Reader comments sent to John T. Reed about Russ Whitney John T. Reed on real-estate-investment information "John, I was searching on anything regarding Russ Whitney when I ran across the letter sent to you from Kevin Dean. I attended a Russ Whitney seminar in Reno NV last August and was taken for $1,590 in the process. It was 3 days of commercials for the WIN Boot camps that cost anywhere from $6,000 to $28,000!! The speaker was "Doc" Blake (real slick) who is nothing other than a sham artist. He deferred questions ultimately not answering many of them. Eight of us who attended have stayed in touch. All are extremely disappointed and angry. My attempts to rectify any of this with the Whitney group have been fruitless. Several of us received a letter stating that they were aware that things in Reno were not run so well so they offered ANOTHER 3 day seminar in October to those who wanted to attend. I received my letter 2 days before the scheduled seminar, not that I would have gone anyway. I wrote to a Stephanie Whiffen at Russ Whitney's office thanking her for the offer but told her that I had such a terrible experience the first time around that I couldn't imagine going through that again. I sent back all of my seminar materials (many untouched). They refused the package and sent it back to me with postage due. The whole experience with Russ Whitney has been a nightmare. I would recommend to anyone who is considering attending one of his promotions to stear clear at all costs. They employ every trick in the book including deception, bait and switch, false advertising and flat out lieing. Caveat emptor. They are quick to take your money but don't give a damn about you. We are now in touch with the 20/20 news magazine with hopes that they will look into this guy. One last note..."Doc" Blake actually told our group to take two items when going to inspect a vacant property; 1) a marble to see whether the floors were level and 2) a hammer which would come in handy if when carrying it in your hand you just happened to slip and break a window. Voila, instant entry if doors and windows are locked. That is the honest to God truth!!!!" Regards, Ed Moore "I have had some experience with Russ Whitney. I bought both his book, "Building Wealth" and his tape course. I can't talk about how the information worked for me because I never did go out and try to by a home but I feel my comments may be of value to your page. Whitney's book contains numbers that make real estate look very profitable. He recommends starting a property management company and says this technique made him over $100,000 a year. His course contains some of the same exact numbers from the book (the one example of numbers for a house you can make money from that is in the course is directly lifted from the book). He talkes about his "bird dog" program where he says he will put up money for deals his students around the country will bring him. He talks about one young man he did this with who was able to make more money from the house in income than he had been making at his job. Whitney recommends some ethically questionable techniques like lying to your banker. [Note from John T. Reed: Lying to your banker is not "questionable." It is unethical, immoral, and illegal"”a felony.] He teaches a technique similar to one in Carleton Sheets course which involves building up a line of credit at a number of banks by opening a savings account, borrowing against the money in the savings account and paying the loan off early. The idea is that after doing this a couple of times, you will build credit experience with the bank and the bank will allow you to borrow money unsecured. In turn, you can use this unsecured loan to make a downpayment on a property. The part where he advocates lying is when the banker asks you why you want to borrow against money you have in a savings account. He says your answer should be something like, "I want to use the money to pay some bills". If I remember correctly, the tapes that come with the course are pretty much a repeat of what's in the manuals but there may be some different information on them. The numbers he shows look really good and the logical conclusion of reading his book is that it is pretty easy to make a fortune in real estate. The heart of the course involves buying cosmetically distressed properties from distressed sellers and clearning them up. Whitney says you can increase the home significantly-- in the example he gives he invests something like $2000 in cosmetic improvements like painting and cleaning, and increases the value of the home by something like $10,000 or $20,000. From my mother's experience in buying rental properties (20 of them), I would have to conclude that investing in real estate is much harder than Whitney makes it seem and the numbers are almost never as good as he portrays them. Hope my letter was helpful to you. Sincerely, Hadar Shapir "Dear