Bernard Zick's REIT REAL ESTATE REPORT

September 2003

The REIT Real Estate Report is published about once a month. It is intended to serve no special or worthwhile purpose. It is just my way of telling you what is going on in the world of real estate education. My only goal is that I don't get sued and you are entertained a bit. For an e-newsletter of merit, our next issue of Advice for the Impatient Investor will be out the first week of October.

Editors: Bernard "Barney" Zick bernard@zick.com, Karen Zick and Amy McIntee

In this issue:

Carlton Sheets, Wade Cook and Court Cases

John Beck: America’s Brightest Bottom Fisherman

Enough is Enough...

P.S. - Don’t You Dare Have an Accident!

Carlton Sheets, Wade Cook and Court Cases:

(Back to top)

There are all kinds of real estate instructors. Some did it back when and made it on product sales ever since.

Carlton Sheets had a long career in large scale property management before he hit the book and tape trail. He was just one of the guys doing events when he got booked into a Chicago Real Estate Investors group. That night, he was approached by a marketing company that wanted a real estate course to sell on TV. Infomercials were still new. Luck of the draw, he was the speaker that month. The rest is history. I don’t know if he invests any more, but he does not need to. His royalty income from the infomercial is equal to 100 free and clear properties.

I think his advice is good, solid, and basic. It is a good place to start learning. He does not go into what can go wrong or give lots of details. It is updated often by staff and is best suited for someone that knows nothing about real estate when they start.

Wade Cook invested for a few years in Seattle, about 25 years ago, and then started doing seminars instead. Best I know, he has not invested since. He is a master at convincing people. Ask any one of many investors that invested cash for stock in his various companies that no longer exist and some that never got a chance to exist. His bookkeeper’s husband used to work for me and I heard too many stories to repeat…especially since no one else ever confirmed them.

His last venture involved buying the rights to a stock market course he labeled under his name and sold and sold and sold. It was a good course, especially in an up-market that lasted for several years. (Advice consisting of buying stocks that began with an “M” or “I” might have also worked well in that market!)

But he is not a detail person and the Fed is. Wade has only one rival in bouncing back and that would be the former “Teflon Don” from New York. Wade’s company went into Chapter 7 bankruptcy on December 19, 2002, which was converted to Chapter 11 on January 17, 2003. The firm, Wade Cook Financial Corporation d.b.a. Profit Financial Corp, was located in Seattle. (Case Number 02-2534.) His mailing list was sold last month (for a tidy sum considering there were thousands of customers that did not get what they bought and the new list buyer has to some how make them happy). Wade is back on the speaking trail.

If you did not get all you paid for from Cook, the court said that the buyer of the list had to offer free courses to make up for what was not delivered. They had to submit a plan to the court that included “pay back” for those orders that were left unfilled to be considered as a list buyer. If who I think bought the list did, (my group's bid did not make it), then you will most likely get a good seminar with good information. But it is too bad it all had to happen like this.

Mind you, as a person that has worked very very hard to protect small investors, I get a little concerned with the stories I hear. Too often people have a problem with one company or instructor and think all people in investment education are the same. I guess the bottom line is simple. Wade started out as a taxi driver. It was his claim to fame. And if you want to get real estate or, even yet, stock market advice from a taxi driver, go for it. And remember, just because instructors (including me) are up on the stage, it does not mean they are closer to God.

(Educational note… Bankruptcy is for people who have short term debts in excess of short term money sources. Chapter 7 is for a person to get out of all debts. Chapter 13 is for a person that says, “give me time and let me come up with a plan and I can pay all this off.” Chapter 11 is for corporations and is like Chapter 7.

Unless challenged by creditors that say you did something fraudulent while getting into debt, which seldom happens, you file one day and get to keep all that you earn from the next day on. It takes about a year for all the dust to clear but you get the “new leaf” on day one.

I was researching buying real estate out of bankruptcy when just such a deal came along. It is too soon to report on it however. If anyone out there wants to help or add to my knowledge, great! Just contact me at bernard@zick.com. It is not a subject for the “fire, fire then aim” sort of investor and I could use the help.)

