John T. Reed' views of various real-estate-investment gurus 8 Bill Tappan (Albuquerque, NM)-I recommend Commercial real estate broker in Albuquerque, NM and author of the book, Real Estate Exchange and Acquisition Techniques. Great book. Unfortunately it's now out-of-print and out-of-date. Tappan is the first I know of to include court citations in a book for laymen. I followed his example in my book, Aggressive Tax Avoidance for Real Estate Investors. Jeffrey Taylor (Norfolk, VA)-I recommend but... "Mr. Landlord" Some good information , some incorrect information. Too gimmicky for my taste. He offers so many "special" deals and free trials on his newsletter that I wonder if anybody ever pays for it. I got a bunch of mail from his readers once. Oddly, much of it came in envelopes that were recycled. For example, electric company bill envelopes with the electric company return address crossed out and my name and address written on the window. Many wanted to know what "specials" I offered. Strange group. Ted Thomas (Tax Lien Institute, Santa Barbara, CA)"”I do not recommend Last I heard, Thomas was a pre-foreclosure and discount lien release guru. Now he' touting tax liens. I have not seen his tax lien stuff. I like many of Ted' ideas. He' a smart guy who has been around. He went bankrupt apparently as a result of being a syndicator in the "80s. However, he gave me inaccurate information on a deal I interviewed him about. Two of my readers attended a seminar he gave and did not care for his approach. I know a guy who went into a venture with him and was very unhappy with Ted. Ted' books contain some stuff I disagree with, like having the previous owner of a property you buy write to the mortgage lender saying he lost his payment book and requesting a new one. In these cases, the new owner of the property is buying subject to a nonassumable mortgage and trying to keep the sale secret to avoid triggering the due-on-sale clause. His basic approach to pre-foreclosures and discount lien releases as reported in my newsletter and my 20% Below Market Value book is good. But he keeps doing things that embarrass me so I am reluctant to recommend him in a general sense. Here is an email I received from a visitor to this page: "I am the one who started the ball rolling that eventually led to the Jefferson Institute (Utah) going under. Ted Thomas was teaching his foreclosure course there for something like $2750, in conjunction with JI. After I got back home, I tried his course and followed what it said to do and I found it to be a big rip off. I had to amend it to do my own thing out of it (I've been a CA real estate broker since 1971). I wrote and complained and and also wrote or called every single one of the 100 attendees of that Ted Thomas course. The Jefferson Insititute got me my money back and gave me a free ticket to attend John Stephanchik's trust deed course. They obviously were receiving all kinds of demands for refunds after my calls and letters (pre-e-mail, obviously in 1991.) Shortly thereafter JI went chapter 7. I really don't know if Ted Thomas was affected by it. By the way, I had to amend Stephanchik's teachings too in order to do the trust deed buying and
selling. I did all right with it afterwards. When I made some calls to JS to ask questions, I did get the runaround from his office in upstate (or outside of NYC) New York. Since I did not pay for the course, I didn't pursue it any further. Dick Dennis Escondido, CA Wright Thurston---I do not recommend Thurston is first and foremost a salesman. A subscriber to my newsletter said he spent all of a recent speech by Thurston taking notes on his salesmanship, none on real estate. Thurston made a sell-stuff-in-the-back-of-the-room speech in February of 1999 in which his main claim to fame was that he used to hang around with Robert G. Allen. A visitor to this site was kind enough to loan me a copy of Thurston's "Fair But Firm Landlording Techniques." It' not bad, but as I read it, I found myself thinking that parts of it were taken from my book How to Manage Residential Property for Maximum Cash Flow and Resale Value. Sure enough, he recommends the first edition of my book in the bibliography. He also recommends Leigh Robinson's Landlording, which no doubt inspired his title. You ought to read my book and Leigh', but there is far less reason to buy Thurston's overpriced effort. Here are the problems I have with it. It triggers the following items on my Real Estate B.S. Artist Detection Check List: 11, 12, 13, 16, 17, and 20. When he paraphrases my book, you get a lame, nine-year old version of what I said. Why not get the current, complete fifth edition, which I sell for just $23.95 plus shipping? The only reason to read Thurston' book is that he relates some personal war stories which obviously are not in my book or Leigh Robinson's Landlording book. He also has an occasional trick, like using a silent (to human ears) dog whistle to locate