Mr. Reed, I want to thank you for helping me avoid a costly mistake. My fiance and I attended one of Russ Whitney's free seminars. We were not suprised that it was simply a pitch for another, more expensive seminar. However we were shocked by the price ($1600)! We talked it over during the break and decided to attend. Here is a breakdown of the proceedings day by day. Day 1 The morning was spent "helping" people learn how to raise their credit limits and lower the interest rates on their credit cards. The excitement was fueled through the use of a game in which the person with the highest point total at the end of the seminar would win an "exclusive package" of books and tapes from WIN Systems. After lunch we were given a packet of papers that was 90% motivational and 10% possibly factual. The only thing of note in the packet was an article that claimed to tell you how to beat the due-on-sale clause. [Note from John T. Reed: See my article "The truth about getting around due-on-sale clauses."] The instructor continued with more vague techniques. Day 2 Today was the day we got "back-ended". Again we recieved another useless packet. Just before lunch we were given a printed glossy catalogue listing all the "boot-camps" and services that were alos offered. We started to worry when we saw that there were no prices anywhere inside. When we got back from lunch they hit us with the prices...anywhere from $7490.00 to $43,260.00 (or $6490.00 to $28,390.00 if you took advantage of the "seminar discount"). We were angry, to say the least. When we got home that night I started doing some research on the web. That is how I found your page. Day 3 We didn't learn much on this day. We were still mad about being given the run-around and
mad at ourselves for having been taken in to begin with. We were just sick as we watched people file to the back of the room and sign up for the high priced classes. Most of them payed with their credit cards. Now we knew why we were encouraged to get our limits raised. We stayed through to the end since we had already paid (been fleeced). On the plus side we did meet some other investors who felt the same as we did about the weekend. We keep in touch and encourage each other. Also, there was a software package that was offered at the seminar. It was GARBAGE! It contained nothing that could not be found at a good office supply store for 1/10 of the price. (they wanted $1995.00 + tax) The instructor, a fellow named Patrick J. Hutton, claimed that "WIN Systems had spent alot of money to make sure that these documents were legal in all 50 states." Nowhere in the shoddy three-ring binder that was supposed to pass for documentation, was that claim printed. Mr. Reed, if this will help persuade even one person from getting involved with these people, please feel free to post any or all of this letter on your site. I still have the materials that were given to us at the seminar if you would like copies. Sincerely, Jeff Trudeau "Dear Mr. Reed, I am writing you concerning my experience thus far with Russ Whitney's Real Estate Wealth Building System. I was introduced to this through a friend, who had seen Whitney's info-mercial on television, and had purchased tapes, a book, and CD's which supposedly would inform someone on how to invest in real estate. My friend shared this information with me, and it was my opinion that the tapes contained a lot of "fluff", although there was some interesting information discussed, more in a "tease" format, rather than a fully informative format. The actual purpose of this information seemed to provide a basis for sales tools leading to a piggyback sale. My friend received a telephone call soon after his receipt of his order, and it was his perception that the speaker on the line was Russ Whitney, (I don't know if he was told that or it was implied, or he misunderstood) who informed him that he was going to be in his area on a certain date, and could he arrange a meeting with my friend at his home to answer any questions he may have about the tapes. My friend subsequently contacted me, quite excited about this special attention from the millionaire owner of this large conglomerate, and asked me to attend the meeting at his home. At the proposed appointment time, we received a telephone call, informing us that we would be receiving a future telephone call in the next 15-20 minutes relating to our appointment. During that telephone conversation, there were several "take-away" tactics used to incite high emotions regarding the prospect of making money. When the second telephone call occurred, we were talking to a salesperson who again used reverse take-away tactics and expressed a need to qualify us to establish whether we were the right type of people for their program. He then outlined the program, which later we found out included things that were not discussed, which appeared to make the deal "sweeter", with much emphasis