accounting. He wrote multiple books and taught classes on various distress sales opportunities including foreclosures and bankruptcies. For years, he had a newsletter titled The Distress Sales Report. He is the last guy in CA who would get rattled by this stuff.
There is concern that he committed suicide, but no suicide note. There is suspicion he disappeared to avoid paying the $113 million debt.
As his friend and a friend of his wife Joyce—not that we’ve had any contact since the mid-2000s—I hope he is alive and well. That causes me to be disinclined to believe the suicide theory. Also, there are two photos of him going to Land’s End on 2/9, In both, he is carrying a bulging shoulder bag.
You don’t need a bulging shoulder bag to commit suicide. You WOULD need such a bag full of a change of clothes and maybe a facial disguise to disappear perhaps leave the country.
If the bankruptcy court knows about all his assets, which he is supposed to tell them about by law, then he has no need to flee the country. He gets the exempt home equity ($175,000 in CA for a married senior), his pension plans, and assorted smaller items like workman’s tools when the bankruptcy is finalized. Whether he owes $113 Million or $113 Billion is utterly irrelevant. It all disappears in bankruptcy.
But back in the day, Beck extensively researched asset protection by use of offshore havens. He visited Europe investigating some and the South Pacific investigating others. He decided not to write a book about it because he said only multimillionaires could afford the hassles of doing it. But that doesn’t mean he forgot all his research taught him, especially when he came into multimillions as an infomercial star.
The family and media seem to take comfort from the fact that his US passport is still in his desk at home. I take no comfort from that. If he fled the country, using that passport would get him arrested immediately. He would use a fake ID and passport to flee the country and this sort of stuff would have come up in his research of offshore asset-protection havens. See my guru rating of Bill Greene, another guru who disappeared during dealings with the legal authorities.
I hope he is currently sipping a mai tai on the beach of some asset-protection-haven island. Not that I condone either infomercial millions or disappearing to avoid paying your creditors, I just don’t want him dead and this seems to be the only scenario to explain his disappearance that leaves him alive. Guru William McCorkle—see my guru rating on him—pulled this off, after he got out of jail.
Here is a
Note that Beck is the FOURTH guru on my list to disappear under similar circumstances. The others are Michael Martin, Richard Gardiner, and Bill “Tycoon” Greene. I knew Gardiner and Greene. So did Beck.
Moved to Iowa to be near Mahareshi Yogi transcendental meditation. Shut down by attorney general for not paying refunds. The Wisconsin state Bureau of Consumer Protection published a Guide for Wisconsin TV stations which lists several "Questionable infomercials," among them those of Ed Beckley's Home Business Technologies. See also David Martin's letter.
John Behle (Salt Lake City)
Here is an item I posted on Behle on 4/16/99:
"Behle once tried to rent my mailing list. I refused to let him because I thought the advertising piece he wanted to send was misleading. It was made to look like a newspaper article and had a post-it note on it that looked like it came from a friend. It was signed "John B." I had received the same piece myself previously and called my friend John Beck to ask if he had sent it. That's when I first heard of John Behle."Behle responded (4/17/99):
My (John T. Reed's) response (4/17/99) to John Behle’s email:
“Stabbed! - The latest victim
I had been so thrilled to stay off John T. Reed's hit list. He doesn't have a competing book about paper, so I thought I might be safe. Apparently someone inquired and now his faulty memory and facts have colored me too. It's not a big deal, just not true. I left a message on his voice mail which since it wasn't ‘worshipful’ will probably lead to further attacks. I guess I knew it was just a matter of time. Here's the scoop - I mean poop.
I’ve never tried to rent John's list. He has nothing to do with paper and wouldn’t be an interesting list for me anyway. The only list I've ever rented in my life is Creative Real Estate Magazine (a couple times).
I doubt John cares about facts, but the letter/ad he is referring to was developed and marketed by a company named Unicorp or Millionaire Consulting Service. They marketed a consulting service for Bob Allen and Mark Haroldsen.
I sued them and won over the fact that they used their infamous “John B” letter as they called it. Nothing in the letter ever mentioned me or referred to me, yet in a marketing script that we uncovered it mentioned that if they thought it was a friend or relative that had sent it to not disagree with that. If they were upset or enquired (sic) as to who sent it, the marketer was told to say that it came from John Behle in their marketing department. I never had anything to do with their marketing department. For a few months I helped out in doing some training for their consulting staff and handling the most difficult consulting situations.
