We Read This Crap So You Don’t Have To: Mike Warren

November 9, 2011

Would you buy a car if the car dealer itself had a banner: We only sell overpriced clunkers.

Would you go into a restaurant if the menu had a warning: Our hamburgers are made from spoiled meat from diseased cows.

Then why would anyone respond to a real estate guru’s promotion boasting about one of his own students going bankrupt (presumably after following his real estate advice)?

Mike Warren email on his student's bankruptcy Here. See for yourself:

“A student”–presumably Mike’s student–had to declare [except Mike misspells it “delcare”] bankruptcy because “they” [should be “she,” not “they”] were over-leveraged on properties she’d bought.

Never fear, though. Mary Jane wants to keep doing what she’d been doing. Never mind a little bump in the road like a bankruptcy. So Mike’s got a way for Mary Jane to keep buying real estate. And he says it’s honest, ethical, and legal. It could be.

My question is: Will it help Mary Jane make some money? Or are the only folks making the money Mike and his “buddy”?

That sure is a great testimonial: My buddy can help you buy more real estate, even though the real estate you bought as a student following my advice landed you in bankruptcy.

I think I’ll pass.

Advertisements

6 Tips To Help Your Business From “Talk Like A Pirate Day” (September 19)

September 14, 2010

Talk Like A Pirate Day: Sept. 19

It’s almost here–the annual “Talk Like a Pirate Day.” Mark your calendars for September 19. But it’s not just a day for having fun (see below), but even for picking up a few useful tips.

OK. So what is “Talk Like a Pirate Day“? From Wikipedia:

International Talk Like a Pirate Day (ITLAPD) is a parodic holiday created in 1996 by John Baur (Ol’ Chumbucket) and Mark Summers (Cap’n Slappy), of Albany, Oregon, U.S., who proclaimed September 19 each year as the day when everyone in the world should talk like a pirate. For example, an observer of this holiday would greet friends not with “Hello,” but with “Ahoy, matey!” The holiday, and its observance, springs from a romanticized view of the Golden Age of Piracy. The holiday is a major observance in the religion of the Flying Spaghetti Monster.

The official site, with lots of links, is at http://www.talklikeapirate.com/ You can see how people celebrated in the past–parties, get-togethers, and more. And I particularly like the sites that will translate text–or even full web sites–to “pirate speak.” See this one: Translate-Pirate.com To see what the White House web site looks like as spoken by a pirate, click here. (No, no one is accusing President Obama of being a secret pirate!)

Enough fun and games. Well, maybe not. But, still, is there anything to be learned from Talk Like a Pirate Day? Absolutely. Things that you can use to help get more clients and more business. (Some of these were written with Realtors in mind, but they’re all applicable to anyone wanting to improve their business.) And a few other tips, besides.

Keep the Calendar in Mind: Why is September 19 Talk Like a Pirate Day? The day was actually triggered when one of the co-founders injured himself on June 6, 1995, and yelled “Aaarrr.” When they decided to “spread the word,” they recognized that June 6 was D-Day. Out of respect, they chose another date. So: Look at the calendar. And in addition to the observances you’re aware of, be sensitive to observances of other religions and other cultures before scheduling an event. If you’re doing a mailing, you may want to time it so you’re not competing with lots of other mail.

Make it Easy to Remember: So, why September 19, and not the 18th or the 20th? It turns out that September 19 was the birthday of an ex-wife of one of the founders. That was easy for him to remember. The same lesson applies here, from the way you brand yourself to the name of your web site. In this case, the point is to make it easy for customers and clients to remember you . . . and how to contact you.

Learn How to Publicize Your Activities. How did Talk Like a Pirate Day catch on? The event’s founders sent a letter to humorist Dave Barry in 2002. Barry liked the idea and promoted it. The rest, as they say, is history. The take-away message here is that the media can help you. Just identify the right–the most appropriate–outlets and get the word out. If what you’re saying or publicizing has value, you may well receive beneficial coverage.

Do Good Deeds. Set up activities that benefit charities. Talk Like a Pirate has a section on its web site for such activities. It even has a nicely-done 8-step planning process. It says:

As everyone* knows by now, International Talk Like A Pirate Day is mostly about (wait for it) talking like a pirate.

But almost since the beginning, some fine folks have used the day as an excuse to raise money for good causes.

The Marie Curie Cancer Care team in the UK was first out o’ the gate, urging folks to organize piratical fund-raisers to support their efforts to provide research and end-of-life care for cancer patients. Others have joined in over th’ years to use ITLAPD as a way to raise money for everything from feedin’ the hungry to sponsoring local children’s programs.

