Property spruiker and self-proclaimed ‘internet marketing expert’ Dean Letfus gives me the inescapable impression of being rootless and slippery. He seems to flit hyperbolically from one cash flow generating event (for him!) to the next without much regard for consistency … or the trail of disappointment he leaves. (Examples here.)
I have long criticised property ‘educators’ and ‘mentors’ who sell property to their ‘students’. I say they’re crossing an ethical line. Others like Andrew King have agreed with me (PDF).
I am personally troubled by this particular travelling salesman’s fake-it-and-make-it-up-as-you-go-along approach to ‘property education’. I honestly think it is misleading, in some cases even akin to the Blue Chip-type scam where ‘investments’ were sold off the plans with ‘projections’, ‘guarantees’ and assurances that never materialised. Here’s why:
In March 2009, as part of public attacks on his former boss Richmastery supremo Phil Jones, Dean Letfus (oh so confidently) stated this about US Tax Liens:
I’ve spoken to people here and in the USA, they [US tax liens] are snake oil, complete with white shoes and wagons.
US Tax Liens
Other than this is what everybody has said, high risk, money can be tied up for years, no guarantee of profitability etc., you also have to look at what is said and what happens.
In PJ’s [Phil Jones] latest blog he says that they showed students 3000 properties for sale at 5 to 10% of their value, then says that their students deal is fantastic at 22% of valuation.
Why wouldn’t they buy such a bad deal?? Probably because the good ones don’t exist.
And the discount is off the valuation, which means nothing at the moment, and there is no mention of the taxes required etc. to hold the property. Yet this is all being talked about as “profit” instead of paper only equity, which may equate to zero in real dollars.
It is therefore logical to conclude that the “profits” from the liens may be paper only also.
In many states you require about a 22% yield to actually be cashflow positive.
I can find no evidence whatsoever of [Dan] Eckelman being involved with Trump as their Number 1 gloabl [sic] trainer and Tom was stopped at customs because of proceedings against him.
Would you trust the words of these people?
… but NOW Dean Letfus is actually promoting US Tax liens (!!) — as part of his business partner Shaun (G-string) Stenning‘s joint venture NZ Property Gurus hard-sell roadshow — the very US Tax Liens and the very operators (Dan Eckelman et al) that he and Matthew Gilligan criticised and warned people to stay away from. (Well, that’s how it looked — and not just to me, apparently.)
That’s a pretty serious change of tune: from ‘snake oil’ to amazing ‘opportunity’. That was then, this is now, I guess.
The self-proclaimed NZ Property Guru “educators” also seem to be selling “unique opportunities” to buy property in the USA, like this:
I’m [Dean Letfus] also very excited about some unique opportunities opening up in the USA right now. In fact I am flying the principals of 3 companies down to share with you some stuff that will literally blow your mind, including more opportunities liek [sic] the one I mentioned above.
Wow, that’s so generous of Dean Letfus to fly those real estate salesmen ‘down’ to NZ. How kind of them, too, given how busy they must be selling these “unique opportunities” to all those US investors clamouring for them (if not, why not?), to come all this way and offer their ‘opportunities’ to lucky, lucky, investment-savvy Kiwis (— oops, watch your mindset!)
So, among the sales pitch at the Property Gurus are the US tax liens David Whitburn criticised and ‘bargain’ rental investment properties so good that US real estate salesmen will travel to New Zealand to sell them to us?
Dean Letfus asked: ‘Would you trust the words of these people?’
That is a GREAT question! (My answer: No.)
And I wonder how Dean Letfus plans to recover his costs? Sales commissions, by any chance, do you think? (To help his “work with the poor in Fiji”, perhaps?)
And will those commissions be fully disclosed — along with any criminal/dishonesty convictions of people involved in the investment sales machine? I guess so — hang on, I must check when that Financial Advisors Act kicks in …
And another thing: do you think these “unique opportunities” are being offered to the NZ public with a Registered prospectus? It doesn’t seem likely, but I could be wrong. If not, is that OK? Any thoughts?Fellow spruiker ex Richmastery franchisee Steve Goodey is part of the mix, leaving off picking the bones of the decaying RM carcass and shuffling into the spotlight — recently having squashed (or caved in to?) an unflattering website blowing the whistle on his apartment development, er, ‘activities’ in Wellington. (From what I read, that website made some pretty serious allegations about Goodey’s um, er, ‘operation’.)
And another former ‘Richmastery expert’, chartered accountant/neophyte property developer Matthew Gilligan — having previously issued a formal warning, a ‘commercial alert‘ about US Tax Liens — is also part of the roadshow, apparently. I’m sure he has his reasons.
But gee, one day “snake oil”, next day “unique opportunities”… Intriguing.
What on earth can have motivated the change of heart? (if there’s an explanation that I missed, please point me to it.)
Facts are stated to the best of my knowledge and commentary is my honest opinion. Corrections or clarifications are always welcome by email. Comments are open.
– Best wishes, Peter Aranyi © 2010 All rights reserved.