Albert J. Lowry: the Rise and Fall of an Investment Guru

Diane Rasmussen hurried over to the Hilton Hotel in Ogden, Utah, after a church meeting the night of May 20, 1986, to catch the end of a lecture by get-rich-quick prophet Albert J. Lowry.

When it was over, she said, she walked to the lectern and slipped him a copy of his best-selling book, “How You Can Become Financially Independent by Investing in Real Estate.” Lowry autographed it, adding the inscription, “Go For It!”

Rasmussen thanked him, then served Lowry with a copy of a lawsuit. Rasmussen, a process server, had been hired by local attorney Richard Medsker, who had been trying unsuccessfully for 11 months to catch up with Lowry. Medsker had filed suit on behalf of client John Hebestreet, who claimed Lowry had not paid back $32,000 he borrowed to buy some apartments in Utah.

Catching up with Al Lowry is no easy task. But that isn’t stopping his creditors, who are pursuing the Westlake Village resident for what they claim are millions of dollars owed them.

Lowry, 60, is now so entangled in legal and financial problems that last month he filed voluntarily to liquidate under Chapter 7 of the U.S. Bankruptcy Code. In a Chapter 7 proceeding, assets are liquidated and proceeds are distributed to creditors.

Court papers filed last week list Lowry’s assets as totaling about $1 million, compared to debts of nearly $3 million, including $138,675 owed the Internal Revenue Service. (Lowry disputes some of those debts.) In addition, the papers show that Lowry’s monthly expenses exceed his income now by $1,500 a month.

It’s a sharp turnaround in fortunes for the one-time butcher from Canada who became a best-selling author of advice on getting rich. In the early 1980s, he was among the best known of the financial gurus working the seminar circuit selling advice on investing in real estate with no money down.

In the late 1970s, Lowry hit it big with “How You Can Become Financially Independent by Investing in Real Estate,” that was on the New York Times best-seller list in 1979 and 1980. The book’s publisher, Simon & Schuster, says the book has sold more than 500,000 copies.

Lowry also made the cover of Money magazine in 1981, dubbed as a “real estate wizard.” The magazine estimated Lowry’s personal worth at that time as $30 million.

Although Lowry’s slogan was “give me only one hour a day and you can retire in three years,” critics said his advice was hard to use and required the high-inflation real estate boom of the early 1980s to have any chance to work.

For $495 each, thousands of people packed hotel ballrooms to hear Lowry’s theories on how to get rich investing in, for example, rundown buildings for little or no money down. By 1983, some 130,000 people, Lowry claimed, had taken his course. According to former Lowry company executives, his seminars grossed as much as $100,000 to $200,000 in a typical weekend in a major metropolitan area.

“When thousands and thousands of dollars cross your desk, you start to think you are infallible. You don’t realize everything has a life span,” said Steve Wallace, a former real estate speaker who worked for Lowry.

Lowry soon inspired dozens of imitators, many of whom--such as Tony Hoffman and Ed Beckley--began as Lowry proteges. At its peak in 1985, nearly 20 real estate gurus saturated the airwaves selling no-money-down courses and another 100 or so worked the seminar circuit.

According to former associates, Lowry’s rapid fall stems from a combination of factors, including borrowing too much to finance his own real estate purchases, the collapse of the real estate seminar industry that made him rich, a divorce, a spending habit that some of his former executives said was as high as $80,000 a month and a chaotic management style.

“He doesn’t let the right hand know what the left hand is doing. The (bankruptcy) filing doesn’t surprise me,” said Reno attorney C. Nicholas Pereos, who once represented Lowry and claims he is owed $20,000 for legal work.

Lowry did not return messages left at his Westlake Village home, and his attorney, Stephen J. Snipper, has refused to comment on Lowry’s bankruptcy filing.

In an interview with The Times earlier this year, Lowry acknowledged having financial problems. He said it was caused in part by losses on property in the Lake Tahoe area, which he blamed on a strict development law, as well as the proliferation of similar real estate advice courses offered on cable television.

“Where my tough time came is that I had a certain life style that required X number of dollars,” Lowry said then. “What I had to do was reduce my overhead.”

Some creditors claim that Lowry has shifted some of his assets to keep them out of the hands of creditors.