This year, the Pirate Guys are urgin’ their fans around the world to use their Talk Like A Pirate Day parties to pass the pirate hat for a worthy cause, be it social, humanitarian, cultural or political.

Which cause? That’s up t’you. There be no end o’ good causes that could use an infusion o’ doubloons. Read on down for some ideas.

Cap’n Slappy has a soft spot in his black heart for Doctors Without Borders/Medicins Sans Frontieres, the international medical humanitarian organization that brings medical care to people all over the world in times of crisis. They even offer tips for making your fund-raiser a success – and an easy way for you to collect donations on line! Tell’em Cap’n Slappy sent you!

Give Something Away. Talk Like a Pirate has some downloadable ring-tones. (Who could resist “It’s still ringin’ ye scurvy dog!”)? Sure, you can do ring-tones. But offer on your web site free reports, or free information. Give consumers a reason to come to you, remember you, and do business with you.

Have Fun. I think that point’s already been made.

So, make plans for Talk Like a Pirate Day. But take away some tips that can help you on the other 364 days of the year as well.


Why Donald Trump Is No Investor

September 10, 2010

Donald Trump’s no investor. He may well be a smart businessman. He’s a great self-promoter. You may or may not like him as a reality TV host. He’s got a lot going for him. Granted: Lots of skill. Lots of knowledge. Lots of talent. Great name recognition. Lots of money.

But Donald Trump’s no investor.

I heard him interviewed on MSNBC’s Morning Joe today. He debated and defended his offer to buy the plot of land near Ground Zero on which a proposed mosque would be built.


If you haven’t heard the latest developments: The investor who now owns the land bought it less than a year ago for $4.8 million. Donald Trump made an offer to purchase the land for the original purchase price plus 25%–which works out to $6 million, though Trump said it was closer to $6.2 million.  Trump said he was making the offer “as a resident of New York and a citizen of the United States, not because I think the location is a spectacular one (because it is not), but because it will end a very serious, inflammatory and highly divisive situation that is destined, in my opinion, only to get worse.”  The investor made a counter-offer, saying that he wanted $25 million for it.

Trump said on Morning Joe that he wouldn’t pay $25 million because: (1) he wasn’t going to be bludgeoned into paying such a high amount, especially in the name of religion, and (2) because he didn’t want the current owner to be able to say afterwards that Trump was stupid for paying so much.

  • There was discussion on whether Trump was making the offer just to gain publicity. He denied it.
  • There was discussion about whether moving the mosque another 5 or so blocks would defuse the situation. Trump thought it would–that it would make a psychological difference.
  • Trump was asked whether he’d (like the current owner/investor hope to) had ever made 5 times the amount of his investment on a deal. Trump said he had.
  • Trump was asked whether he’d be willing to pay $25 million, with $6 million going to the investor and the rest to charity. He said he would.

Those are all interesting and valid points of discussion.

But Trump’s no investor.

At no point was Trump asked–or did he give his own estimate of–what the land was actually worth. How much is it worth? An investor would put that question at the top of his list. If, hypothetically, the land is worth $40 million, then Trump the investor should have no problem paying $25 million. He’d pick up an instant $15 million in equity. On the other hand, if it’s worth only $20 million, then it’s overpriced at $25 million. Just say so.

I’ve known plenty of investors who’ve put a property under contract for just a few dollars–$10 or $100 in many cases–then sold that contract for $5,000-$25,000. The person who’s bought the contract–often a rehabber–doesn’t complain about the profit the initial investor is making. The person who buys the contract is concerned with whether it’s a profitable deal for him.

I’ve known other investors who’ve bought properties for $175,000 and sold them to other investors for $250,000. Is the second investor “stupid”–to use Trump’s language? No way, if the property is really worth $450,000.

The entire mosque situation is complex and highly inflammatory. There are many competing arguments about how it might be resolved. And there are perfectly valid reasons why Trump might not want to pay $25 million for the land. But to reject a higher counter-offer not on the basis of value but on the basis of emotion (he doesn’t want the other investor to call him “stupid” or to be “bludgeoned into the deal”) suggests that–for all his many strengths–Trump is no investor.


We Read This Crap So You Don’t Have To: Bryan West for Damian Lafranchi

June 1, 2009

I received an e-mail today from Bryan West promoting a product for Damian Lanfranchi. And I have to wonder: Was the e-mail written so poorly, with such bad spelling and grammar, intentionally? If so, is the goal to make the sender seem more “human” and easy to relate to? Or is it just to speak to recipients at what the writer believes is their level of reading and writing ability? (A clever Dan Kennedy-type ploy?)