I sued them because many people did assume the letter came from me. At that time about 100,000 people per month had been reading the magazine articles I wrote for many different publications and my name was the first to come to many people's minds. They mailed out tens of thousands of these ads per week and just about anyone with the name “John B” paid the price. Chuck Abbot, Doug Holmes and Richard Allen that developed the ad said that they chose that name because almost anyone knew a "John B". I sued for $750,000 in damages and because they didn't have a leg to stand on, they settled. I just wanted an apology, the cessation of any use of my name and just to rub Doug's nose in it a little, I received rights to use his mailing list (total junk), the Unicorp mailing list and had him sign a letter to clear up falsehoods that they had spread among their employees. I'm not a real vindictive person, so I didn't mail the letter. I guess I should have. Anybody want a 10 year old 30,000 name mailing list from a consulting service?
Once again, John T. Reed’s facts are messed up. Hopefully he will show his intentions are honorable and clear it up. What do you wanna bet?
JOHN T. REED - I DO NOT RECOMMEND HIS RECOMMENDATIONS
From what I’ve heard, his books are very worthwhile reading, his opinions of others in many cases are flawed.”
I stand corrected. I was wrong. My apologies to John.
Gary Belsky and Thomas Gilovich
Click here to read my review of their book, Why Smart People Make Big Money Mistakes.
Here is a review of his book Maverick Real Estate Investing
Robert A. Blair, President of National Home Buyers Training Corporation
I am told they charge thousands of dollars for seminars. See my article on expensive seminars.
Sonny Bloch (deceased)
Radio and book guru. Sent to prison for income-tax evasion. Died in 1998.
I recommend that you use my Real Estate B.S. Artist Detection Checklist to evaluate this guru.
Scott Britton—University of Real Estate Letter
According to a promotional mailing I received, he sells a video in which you learn how to "make $10,000 in 98 days." $10,000 divided by 98 = $102.04 per day or $102.04 divided by eight hours = $12.76 per hour. According to my local want ads, you can make that much in jobs like the following: driver, chauffeur, customer service, child care site supervisor, carpet cleaner. Britton's way of making the $12.76 a hour is rehabbing buildings that you must buy, rehab, then sell to get your money. There is far less risk and effort in a customer-service job.
I disagree with him on due-on-sale clauses. See my article on the subject. I also reviewed a book he co-authored on flipping.
Abalos v. BronchickHere is an item that relates to Bronchick from my 6/07 Real Estate Investor’s Monthly newsletter.
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.
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.
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.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.https://www.colorado.gov/pacific/dora/bronchick-civil-charges-securities-fraud
Here are two accounts of Bronchick being sued by the State of Colorado on 6/2/17:
Here is a story that is about an Arkansas apartment building that Bronchick reportedly owned. I have not yet confirmed that.
And a court order in another 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.
In general, however, his writing are rock solid.
Larry Burkett died 7/4/03
Author of Business By The Book, The Complete Guide of Biblical Principles for the Workplace and Using Your Money Wisely, Biblical Principles Under Scrutiny. Many people believe the Bible is the word of God. It turns out, there is considerable discussion of financial matters in the Bible. Larry Burkett is a sort of combination Bible fan and personal finance/business guru. His books give his interpretation of what the Bible says about various financial issues.
I do not disclose my religious beliefs. Nor do I tell other people what religion they should join. I leave that to people like Robert “Did I tell you I was a missionary” Allen. (A missionary is someone who tells you that you are in the wrong religion, he is in the right one, and that you should switch to his. That’s Part I. In Part II, he tells you that you must send 10% or some such of your income to his religion’s headquarters for the rest of your life if you buy Part I.)
Having said that, however, I must add that I welcome ethical analysis of the various approaches to real-estate investment. There is far too little ethical discussion in the real estate business. Whether the Bible is THE Good Book is something for you to decide. However, I do not think there is any question that it is A good book in many respects as far as ethics are concerned.
The code of ethics I recommend is
- Tell the truth
- Keep your promises
- Treat others the way you want to be treated
Also, in real-estate transactions, I believe you are not ethical unless you require that persons with whom you do deals meet appropriate suitability standards. Almost no one does and most of the nothing-down and lease-option approaches now being pushed by various gurus fail those ethical standards. My Real Estate B.S. Artist Detection Checklist also offers detailed ethical standards for real-estate gurus.
In short, while I may not agree with every point Burkett makes, in general, most investors would benefit from study of the ethical implications of various real estate and business techniques whether it be based on the Bible, the Koran, or other popular religious or secular teachings.