on the amount of money to be made in real estate. We then were turned over to a "closer", via another telephone call, who attempted to wind up the sale. We decided to wait and discuss it with our spouses, and were given another appointment the following day to arrive at our decision. We did discuss it amongst the four of us. You have to understand that I had been reading about real estate investing for about two years; books like Nothing Down For the Nineties by Robert Allen, Real Estate Money Machine by Wade Cook, and The 36 Hour Real Estate Investing Course by McGraw-Hill. I was gaining some knowledge, but I did not have total confidence that my new-found knowledge would supersede some obvious risk. I also was talking to persons who were investing, and witnessing some success with some mistakes. So suffice it to say, my need was to have a "hand holder" to guide me through the entire process, and hopefully act as a mentor to lessen risk. And certainly it did help to dwell on the financial rewards that could arise from this venture. Based on these thoughts, we decided to pay the $8,400.00 fee, (ouch) and go for it. We did this by telephone again, at the pre appointed time, and then were turned over to another closer, who reviewed the sale agreement, taped the conversation, and cleared up some of the sales hype that was previously stated by the salespersons. We then discovered that we had bought a premium package, which included a seminar in Florida conducted by Russ Whitney, computer software, more tapes and books and weekly telephone counseling by a counselor. Our first couple of telephone counselor sessions was conducted by a lady who I though was quite passive about her guidance. We had been given some assignments to complete, which we attempted, and had some question as to what exactly to do in certain situations. When we would discuss these issues with her, I did not have a lot of confidence in her answers, as most of the answers were mere agreement with what we saying, rather than appearing to come from any careful forethought. She also gave us some information that had we acted on it, would have caused us financial consequence, particularly in the area of foreclosure. When asked specifically about some things, we were after time told that she did not know the answer, or she would find out the answer, or we should talk to an attorney. After three sessions, I called their corporate office and requested another counselor, specifically someone who had knowledge about foreclosures, as it appeared this was an area that we wanted to concentrate in for now. We were assigned to another counselor, who turned out to be our former counselor's boss. Our new counselor is quite good with some things, however I feel that if a person were totally passive to conduct themselves according to either counselor's advice, serious financial consequence would arise. I have not done many things according to their advice, as I am finding out some information on my own that totally contradicts what I am being told. I agree full heartedly with you in your statements about this course that most of the "advice" is motivational, rather than informative, and I really believe that some of their advice attempts to practice real estate law. Lately, we are being told to consult an attorney about various things, after we have objected to the counselor's advisement on how to conduct ourselves. In closing, we are continuing with the program in order to receive all that has been offered. I do not feel that we have received what I perceived we would, and I believe that we have paid an absorbent amount of money for motivation, rather than for trustworthy knowledge that we can depend on. The sad thing to me is, it shouldn't have to be this way. If a marketing company would just organize their material by state, and offer good, solid information that a person could depend on, and have some alliance with competent legal professionals who could provide guidance, I certainly would not mind paying the fee for the service. My feeling, however, is that someone is going to be hurt financially from what I see as an extremely dangerous path to follow, as there are many people who are going to get involved with this type of scenario, make grievous errors, and get stuck with the consequences. These people more than likely will not even have the money to defend themselves within the legal justice system." [Here's another letter from another reader:] I TOOK THE RUSS COURSE IN OCT. OF 98 AND THERE WAS SOME GOOD INFO.. bUT THERE WAS A LOT OF BS THERE TOO tHEY TOLD US TO GET MONEY FROM OUR CREDIT CARDS. OK BUT HOW DO WE MAKE PAYMENTS ON THIS WHILE PAYING ON THE HOUSE WE BOUGHT . AND KEEP IN MIND MOST OF US WERE LIVING FROM PAY CHECK TO PAY CHECK.. I SAT THRU 3 DAYS OF MOSTLY HYPE AND VERY LITTLE INSTRUCTION. NOE I WAS ABLE TO GET ONE PROPERTY WITH THE ADVICE GIVEN BUT I COULD HAVE DONE IT ANY WAY WITH A LITTLE THOUGHT. AND BEEN 1500$ RICHER. THEN i CAME HOME AND THE PHONE RANG AND I WAS DUMB ENOUGH TO INVEST AGAIN I WON'T SAY HOW MUCH FOR 15 TELEPHONE COUNCILS AND THE ONLY THING I LEARNED FROM THAT IS HOW DUMB I WAS IN THE FIRST PLACE. ALL THEY DID WAS REPEAT WHAT WAS SAID IN THE FIRST SEMINAR. I DO NOW HAVE ONE HOME REHABED AND ON THE MARKET IF I CAN SELL IT SOON I WILL GET MY MONETY BACK AND THEN SOME DO I RECOMMEND RUSS WHITNEY? IF YOU GOT MONEY TO WASTE OK. BUT YOU CAN DO THE SAME THING BY CAREFUL RESEARCH.
