Despite Subprime Implosion, Robert Allen's Troops Still Pitch "Get Rich Quick In Real Estate With No Money Down"
Robert Allen promises to make you millions teaching you how to buy real estate with no money down. Unsurprisingly, Ripoffreport is littered with complaints about his company and those that use his name. Here's the story they tell:
There's an ad for a free seminar. The crowd gets hyped with tales of fabulous wealth. High-pressure sales staff are on hand to sign you up for more courses for thousands of dollars. Each successive "course" has little information, just fluff and hype and a push to get to the next level where the real secrets will be revealed. There's a few thousand for the 3-day course. Some more thousands for the mentor hot-line and one-on-one coaching. More thousands for the at-home study course. Many more thousands for the weekend retreat where Robert Allen himself might appear. Then, if you really want the big juicy secret that will make you millions instantly, it'll just be $29,999 for the mastery class. Don't worry, you'll make that all back, they say
What actual info is in the materials? Little, it seems, but lots of promises about all the wealth you can generate. One person complained the books he paid over $5,000 for were:
"Thin on substance, but very thick on all the other classes and courses that I could enroll in to help further my dream of becoming a Certified Real Estate Specialist"
Another:
"massive books of crap with empty costly paid promises"
There's supposed to be a 100% money-back guarantee, but people complain about getting the runaround when they try to get refunds. Only chargebacks and complaints to the state's attorneys general work.
According to the complaints, once your email and phone number is in the database, the constant stream of calls to enroll in more classes and services begins. Probably the list gets sold around to the various sub-companies and they all take their crack at shaking your wallet.
I worked with a trainer for approximately 15 weeks, then was given a number for a coaching hotline after the 15 weeks. During that time, I made over 30 offers in 3 states, all with my coach's instruction. None of the offers ever came to fruition, mostly because you can't (legally) get something for nothing. In other words, many of the techniques for acquiring real estate were ethically questionable, particularly when trying to finance real estate deals with little or no money down.
When consumers get mad, the common tactic they write about is for the people they're talking to to say, oh yes, the parent organization is sleazy, we're trying to break away, we don't like them, now, THIS is the class that you need to sign up for.
From how it all smells cruising online, Robert Allen has little to do with the system anymore. Somewhere along the way, the rights to his name and aura were purchased and they slapped his likeness on top of a seminar/education scam and a multi-level-marketing scam. There seem to be an endless parade of "companies" which have bought the rights to use the Robert Allen name and resell his information. Places with names like: Enlightened Millionaire Institute, Business Skills Corporation, Emerald Capital Group, Inc, Go2Trade Corporation, International Acceptance Corporation, Life Skills Corporation, MyMediaWorks.com Corporation, Saris TEchnologies, Inc, Securities Trading Corporation, Timeshare and Vacation Properties Online, Inc., Life Skills Corp., Market Place Pro, The Institute of Commercial Real Estate and so forth.
They talked us into spending our severance pay to pay for mastery classes. They promised 'are you dumb enough to be rich?' and how easy it would be. We spent over $19,000 for classes and had to fly to other states to get some of the training. Two classes were cancelled and we had to choose different classes. Our field training was constantly postponed. They never teach you enough to be successful. We have not met anyone at these classes who has made money the 'Robert Allen' way. Everyone says they just are pressured into buying more classes. When you try to talk to customer service, they tell you to listen to more calls and make more offers. The calls are very vague and they try to sell you something else. No one is just going to 'give' you their house.
How does it work? MSNMoney wrote when they looked into Robert Allen, "They operate according to a tried-and-true principle of behavioral psychology called the variable ratio reinforcement schedule. Basically, people (and rats) will persist in doing something, even with little or no return, if they are given the tiniest bit of hope of a coming reward," In that same article, they also spoke with Mark Wilson, who said he had made lots of money using the Robert Allen system. He paid just $5,000 for a one-year course, and already had lots of experience in real estate.
I'm not sure what the final secret is. Robert Allen crows in his book "Multiple Streams of Income" about how he flew to LA, hooked up with a LA Times Reporter, handed over his wallet, and in 57 hours bought 7 seven properties worth $722,215 without putting any money of his own down at all. The title of the article supposedly was "Buying Home without Cash: Boastful Investor Accepts Time Challenge-and Wins." I Googled and looked on Lexis/Nexis but the only references I could find to it were reams of get-rich-quick webpages reselling the Robert Allen system, some of which, in oh irony of ironies, you'll likely find being advertised in the Google Ad Words block on the left side of the very page you're reading right now.