John Burley (Glendale, AZ)—Unknown
I recommend that you use my Real Estate B.S. Artist Detection Checklist to evaluate this guru. I am told he appeared with Robert Kiyosaki in Australia. I would not have done that. His Web site is rather brief and vague, but still manages many hits on item #20 of my BS detection checklist, for example, when he refers to his “automatic system for Creating Wealth.” Says he “retired” at age 32. So what’s with the making speeches in Australia and selling products and “boot camps” off a Web site. He’s hustling a buck pretty hard for a retired guy. Few retired people have Web sites, and those that do only have family news and photos.
Cash Flow Generator (Cape Coral, FL)
Owned by Russ Whitney last I heard. See my extensive articles on him.
Too expensive for my tastes. Worked with Givens and Pino.
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.
Uses the business name Mentor Financial Group, LLC. The purpose of an LLC (limited liability company) is to make it harder for you to sue the owners of the company in question successfully. Use my Real Estate B.S. Artist Detection Checklist to evaluate this guru. Advocates use of lease options. See my article on that subject. His Web site says Mentor Financial is “Registered by the Colorado Secretary of State’s office as a company in good standing…” That seems to imply some sort of approval or endorsement by the state. In fact, all corporations and LLCs are required to register with the secretary of state’s office. That’s about as meaningful as my saying I am “Registered by the California Department of Motor Vehicles as a vehicle owner in good standing.” The products on his Web site sound like the same old mix of nothing down, lease option, etc. that so many other gurus are pushing.
No longer associated with David Finkel. Now Explosive-Cash-Flow.
Wade Cook (Seattle, WA)
Real Estate Money Machine author. He has declared bankruptcy multiple times, has unpaid fines levied against him by state attorneys general, has been the subject of cease-and-desist orders from attorneys general, has taken the Fifth Amendment in court, and has been indicted. Smart Money magazine did an extensive article (“Wade’s World”) on his financial and legal difficulties in October 1996. Call 800-925-0485 for a copy. The State of Texas went after Cook on 5/1/98. While you are at the FTC Web site, you may want to search around for other pertinent information. I suggest you bookmark my site before you do so you do not have to hit “back” a zillion times to find your way back. 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.
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.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.
Cook is a best-selling author (Wall Street Money Machine) and also wrote Real Estate Money Machine previously. He is one of a number of best-selling financial authors who make that list, in large part, a rogue’s gallery. The many people who buy Cook’s books and attend his seminars are idiots. I have talked to some on the phone. When they ask about him, I recite all his legal troubles, including his bankruptcies. They then ask what I think of his latest book. Like I said, idiots.
On 12/19/02, Wade Cook Financial Services was put into involuntary Chapter 7 liquidation bankruptcy (Case No. 02-25434) in the U.S. Bankruptcy Court of the Western District of Washington. On 1/17/03, this was converted to a Chapter 22 reorganization bankruptcy on 1/17/03. When I did a search to confirm this, I typed Wade Cook bankruptcy into Google and immediately got the pertinent Web page of the Western District of Washington U.S. Bankruptcy Court Web site.
There is a story about it at http://seattletimes.nwsource.com/html/businesstechnology/134686071_wadecook30.html.
Here is an article I wrote about Cook’s being indicted for tax fraud in 2005.
On 2/20/07, a federal jury in Seattle found Cook guilty on seven of eight criminal charges of not paying taxes due on $8.9 million of income from 1998 to 2000. The jury was unable to come a verdict on the eighth charge, tax fraud, and on any of the charges against Cook’s wife. At the time of the verdicts, the U.S. Attorney’s office was unable to say whether they would retry Cook’s wife or the tax fraud count against Cook.
On August 2, 2007, U.S. District Court Judge Thomas Zilly sentenced Wade Cook to seven years and four months in prison and his wife Laura to 18 months in prison. Laura pled cuiilty to obstruction of the IRS to avoid a second trial. The judge also ordered the Cooks to pay $3.75 million in back taxes. See the Seattle Times story at http://seattletimes.nwsource.com/html/localnews/2003819531_wadecook03m.html. The federal judge noted that Wade Cook had previously had to pay more than $500,000 in fines and restitution for investment fraud in Arizona, $4 million in back taxes in a prior case, and $2.7 million in judgments because of Federal Trade Commission action against him in 14 states.
At one point, Cook had four financial advice books on the New York Times best seller list. See my article about the rogues gallery that is the financial best seller list.
Click here to go to Part 2 of this article.
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