On the other hand, is this just the way Lanfranche (who I’d guess wrote the pitch) speaks and writes?

Who knows? Maybe more to the point: Who cares?

Here are just a few excerpts from the pitch e-mail:

  • “This MAJOR news affects you) This DIRECTLY AFFECTS YOU”: [OK, OK. I get the point!]
  • “I made 40,000$ on the easiest deal…I am in just for the 427$…” [What’s with the dollar sign placement?]
  • “Plus Damian and Starbuck Dog are Hallarious.” [I guess that’s a lot funnier than hilarious.]
  • “I can not over look it, you won’t either So that’s why I am sharing them with you” [“can not” for “cannot,” “over look” for “overlook.” No periods at the end of the sentences. And is ol’ Hollis sharing Starbuck’s knowledge with us, too?]

As for the actual pitch from Damian (and his trusty companion, Starbuck the Dog), he claims to be the creator of “the only automated, multimedia, deal-generating system on Planet Earth.” I guess modesty may not be Damian’s strong suit. The only automated, multimedia, deal-generating system on Planet Earth? Wow!

Again, we’re not rating the actual product here, just the pitch. The product may be great. (Though you have to wonder whether it can live up to that claim.) What we’re rating is the pitch e-mail and the pitch squeeze page.

Based on the illiteracy of the e-mail and the claim on the video, this earns an 8 out of 10 on our trusty Crap-O-Meter. (We liked the dog. A canine-free pitch would have earned a strong 9.)

 

Bryan West pitch e-mail for Damian Lanfranchi

Bryan West Pitch E-Mail for Damian Lanfranchi

Video of Damian and Starbuck

Video of Damian and Starbuck


We Read This Crap So You Don’t Have To: Nathan Jurewicz

May 27, 2009

“We Read This Crap So You Don’t Have To” features claims–primarily by e-mail–from real estate promoters. Note: We’re not evaluating the actual programs, though we may have some comments on the programs as described in the e-mails and sales pages. Rather, we’re examining the claims and pitches of these promoters and real estate gurus.

In the future, we’ll present some that are honest, straightforward, and actually full of good information. (Yes, Virginia, there is a Santa Claus!) But since it seems that about 90% of everything is crap–exceeding that old 80/20 rule–most of what you’ll read here deals with questionable claims and over-hyped pitches. And so it is with this posting.

I received an e-mail (a portion appears below) from another real estate promoter, Larry Goins. I’ve provided the emphasis in red.

Your whole short sales business works by itself…on automatic! That’s right, just crank it up, then stand back, and let it rip! Find out how right here.

And for good measure:

I STILL don’t know why Nathan’s letting out his secrets. If you’ve seen his “Short Sales Riches” course, he sells everything he’s talking about on this fr-ee DVD for $497. So why would he be giving it away for free? I’m not sure, but if I were you, I’d hustle over there now before he realizes what he’s doing.”

So ol’ Nathan is giving away a free DVD containing his short sale secrets? What a wonderful guy! Gotta love him.  

Except, of course, there’s no information on the sales page. Just the requisite overwritten hype, along with some amazingly low-quality videos. Plus the opportunity to buy his program for $1,497 . . . or $1,694 for two payments, the second just 15 days after the first. Except, of course, it really costs more, as you find out when you get to the order page. It’s $1,497  (or $1,694) plus a month of coaching for $1, followed by continued coaching at $197 a month. That’s a 1-year investment of either $3,861 or $4,058. That’s sure a far cry from “fr-ee.” (Hmmm. Maybe the definition of “fr-ee” in the real estate promotor’s dictionary is: “Four gRand-Each and Every.” 

Again, the program may or may not be worth it. You can be the judge of that. What I’m addressing is the crap . . . the hype . . . the claims versus the facts of the promotion.

This rates a 9 out of 10 on the Crap-O-Meter.

Larry Goins email pitching Nathan Jurewicz's short sale package. Note the reference at the bottom to the

Larry Goins email pitching Nathan Jurewicz's short sale package. Note his claim at the bottom that the information offered on a "fr-ee DVD."

Top of Nathan Jurewicz's pitch page for his short sale program

Top of Nathan Jurewicz's pitch page for his short sale program

 

Bottom of Jurewicz's Pitch Page. Here's the real price . . . sort of

Bottom of Jurewicz's Pitch Page. Note the price, but no mention of additional monthly payments for coaching.

Purchase page for Nathan Jurewicz's short sale package. Notice the $197 additional charge for coaching after the first month.

Purchase page for Nathan Jurewicz's short sale package. Note the additional $197 per month for coaching.