If I had to guess, it sounds like the big reveal is get a 0% down loan and then flip the house. Hmm, where have we heard this before? Oh yes, it was the lifeblood of the sub-prime meltdown. Right. Got it. There's also all this talk of "using other people's money," which I guess involves convincing other people to give you money to buy the house and then everyone gets their money back plus a bit of profit when turn around and sell it.
Even though banks are only loaning to people with stellar credit who can put solid money down, I still saw a full-page ad in the Daily Post last weekend for more of Robert Allen's seminars. Though, from what I hear, he doesn't actually do them anymore. No, they're now run by various coaches who are part of the Robert Allen institute and figured out the real money is in selling the schlock to the next sucker who believes you can get something for nothing. Hm, maybe we should go to one of these, just to find out how they operate and what the people who show up look like...
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This sounds a lot like Loomis Wealth Solutions, although not as intricate and shady. A family friend of ours got involved with Loomis and is going to lose everything, and will be in financial ruin for the rest of his life.
Here's a life lesson for everyone: If it's on a late-night infomercial (or any infomercial for that matter) DO NOT BUY INTO IT. You can't flip cars for profit, you can't get a house for free and sell it, you can't use a computer program to "work" the foreign exchange market or stock market...it's all BS and you will wind up in epic fail territory.
Sorry if I offend anybody here,but all of this "Great wealth without risking your own $$$" is a load of dogshit.
Listen,you people . There is only one way to create wealth -Effort. Hard work. Sacrifice. Delayed gratification. In short,all of the things that they don't teach in these bogus courses.I don't feel one bit sorry for the poor schlubs that "invest" in these things as a way to get rich without working. If you do that,they have exploted the something for nothing instinct in you and you deserve to get fleeced.The guy that had $19,000 severance ? That could have kept his family afloat during this upcoming downturn. Instead,he handed it to a carload of crooks and rogues and he's crying in his beer. Wake up,dumbass !
I keep wondering, on a somewhat related note, when all the reality television shows built around flipping houses are going to dry up. They can't possibly be finding that many people to film for "Flip That House" anymore, since there's next to no buyers in the real estate market right now to buy the renovated "flip" at the end.
@Snarkysnake: "There is only one way to honestly and legally create wealth ..."
FTFY. :)
This is no different than any of the other "Snake Oil" sales pitches out there. They prey on people who are desperate, ignorant, or both.
I don't know how companies like this can get away with it.
@kathyl: Most of the shows I see on HGTV that are designed to quickly remodel a home to sell fast never end up selling the home. The episode always ends with, "Well we've had lots of interest but are still trying to sell, we're confident that with _________'s work we'll be sold in no time!"
I haven't seen any flipping shows, that would've been cool to see in the height of things.
These presentations and classes remind me of those booklets you see in convenience stores where some psychic tells you what the lucky lottery numbers are. Don't you think that someone who knows what the lucky lottery numbers are would just, I don't know, PLAY THE LOTTERY?
@Snarkysnake: These people prey on the naive, and the people with excess cash to play around with, usually. Those seminars make this sound foolproof, and have an answer for everything. When they pull your heartstrings and make you excited at the prospect of something better being just in reach, it's easy to get carried away.
May whoever come up with this idea have a special place in Heaven... and by "special place," I mean one that is very, very boring.
Here are more crap "you can do it" high priced seminars
Peak Potentials
Anthony Robbins
Chet Holmes
In related news-- Countrywide just froze my HELOC today!
I will laugh when I point out to them that the house across the street from me just sold for a price that's twice my line of credit above the equity in my house.
My guess is that won't matter to them a damn.
And to think, I was actually *happy* with Countrywide. Never again.
I made $58K cash on my first deal. I have friends who are making $20K/month even in this market. Bob's for real. The only people who don't make money are the ones who don't do the work.
You know, if I had access to sufficient cash and the time to wait, I'd absolutely buy four or five houses and be perfectly willing to cash in come the recovery. Two years, five years, it isn't going to be onerously long.
This is not to defend the weasels who work for Allen and its ilk. It sounds like it's become something akin to a pyramid scheme and those are well-documented.