secret dogs in your rental units. I do not disagree with much of what he says. But then I do not disagree with much of what Leigh Robinson or I said in our books and Thurston seems to have benefited greatly from reading them. Most of my complaints with his book fall under the category of OK-as-far-as-it-goes-but-it-doesn't-go-very-far. Occasionally, he says something that is dead wrong. For example, he says you should lower your standards in a soft market. No way. You lower your rent in a soft market, never your standards. That advice is penny-wise and pound foolish, not to mention short-sighted. I would recommend the book weakly if he sold it for a fair price, but I will not recommend it when he charges a bunch and forces you to buy it with cassettes which restate the same material. John Ulmer, Westhaven Group (Toledo, Ohio)---Unknown Use my Real Estate B.S. Artist Detection Checklist to evaluate this guru. US Mortgage Reduction---I do not recommend Use my Real Estate B.S. Artist Detection Checklist to evaluate this guru. Bill Vaughn I previously stated here that Mr. Vaughn does not mentor persons in his mentoring service. He sent me an email stating that he mentors about 25% of them. My incorrect impression came from his advertising, which said mentoring customers would be assigned to a "qualified professional personal advisor who is well versed in real estate investing." I assumed that he would make sure customers knew that he was one of the mentors if in fact he was. If I understand Vaughn correctly, he says he can provide an "unlimited" mentoring service for 5,200 clients for just $44.95 because he and his colleagues are not trying to make any money on the mentoring, some people pay then never call, and almost all are weaned within two or three months. I suspect that when you charge $44.95 rather than $2,500, mentoring customers feel less need to call repeatedly to get their money's worth. But I continue to point out that a profit-seeking mentor worth listening to ought to cost at least $100 per hour. At that rate, a mentoring service that costs only $44.95 could only make a profit if it limited customers to $44.95/$100 = .45 of an hour or 27 minutes total worth of mentoring---less if they have any overhead or expenses. He tells me they made a profit of just $2,400 in 1999. Vaughn says his Web site has been certified as a "Safe Shopping Site" by The Public Eye, an Internet consumer watchdog group. I have never heard of that organization. Vaughn told me, "I must admit, however, that you are pretty close to the mark on some of your reviews." J.P. Vaughan I almost never visit Vaughan' Web site, Creative Real Estate Online. I think it' a good idea and I"m glad it exists, but as a real estate investment information writer, there are several problems with my hanging around there. Mainly, I sell the sort of information that persons who contribute to CRE give away for free. Also, I frequently answer a question with, "Read my book or article on that subject." Such answers are verboten on CRE. No free advertising. The alternative to that answer is for me to rewrite the requested info in email form. That would be time-consuming and not conducive to my paying my mortgage. The group has published some negative comments about me, which is fine, except a couple of them have been factual in nature and inaccurate. One such comment, made by Vaughan herself, honked me off greatly. She has since apologized to me for the error. I overreacted to two early libelous statements about me at CRE. Some CRE people sent me emails saying I was making a fool of myself"”that the individual who posted the message in question was a known jerk whom no one paid any attention to. Bill Mencarow, guru of Papersourceonline.com, another real estate news group (devoted to investing in and brokering notes) told me he once engaged in a lengthy debate with a news group contributor"”until several people sent him emails saying the consensus was that the guy he was debating was 12. Someone on that site impersonated me and and made it look like I made an inaccurate comment about Nothing Down author Bob Allen. I was also impersonated again in July of 2000. I disagree with their policy of not screening comments or requiring commenters to identify themselves. Vaughan says everybody knows who everyone is, disguised names or not, on the Group I portion of the Web site. Glad to hear that, although I cannot see how it can be true of new users. Group II is the one where people have impersonated or libelled me. According to Vaughan, the Group II portion of the site was created to get all the newbies, who mainly want to know if Carleton Sheets, et al are good, away from the serious discussion. I generally do not feel welcome at the Group II section either. They tend to be followers of the gurus I criticize, so my participation there would likely deteriorate into a shouting match. Vaughan also say that they sweep through the site daily checking the