[Here's another letter from another reader:] I am extremely "New" to the foreclosue business, but have had some exposures to certain people on your list. First, last March, I was out of work, and thought that it would be a good time to get into something to suppliment my income for times like those when I was out of work. One Sunday, I saw an infomercial for Russ Whitney. I thought it sounded like a good deal, and called up to get a reservation to their seminar up in Newark, New Jersey. I went to the seminar and went crazy!! I thought that it was such a good way of making alot of money real quick and proceeded to write a check for over $1,500.00. I was invited back to an in-depth seminar for the first week of April, and was told at that time that I would get a chance to hear Russ presentation, personally. Well, I had to come back to earth soon after leaving that seminar and had to cancel my check, because I didn't have the money to cover it. My wife went "Nuts"! I also did one other stupid thing while I was at the seminar. I signed up to become a salesman for the Bi-weekly mortgage payment plan. In order to do this, I had to sign a contract with LEASECOMM to but their credit card stamp machine, and have them process my sales. This was done so that I could sell Bi-weekly Mortgage Plan from EQUITY CORPORATION of Cape Coral, Florida. Isn't that strange, I just noticed that EQUITY CORPORATION is located in the same town that WIN! SYSTEMS INTERNATIONAL, Russ Whitney's Company is in, Cape Coral, Florida! Well anyway, I am stuck with a binding contract for the price of $59.95 per month for 48 months with a one-time processing fee of $195.00. I will pay off my debt, however, because I know that these guys will have no problem in destroying what remains of my credit. That is another reason why I got into this deal. I was told that I could get into buying and selling foreclosures WITHOUT worrying about bad credit, any money down or even income verification! I went for that, because I thought I'd never be able to buy a house the "normal" way. My second mistake was to get invloved with "FORECLOSUREWORLD.COM". I paid $368.00 to get a list from them that was months old. Some of the banks that I talked to told me that if I wanted a current list, I should write to them directly. So, that is what I am doing. I was also told that by this banker that Buying a foreclosure would require many of the same qualifications as being invloved in a regular real estate transaction, including good credit. So, I am also cleaning up my credit by paying off outstanding debts that occurred when my older daughter got cancer, and I had no prescription coverage to handle her medications. The reason that I wrote this to you is so that maybe someone else will be a little less careless when dealing with these people, and realize that what they are selling is "Wealth and Financial Independence", THEIR OWN!! Thanks for letting me "vent" on you. Kevin Dean, Toms River, NJ Here is an email John T. Reed received on 7/5/01: I have some bones to pick with Mr. Whitney as well. I was told repeatedly in the one seminar I attended that "Russ Whitney Cares About You"! Then I was offered more training at extreme prices and told if I didn"™t sign up that day the price would double. So I declined. I hate hard sales. I also bought into the Mortgage Reduction Deal and leased a credit card machine. Now they are charging me for things I never ordered and was told I would not get or pay for. This is a major headache and I no longer have any respect for the name of Russ Whitney. I work for a seminar logistics firm, we set up training seminars and do any type of work involved with making the seminar happen. I know what it costs to produce a seminar and I can tell you that Mr. Whitney is not getting rich off Real Estate, he is getting rich off the innocent, trusting people that he cares so much about. On 11/13/99, I received an email from Tim and Faye Ashberry somewhere in Arkansas saying they were very happy with Whitney's course. Reader Robert Hagler told me that in his opinion Whitney's book Building Wealth was 'more motivational than how-to.' That guru behavior pattern, promising real estate, but delivering motivation, is one which I cited in my Real Estate B.S. Artist Detection Check List. John T. Reed, a.k.a. John Reed, Jack Reed, 342 Bryan Drive, Alamo, CA 94507, Voice: 925-820-7262, Fax: 925-820-1259, www.johntreed.com