But the first rule of investing is "buy low, sell high," and real estate is low and, for some, accessible at investment levels.
@Me: Well i'm sold where do i send my $5,000?
P.S. why exactly is this guy selling his system if you can make so much money following it? I'm sure its just out of the kindness of his heart...
@Ben Popken: Its the same as any MLM or other "opportunity" enough people do well to make the argument that it works, and anyone who doesn't is labeled "Lazy".
I know a couple with an MBA and Masters of Biochem who got suckered into one of these and they couldnt make it work.
@kathyl: These arent the same as the evil flippers that causes this mess. Those TV folks actually put time and money into the remodel before reselling, creating a new value. Mortgage flippers just bought houses to take out the equity and resell.
@Me: Not buying it.... Perhaps if I see a photo of you in a gold convertible with a cartoonishly oversized check?
@Me:
Please describe "the work"...Do you mean scraping off the old paint,gutting the rotten floorboards,pulling wire through rat droppings in ceiling or just , um , moving a few pieces of paper around and "creating " wealth ? Because if it's the former ,I did that this summer on a rehab (in Florida) and couldn't be happier.I'm with you ,bro. You deserve every dime. If it's the latter, that's not real wealth (as we have seen over the last 14 months or so and in spades since Labor Day). That's a pyramid of paper promises built on quicksand. If you make money that easily,I'd bet that you could lose it even easier. Anybody that falls for this nonsense is a sucker...
"They operate according to a tried-and-true principle of behavioral psychology called the variable ratio reinforcement schedule. Basically, people (and rats) will persist in doing something, even with little or no return, if they are given the tiniest bit of hope of a coming reward,"
Hey wait a second... this is what the Republican Party does with the Christian Right.
Life is making more sense to me.
@laserjobs: Whoopie! laserjobs and I agree on something! I'm going to go have a beer now.
BTW did you see Robbins in Shallow Hal? At first when I heard he was in that movie, I hoped for a bit of self-deprecating humor, but was sadly disappointed. It was almost like a commercial for him.
@downwithmonstercable: They didn't "deserve" to be ripped off. Yes, he could've kept his severance pay, but in his own mind he thought he was going to multiply it, conceivably to better provide for his family, or at least for a longer period of time. I thought Consumerist commenters weren't supposed to be blaming the victim anymore?
People make wrong-headed financial decisions all the time, many of which can be blamed at least partly on the cultural climate that reinforces the notion that finances are a big, murky mystery best left to the professionals, and you need to hook your wagon to an "expert" in some area of finance and let them work with your money. We need to be educating our kids about money as early as possible to make them wiser, better-armed consumers, so they can't be suckered into thinking any old someone-else knows better and has the experience to handle their hard-earned savings.
Sadly, in a horrible economy, these schemes are usually more effective to convince people of. Everybody hears about foreclosed homes in the news, and so when guys like this get on TV and tell you that you can buy a foreclosed home for pennies on the dollar, people believe it.
@TracyHamandEggs!: "Mortgage flippers just bought houses to take out the equity and resell. "
Aaah, sounds like a place I used to be employed at. I'm still trying to figure out exactly what they were doing that was illegal because they were so shady it couldn't have all been on the up-and-up.
If only people would apply themselves to something other than this load of utter and complete crap.
No money down is a myth. It only works for rich people or influential people that everyone knows and respects, like Robert Allen. It never works for the lowly citizen. Why do you think we're in this shithole of a financial mess?
If you have 29,000$ to throw at a no money down house buying scam, couldn't you just use that 29,000$ as money down. It seems like if you have the income to throw away on the scam you should have enough money to just invest in real estate the old fashioned way.
It really amazes me how easy it is to rip people off.
We bought the Carlton Sheets course and tried to get some properties his way, but making lowball offers only works in some places at some times, and requires nerves of steel and no heart. You might as well become a "foreclosure rescue angel" -- it seems to be a lot faster route to sleazy ritches.
In our Seattle neighborhood, some people made out pretty well buying, fixing, and flipping a couple years ago, but people who got started 12 months ago are hurting now. One house that went on the market 3 months ago was in rehab for 5-6 months, and went on the market for $1,200,000. They've been reducing it $50K at a crack and it's down to $950,000 and I don't think they're done lowering it yet. They overbuilt the neighborhood by quite a stretch.