John Beck: America’s brightest bottom fisherman

(Back to top)

At the other end of the spectrum from Wade is John Beck. John, a former attorney, has specialized in tax lien sales and foreclosures for over 30 years.

He once was a “traditional” real estate buyer in California in the 1970’s. Nothing down. Lots of leverage. Prices up and up and up. But when you are highly leveraged, fast market moves can take away that sort of equity -- and that taught him a lesson. For many years now, he would rather buy fewer properties and get them so cheap he can pay cash and that way they will never be taken away.

John is a plodder. He has for years, followed the tax liens sales. He knows all the laws like the back of his hand. He most likely does not need to work by now. I have offered him a great deal to come and speak at an event and he said it was not worth it to make the trip. Must be nice.

Mind you, John himself will tell you he does not thrill the audience and he is not much on selling his materials, but his attention to detail and depth of knowledge is not to be matched anywhere. I met him in the early 1980’s when he was teaching on the road. A brighter, nicer gentleman you will never meet. If you have a chance to listen to him in the Bay Area, don’t miss him.

Enough is enough…

(Back to top)

That is enough insider stuff for this issue, right? If you have not looked at www.zickhomeloans.com, please do so. I have a raft of people that have signed up to make money as mortgage originators. Mark Victor Hansen, my “partner” in this venture, says I am currently the number one recruiter in the company. It is not me; it is such a great way of making a buck while continuing your real estate investing that people are jumping in. Email me if you have questions and we will chat about it.

Don’t forget about our one day event Sunday, October 5th in Orlando. It is “How to Get Started and Stay Motivated” in the morning and “Wealth Building with Real Estate Options” in the afternoon. It will be the last time for this course in the Southeast for a year. Here is a special for our readers. Keep the “post mark” from the top of this e-newsletter and you can get in to this event for $10 rather than the standard public price of $295. Details about this seminar and other events and Boot Camps are listed at www.zick.com.

P.S. - Don’t you DARE have an accident!

(Back to top)

Remember my bike wreck? (Darrel Cowden wrote to suggest Texas-sized training wheels. Not that funny, Darrel!) Well my ribs still remember a month later.

Anyway, I get the bill for five hours in the emergency room - $5832! What would a person do if they did not have insurance? This bill was a joke! The insurance company told them to take two grand and insert the rest in whatever. We are going to be in one heck of a mess if the doctors and hospitals don’t stop triple charging in hopes the insurance company will not catch it.

I took my son to a bone popper for his back. He charged my wife’s insurance over $200 for her appointment but I was there with my son who has no insurance, and it was $45 cash! A system like this is going to collapse! Next time a candidate seems to have a good plan and the willingness to take that on, I am going to pay special attention to them. You should too.

The Fine Print...

(Back to top)

We will publish the REIT Real Estate Report, containing Real Estate Education Industry News and a lot of personal opinions, and Advice for the Impatient Investor, approximately once a month. (However, keep in mind, our newsletters are free so don't get upset if we skip one occasionally!)

Advice for the Impatient Investor has been published for thirteen years (but, not in a row).

Folks smarter than us told us to say: We take no responsibility for the accuracy of the postings. All contents of the postings are the responsibility of the posting party. The foregoing material is strictly for informational purposes only and does not provide legal, financial, accounting or investing advice or services. Use of any of the foregoing information does not create a client relationship. You should not act on the information provided without seeking legal, accounting and tax counsel of your choice.

We reserve the right to terminate the subscription of anyone at any time.

Copyright note: Submission of an email message or art work affirms that you are authorized to and have given Bernard Zick, et al, non-exclusive permission to reprint the content of your message in all forms, electronic or otherwise, in all languages throughout the world.

Copyright © 2003 by Real Estate Investors Training Corporation, Kingwood, TX

ISSN # 0272-8559

All Rights Reserved, no reprints to other email lists or websites without Bernard Zick's permission. You have permission and are encouraged to forward this e-newsletter in its entirety to a friend!

Check out our website: www.zick.com