We Read This Crap So You Don’t Have To: Greg Clement “This Is New To Me….”

May 13, 2009

This blog begins a new series of “We Read This Crap So You Don’t Have To.” The purpose: To read the e-mails with the “amazing” subject lines from real estate gurus . . . and then to look at what these folks are peddling. Every once in a while, the subject line and e-mail text are actually worthwhile, and we’ll cover those, too. I promise. But 90% of the time, it’s pure hokum. And 8% is just plain dishonest.

Ready for the first one?

Greg Clement E-Mail "This Is New To Me . . . "

Greg Clement E-Mail "This Is New To Me . . . "

So what precisely is so new to this savvy real estate investor? What is one of the “coolest investing strategies” he’s ever seen? What is “a TOTAL new concept to me”?

Here’s the top and the bottom of the sales page:

Beginning of REO Rockstar Promotion

Beginning of REO Rockstar Promotion

Bottom (with price) of Greg Clement's REO Rockstar Sales Page

Bottom (with price) of Greg Clement's REO Rockstar Sales Page

I read the copy and watched most of the tedious videos (watch this blog for a rant against time-wasting videos!). From the sales page itself:

Effectively we have solved the real estate investing community’s biggest problem … how to flip bank-owned properties without taking a dime out of your pocket.

And now we’re ready to reveal the exact same system that the REO Rockstar uses to flip 10+ houses a month in this f’d up market … to YOU. Like I always say … “I go? You go.”

That’s it? For $997 plus $97 a month? (And maybe more–it’s difficult to tell whether there’s any continuation pricing on some of the items. There likely is for the REO leads and access to the REO Rockstar himself. Woo hoo!) And most of the course is online.

Look: The course may or may not be worth $997 plus $97 a month (or $1,164 a year forever plus other add-ons). As is said elsewhere: We report. You decide.

But c’mon. A savvy real estate investor talking about wholesaling REOs: “I had no clue you could even do this. I’m not kidding. This is a TOTAL new concept to me. You’ve not seen this before. It’s simple and soooo smart. . . P.S. It’s one of the coolest investing strategies I’ve EVER seen.”

And frankly I don’t know what technique’s being promoted here. (That’s part of the reason I call this “crap.” Greg’s not revealing the concept; he’s not showing us what it is, as his e-mail suggests. Instead, it’s just a link to a sales page.)

But there are plenty of ways to do what’s described here: Flip REOs with none of your money. You borrow money–from a variety of lenders–to buy REOs. The only catch, in many cases, is that the property be priced far enough below the market. (And even that doesn’t always apply if you’re borrowing privately.) And as far as flipping, a lot of investors will put the property into a newly-created LLC, then sell the LLC itself. Or, heck, just buy and sell. There are a bunch of other ways to flip REOs.

On our Crap-O-Meter, let’s give this a 9 out of 10.


17 Questions To Ask Before Signing A Lease-Option

February 7, 2009

Recently, a person who was looking for a new place to live told me she was thinking of doing a lease-option–a rent-to-own–to buy a place. Her credit wasn’t that good, and a lease-option sound like a good idea. The rent-to-own was being offered by a real estate investor. This was going to be her first home purchase, and she figured she should be asking a lot of questions. But she didn’t know where to begin.

I provided some suggestions, and some explanations for why she should be asking those questions. Here’s what I told her to ask, and why.

What is the length of the option? [Aim for a minimum of 2 years. Longer is better–3, 4, or 5, for instance. It often takes more than a year to clean up your credit, accumulate sufficient option credits, and position yourself to buy a home. And in today’s economic climate, refinancing/purchasing in just a year may be difficult if not impossible.]

Is there a provision in the agreement that allows me to extend the option if I’m unable to get financing during the option period? [There should be. It probably would come at an extra cost, such as $1,000 or $2,000 to extend the option period.]

If the price of the home declines below the option strike price, what protections do I have? [Possibilities include extending the option period to allow home prices to climb again, or renegotiate the purchase price of the home so that the purchase price doesn’t exceed its true value.]

What will be the purchase price of the house? [That should be specified in the option agreement. Usually that’s specified as an exact price–for example, $425,000. It’s also permissible to say that the price will be determined upon exercise of the option. In that case, though, the exact method should be specified.]

What happens if the property owner can’t make his payments and there’s a foreclosure? [Straight answer: You’d lose out. The option would become worthless. An honest real estate investor will tell you that.]