Last month, Eric Joe, an attorney for California First Bank, which won a court order requiring Lowry to pay back $600,000 for a loan on which he and his partners in a Westlake Village health club defaulted, accused Lowry in court papers of transferring assets to his ex-wife, Darlene, and “third parties.”

Public records reviewed by The Times show that Lowry has transferred ownership of some properties to companies with which he has been associated. Lowry deeded his Westlake Village home, for example, in 1985 to Lyndene Investments, a partnership formed in 1982 in Alameda County by Lowry and his wife Darlene.

Now that home in the North Ranch section of Westlake Village--the most valuable asset listed in his bankruptcy petition--is up for sale. Originally priced at $1.15 million, its price was cut earlier this year to $945,000 and, more recently, to $895,000.

In addition, Lowry deeded a condominium in Thousand Oaks to Success Development Institute, a company that promoted his theories, the day after it went out of business in October, 1985. Valley Federal Savings later foreclosed on the property.

Attorney Joe, in court papers, accused Lowry of teaching students ways to keep assets from creditors, “including the tactic of filing for divorce.”

Lowry and his wife Darlene recently divorced, and a paper filed on March 12 in the divorce case says that each will keep property in their possession.

As the real estate seminar business began unraveling, Lowry endorsed a “high-energy weight control substitute” that he said helped him lose 23 pounds in seven weeks.

Lowry also started giving credit seminars in which he taught, among others things, how to play hard ball with bill collectors.

While Lowry’s financial and legal problems have mounted, he continues receiving prominent billing at seminars.

Just one month before he filed a bankruptcy petition, for example, Lowry spoke at weekend seminars in the Los Angeles area in a program called “Your Financial Future.” An ad for the seminar billed Lowry as “millionaire real estate investor” and the “dean of real estate investments” and said he would lecture on financing, negotiating and “numerous other wealth-building strategies.”

Former associates describe Lowry as enigmatic, a man who could be generous with gifts to employees and who spent freely for diamonds, gold jewelry and clothes for himself. At the same time, he could be stingy, refusing to pick up a dinner check with employees or expressing concern over spending too much to print brochures that cost 10 cents each, said Donald Yule, former president of The Lowry Group, a defunct Westlake Village company that Lowry had formed to promote his real estate theories.

Some former Lowry executives also say the company was run in a chaotic style, with Lowry often canceling seminars or promotions at the last minute. In one case, a New York program was canceled after $5,000 in mailers were sent out.

Success Development Institute, the last company formed to promote Lowry’s theories, closed in October, 1985, with $2.5 million in debt. At the time, Lowry insisted he had not been associated with the firm, although state records listed him as chief executive at the time it closed.

Raised in an orphanage until his teens, Lowry began his career as a real estate expert in the early 1970s in Oakland, where teamed up to offer seminars with William Nickerson, author of the 1959 best-selling book “How I Turned $1,000 Into A Million in Real Estate in My Spare Time.” After a bitter split with Nickerson over royalty money, Lowry ventured on his own, selling numerous books through his real estate seminars.

Lowry’s seminars did well at first because of his aggressive promotion. Lowry induced people to attend his seminars by offering baby sitting, cab fare and, sometimes, hotel rooms. He bought thousands of copies of his own books and distributed them free at seminars.

Later, he hired actor E.G. Marshall to narrate a documentary promoting Lowry that ran on local television stations a few days before his seminars came to town. Another TV ad was made to look like a simulated newscast.

Dressed in three piece suits and wearing a toupee, Lowry ran lectures that were typically part financial lecture and part revival meeting, with testimonials offered by students who claimed they made a financial killing using his methods.

His lectures were often supplemented with talks by hypnotherapist Danielle Durant on her “Mental Bank” theory in which she urged people to establish “mental” bank accounts to deposit imaginary dollars when they did something that made them feel good, such as exercising.

Lowry earlier this year disputed the $30-million net worth figure cited in the 1981 Money magazine story, saying that it included business assets as well as his personal assets. A loan application filed in 1985 with California First Bank listed Lowry’s net worth as $12.1 million.

“I don’t know what the hell he’s going to do now. He’s been away from butchering too long,” Yule said.

Lowry himself, in a chapter of a book on credit he sold at the seminars, discussed the problems of filing a bankruptcy petition.

“It has such an ugly ring to it,” he wrote. “No one wants that stigma attached them if they can help it.”