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What happens to you at Russ Whitney' 3-day real estate training by John T. Reed I have received a number of reports about what happens at Russ Whitney' 3-day real estate training"”a three-day program I have also seen called the "Real Estate Training Academy." What price? This used to cost $1,590. Then they reportedly raised it to $1,790. But lately I have been hearing that people were paying $300 or $500. In my opinion, you should not pay a penny or even attend for free. But if you paid more than $300 for the three-day real estate training, you"re a bigger chump than some of the other people in the seminar room. I have heard this from a number of people, most recently from a guy who took the three-day training at the King Of Prussia, PA Radisson Hotel 3/24-26/05. Selling and more sellling The most common comment I have received is that every contact with the Whitney organization"”including your attendance at paid seminars"”is used by Whitney' people to pressure you to buy more seminars and other expensive services. It matters not whether you called them to ask a question or they called you or you are attending an instruction program you paid thousands of dollars for. Everything is at least partly a commercial whether you paid for it or not. There is nothing wrong with mentioning or boosting other products briefly at a seminar. I did it myself when I did seminars. But what I and others did was merely mention that we had books for sale in the back of the room and have a person back there to sell them to those who were interested"”similar to what I do at this Web site, i.e., mention a pertinent book of mine whan appropriate. One-third of the paid seminar time What I have been told that Whitney does is devote hours of paid seminar time to trying to sell you more seminars. One attendee said the first and last hour every day was consumed with efforts to sell you on more seminars or "mentoring" or consulting. This was at a three-day seminar where each day' instruction lasted about six hours, so he was saying about a third of time you thought was going to be devoted to the insruction you paid for was really devoted to pressuring you to buy more. In other words, your three-day seminar was actually a two-day seminar plus a one-day commercial that you unwittingly paid to sit through. Persons who paid for the right to call Whitney' organization to get advice have complained to me that the "advisors" were always more interested in pressuring you into buying another seminar than they were in just

answering your question. Often, the answer to almost every question was, "You need to take this other seminar." A woman who atended with her mother refused the pressure to buy yet another seminar and had this to say about the reaction of the Whitney instructor and sales staff. ""¦when my mother and I kept insisting that we didn"t know if we want to take the advanced courses, he started to be a little "cold" to us after our lunch break. And after class was over, we had to get our certificate signed by our instructor and he didn"t even look us in the eye and no one else even said goodbye or good luck???? They seemed to be too busy trying to sell their program to only a few!" Ridicule Ridicule of various forms also seems to be part of what you get for paying thousands of dollars for a seminar. One form of the ridicule is to accuse those who only buy one seminar of "fishing with a hook [only attending one seminar], rather than fishing with a net [attending all $40,000 of Whitney' seminars]." Another form of ridicule is to accuse you of claiming to "know everything" if you refuse to sign up for additional training. Another is accusing you of not being serious about being a success or real estate if you refuse to buy more seminars. Contest to raise credit card limit Numerous Whitney grads have reported that the speakers run a contest to see which attendee can raise their credit card limit the most. Reportedly, each student makes a phone call on a speaker phone with the rest of the class listening. They call their credit card company and ask for an increase in their limit. Ostensibly, this is to help you obtain financing for your real estate investments. But it is generally crazy to borrow against a credit card to invest in real estate. Why? The interest rates are too high and the annual constants are even higher. See my positive cash flow article for an explanation of those terms. The way to finance real estate is with 30-year mortgages in the vast majority of cases. One of the ways we learned to evaluate the competence of a businessman at Harvard Business School was his cost of capital. In other words, the more you pay to rent capital, the dumber you are. Using credit cards to finance investments would put you in the dumbest category of all. A number of Whitney customers have expressed the belief that the whole credit card exercise was for the benefit of Whitney, not the students"”that they wanted to know how much you could afford so they could pressure you to spend as much of that limit as possible. That strikes me as a more likely explanation of the emphasis on credit-card borrowing. Here' an email I got on 4/6/03: "On the 2nd day of the seminar, our homework was to call our credit card companies and ask them if they can increase our credit limit and to lower the interest rates and whoever had the most dramatic turnaround would win a gift!" There is also the issue of privacy. Your credit card limit is nobody' business. "Russ Bucks" A number of people have complained to me that their paid seminars included hours of playing hokey games to earn "Russ Bucks." "Russ Bucks" are apparently discount coupons for paying for more Whitney seminars. Unhappy customer I got an email from a guy who took Whitney' "Real Estate Training Academy" in Calgary on 2/28 to 3/2/03. He fet the course was not what he expected after listening to the "free training" pitch for it. He also did not feel it was worth anywhere near what he had to pay for it. The student was told the seminar would be an "extraordinary experience" and that the training was "intensified." He felt it was neither, that only less than one day' information was presented, but stretched out over three days. The seminar you "really need" is always the NEXT seminar Time and again, Whitney attendees have complained to me that at each stage, they were led to believe the seminar they were being sold was what they needed. But no sooner did they arrive at that seminar than they were told this was not all they needed. Rather, they had to take additional seminars to get the real stuff. This starts with the "free training" which is depicted as a learning experience, but ends up mostly being a sales job for the "Real Estate Training Academy." But when they get to the "Real Estate Training Academy," they are immediately given the impression that it is only an introduction. In other words, on the infomercial, you are told you need seminar A. At seminar A you are told you need semminar B. But when you get to seminar B, you are told what you really need is seminar C. But when you get to seminar C"¦and so forth. The Calgary attendee said, "Had I known that I would be spending hours I had paid for (that should have been for training) listening to a sales pitch to spend upwards of $40,000 more on ridiculously overpriced training, I would not have signed up in the first place. Every lesson was at best incomplete (on purpose I now realize)"¦[to force you to sign up for the next one to get the rest of the information]." Entertainment or how-to information? The Calgary attendee complained that the speaker whom he called Mike was "mildly enertaining," but that he did not sign up for a real estate seminar to be entertained. Deductible? The Calgary attendee also complained that the speaker insisted that the cost of the seminar was tax deductible. In the U.S., that' generally true. You can deduct the cost of education if it helps you do your current job better, but not to meet the minimum qualifications of a new career. (IRS Regulation 1.162)-5 However, in Canada, according to the Calgary attendee, you can only deduct education expenses if the course is taught by a "fully accredited educational institute." I know nothing about Canadian tax law, but Canadians should check before deducting. Copyright 2002, 2003 by John T. Reed Last update 3/21/03 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

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