Oh and another rule of thumb, anything that involves taking a class at a hotel is a bad idea. Even my food and safety test I took at a hotel turned into a scam with them trying to sell me tons of books. When I worked in a hotel there was a different one of these groups using the conference rooms at at least once a week. There was one group that would get people to try to sell phone cards. Their big catch phrase was "You pay your bills every month, just imagine if you made money when other people paid there bills."
@StutiCebriones: Except that the core problem, and the reason for the intractability of the sub-prime mess, is that a floor for real property hasn't been established. Everyone is clinging to the inflated values of the bubble and few are willing to (or can, without being underwater) sell at a realistic price.
"Buy low, sell high" only works when the market has established a price - any price - that forms the basis of trade. We're not there yet, unfortunately.
Those who can, do
Those who don't know, teach.....
I'll tell you right now the secret to make a ton of money by Multi-Level Marketing. It's very easy to do.
You START one.
@Hands: "Are you gettin' this, Camera-Guy?"
Gotta love the loveable hucksters (well at least if you haven't ever been taken in by them- and the word itself is nifty). And we might even pity them a bit, at the same time, as it's a proven fact that a majority of the best salesmen in the world have somewhat sociopathic tendencies caused most likely by improper bonding. Sadly, these miscreants don't even care that they're lying to your face.
has anyone seen the new tide of "get rich quick in real estate" schemes? BUY HOMES FOR AS LITTLE AS $350!*
*home may not include copper piping, windows, doors, septic system & may currently be occupied by local crack addicts.
i miss that infomercial that was telling people to buy a home, cash out the equity, use that to buy like 10 more homes, cash out all that equity & then sit by the pool all day. i made $60k just last week! yeah, & next month you'll have a $25,000 mortgage to pay. sounds perfectly reasonable to me...
Bob Allen? Seriously? Wasn't his system sussed out and exposed in the ... 1980s? Is Allen himself involved, or is this just scammers using his name in e-mails?
"where Robert Allen himself might appear." -- sure, and maybe Elvis too.
This article confirms my own limited research, thank you Ben. I think the flippers are supposed to obtain high-interest short-term loans, on the order of 12-15%, in order to finance the real estate purchases. Not sure if that's from an official lending source, but I think they are also placing ads to try to lure fourth-party real estate "investors" in order to pool together outside cash. But I wonder who would risk their money?
Also our town is littered with "We Buy Houses" plastic signs illegally nailed to utility poles, advertising various phone numbers. I bet they are closely related to these scam seminars, but it's not like you can ask them and get honest answers. And the spammers are very very persistent, I think after throwing away so many thousands of dollars they don't want to give up and admit it was a mistake or a scam. Reminds me of Herbalife.
Went to a Quixtar (Amway) thing just for the hell of it once, because the sales-douche/mentor tried to propose the "Business Opportunity" on two occasions - once at a CompUSA and once at Lowes. Made a point to go in shorts, a T-Shirt, and Birks just to piss him off.
Anyways, I consider myself educated and very resistant to falling for sales crap..but for a few seconds, even I thought "Wow..I really need to get in on this." (Kept the XM off on the drive home to punish myself for that thought)
I think something about the flashy images and the down-to-earth appearance of the speaker play into the believability..plus they do some prayer crap that repulsed me but I'm sure would win the confidence of many.
@Me:
I thought you had to be approved to comment here? Looking at your past comments, most of which consists of some variant of "who pissed in your cherios"...I say that the standards are set lower than even Lil' John would want you to get...
The last time the Robert Allen seminars came to the Portland area, the local station that normally airs two COPS reruns weekday afternoons cancelled the second half hour and replaced it with Allen's boring informercials. Fortunately, this only lasted for the week prior to the seminars. So yeah, not a big fan of this guy.
TWO Cops reruns? Wow, that's shocking - really screws up my theory that there is, in fact, only one episode of Cops, and they just digitally alter (a) the logos on the uniforms and (b) the race of the shirtless men.
exactly sacralbos.
The only people that make money in MLM scams are the ones that start them.
Sadly, my in-laws are in this crap. they have not come close to making a dime, yet they have spent thousands. They own their own business, so with the economy going sour, their real income is taking a hit. Their solution?
Throw more money into this.
Let me tell you how to make a killing in this market. I'm shorting real estate.
That's right, I'm borrowing my neighbor's house and selling it. Next year I'll buy it back and keep the profits!
So simple, why didn't you think of it?