How can I make sure the owner is making his mortgage payments? I don’t want to lose the property to a foreclosure. [There’s a document called “Authorization to Release.” It’s signed by the home owner, allowing the investor to contact the owner’s lenders and verify account balances, payments, and so on. Real estate investors typically have owners sign an authorization so they can make sure that there isn’t a looming default or foreclosure. Usually the tenant-buyer doesn’t request such a document, or even know of its existence. But someone should be monitoring the owner’s mortgage status to make sure that all is OK.]

Is this a sandwich lease-option? [It probably is if there’s an investor involved. That means the investor has negotiated a deal with the seller regarding monthly payment, purchase price, and other details. The investor then seeks a tenant-buyer. Generally the investor charges the tenant-buyer more per month than the investor is obligated to pay the seller. And the option price that the tenant-buyer pays is greater than the price negotiated between the seller and the investor. There’s nothing wrong with that arrangement. But it’s important to understand the role of all the players.]

Who is responsible for repairs on the property? [Often, it’s set up so that the tenant-buyer is responsible for the first couple hundred dollars of any repair, with the owner responsible for the remainder. The owner should keep his/her insurance in place on the property, to cover any insurable problems. And sometimes one of the parties–the investor or the tenant-buyer–will purchase a homeowner’s warranty to cover other problems and failures.]

How much of my rent payment is credited toward the purchase price? [It’s whatever you negotiate. Very roughly, 20% is often considered fair. If it’s much less, there may not be sufficient incentive for the tenant-buyer. And if it’s a lot more, that could cut into the seller’s (or investor’s) profits. But I’ve seen it as low as 10% and as high as 110%.]

How much up-front option money do I need? [That’s negotiable. Often, it’s the equivalent of 2-4 month’s rent. Generally, it shouldn’t be much more than that.]

If I don’t buy, what happens to my up-front option fee and my monthly option credits? [Honest answer: You lose them in most cases. Virtually all lease-options are written so that the tenant-buyer forfeits any option fees and credits if he/she doesn’t exercise the option.]

I know I need to improve my credit to buy. What would you suggest? [If the investor knows what he’s doing, he’ll suggest that you begin working immediately to clean up your credit. Often, the investor will have a mortgage broker or lender on his team, and will refer the tenant-buyer to that lender. It is NOT adequate to say “We’ll worry about that later” or “If you make all your payments on time, there shouldn’t be any problem.]

Since I’m buying, do I get to claim the taxes and interest on my tax return? [This is a question to determine the investor’s honesty and knowledge. The answer is “no.”]

How often do people like me buying a house on a rent-to-own actually end up buying the house? [We’re testing the investor’s honesty and knowledge again. The answer can vary anywhere from a low of 10% to as high as perhaps 70%. It depends on the conditions of the lease-option, the screening process used to select tenant-buyers, and the credit clean-up and restoration process of the tenant-buyer. Even in the best of circumstances, the figure seldom exceeds 70%.]

How can I make sure the owner doesn’t sell the home to someone else while I’m in it doing a rent-to-own? [The investor should have filed a “Notice of Agreement” with the local county or city records office. That notice will “cloud the title” of the property. Thus, whenever a title search is done on the property–which would occur if the owner attempted to sell the property to someone else–the notice will appear, clouding the title. The notice would have to be resolved before the seller could convey clear title to a new purchaser If a tenant-buyer is working directly with the seller, the tenant-buyer should have the seller sign a “Notice of Agreement” and file it.]

Won’t a rent-to-own trigger the “Due on Sale Clause” in the seller’s mortgage? And if it does, what happens to me? [If there’s a mortgage on the property, a rent-to-own can trigger the “Due on Sale Clause,” thus making the mortgage due and payable immediately. Frankly, that seldom occurs. Many lenders don’t notice the signs that possibly indicate that a lease-option has occurred. And even if they do, there isn’t much incentive for them to call a performing mortgage due. Currently, they have more than enough non-performing mortgages to worry about. But, technically, a lease-option or rent-to-own could trigger the Due on Sale Clause.]

Can I take the rent-to-own documents to my lawyer so he can review them? [The answer must be “YES.” Absolutely. If any investor, or any homeowner, shows any reluctance about allowing a tenant-buyer to have all documents reviewed prior to signing, then run away from that deal. And don’t settle for “That’s not our policy” or “We’ve never been asked that before” or “Sorry, but these are proprietary documents.” The answer must be “YES.” Period.]

Well, those are just a few of the questions a tenant-buyer should be asking the investor (or home owner, when an investor isn’t involved). Rent-to-owns actually can be win-win situations for everyone: owner, investor, and tenant-buyer. But the investor and the tenant-buyer both need to understand what they’re doing.