new postings for things that should not be thtere for violating the rules of the group. And they have always been good about quickly removing inaccurate comments about me or impersonations of me. The site appears to have some useful comments from good people. But they are mixed in with impersonators, shills who are praising themselves or an associate without disclosing their connection to the guru being praised, shills who condemn competitors without disclosing that conflict of interest, "cultists" who believe certain gurus can do no wrong, and just plain dummies who do not know what they are talking about. Vaughan allows all this as free of speech. Her site reminds me of the bar scene in Star Wars: some normal people there, but a lot of weirdos and outlaws, too. It is also like a cocktail party where invitations are not necessary and many of the guests are wearing ski masks. Vaughn filed suit against one outlaw after spending $20,000 tracking him down. "Buyer beware" is an ancient legal admonition. In view of the lawless nature of Internet news groups, "Web site visitor beware" is also good advice. A story in the 6/29/98 San Francisco Chronicle was titled "Investors Beware in Internet Chat Rooms." It was mainly about stock-market rooms but applies to real-estate-investment news groups like Vaughan' as well. Among the problems they listed: contributors may be children or totally unqualified adults contributors may have a conflict of interest, either for or against the person about whom they comment contributors may impersonate another person The Chronicle article described "...their value as an investment tool seems negligible"”to put it politely. Chat rooms, it seems, serve mainly as group-therapy sessions for people who are in the market and nervous about it." I would add that they also give a Cheers bar-stool-like platform to the legions of Cliff Clavens who need to try to trick people into thinking they are knowledgeable. In July of 2000, a person posted a message at CRE Online posing as me. I got a bunch of angry emails denouncing it, but only three apologies when I explained that I had not posted it. I sent a two-sentence form email to each of the people who denounced me in emails I received. About half bounced because their email addresses were phony. I have often thought that Creative Real Estate Online was a classic example of the blind leading the blind. A more accurate description would be: Creative Real Estate Online, where the anonymous debate the fake with the phony under the watchful eye of the gullible. Vaughan tells me the Group I discussions are much better. I have only seen the Group II and those only on a few occasions. Because of the almost total lack of quality control on the postings at Creative Real Estate Online Group II, it can be the real estate Internet equivalent of the Jerry Springer Show at times. The 2/19/01 Forbes ASAP had a pertinent comment. Jade Beetle, was a "guide" (high-ranking volunteer) at AOL and met her husband as a result. She is now part of a class action suit alleging that AOL' thousands of "volunteers" were actually employees and should have been paid or paid more than just $19.95 worth of free AOL service per month. She says, "Most of the volunteers are emotionally starved in some way." As far as real estate investors go, the successful ones are generally very busy and I have trouble imaging them spending much time at news groups. They would use the Net for research, but I would be surprised if they devoted much time to providing free advice. I suspect the best use of such groups is to ask for referrals. I also found them useful for getting a big picture impression of certain real estate investment gurus. By reading a bunch of postings about a guru, you can get a general idea of the nature and quality of his services. I have been told by people I repect that there is much good advice at CRE Group I. I don"t doubt it, but the key question, especially for novices, is which of the advice is good. When someone identifies himself, you can use his or her reputation to tell if they give good advice. But with anonymous postings or handles, you really have no idea. Which takes me back to referrals. If the anonymous, as a group, refer you to the non-anonymous, you are probably better off for the referral. But taking advice from anonymous individuals strikes me as a course of action that simply cannot be recommended by definition. [See my reflections on maintaining this Web page for my thoughts on these behavior patterns.] On 3/9/01, a visitor to my site said I am currently on CRE online in a debate about Russ Whitney. For the record, I have not posted any message on CRE online in 2001. If there are message there purporting to be from me they are written by imposters. I wish Vaughan and CRE well. Real estate news groups are new media that need to evaluate their strengths and weaknesses and evolve accordingly. We are still in the early stages of that evolution.