Oh, All-Wise Ones, Your Tongues, Pens Betray You

I am often asked what I think of a particular real estate guru’s seminar or home-study course. In many cases, I don’t know the work of the guru in question, but I can make some general observations about the “BS artists” in the field that you can use to spot them.

1--Emphasis on luxurious lifestyle. Gurus I respect, such as Bill Tappan (author of “Real Estate Exchange and Acquisition Techniques”) and Robert J. Bruss (nationally syndicated real estate columnist) rarely mention the lifestyle you will enjoy if you buy their products or follow their advice. Although they are successful in real estate, they see no need to write about being rich or to wear their affluence on their sleeve (or around their neck or pinky).

On the other hand, BS artists feature the lifestyle of the rich in their TV ads, come-on speeches and “how-to” materials. They also accessorize themselves with ostentatious jewelry and rented limousines.

2--Subjective self-description. The “about-the-authors” of the gurus I respect are generally written in Jack Webb “Just the facts, ma’am” style. “Landlording” author Leigh Robinson, for example, describes himself in one sentence: “Leigh Robinson is landlord to 360 tenants and lectures in landlording for University of California Extension.”

In contrast, the BS artists tend to have book jacket or ad copy that describe them as the “leading real estate expert in the United States today” or the “No. 1 most-sought-after . . . .” Their bios are full of baseless, subjective adjectives and nouns, such as innovative, famous, spectacularly successful, authority, etc.

BS artists often use photographs or videotape of themselves hanging around executive jets, limos, yachts, mansions, five-star hotels, exotic resorts, or expensive cars to imply that they have achieved great financial success.

3--No pitfalls or corrections. There are dangers in everything, but you rarely read about danger in a book by a real estate BS artist or hear about it in one of his cassettes or TV “infomercials.” Everybody makes mistakes, but you rarely read about a guru’s mistake or see a correction in a BS artist’s newsletter.

The BS artists are self-proclaimedly big on being “positive.” And one of the things they’re positive about is that the dream world they depict will not be marred by unpleasant reality.

On the other hand, worthwhile gurus such as John Beck (Distress Sales Report), are as likely to write about mistakes made (often by the guru himself) and dangers overlooked as about spectacular profits achieved.

4--No bad news. Besides teaching techniques, real estate investment gurus have to respond to news such as court decisions, legislation and economic trends. Of course, some of the news is bad. But the BS artists invariably respond to bad news in Pollyanna fashion. They always see “opportunity,” the closest they come to acknowledging the unhappy truth is to describe a situation as a “challenge.”

The Tax Reform Act of 1986 was a good litmus test. Any investor whose IQ exceeds his body temperature knows that it was the worst tax law for real estate investors since the income tax was invented. But when it passed, the BS artists called it “the best thing that ever happened to real estate,” or words to that effect.

Why do they do that? For one thing, they fear bad news will depress sales. With good reason apparently. A bunch of real estate newsletters have gone out of business since the Tax Reform Act of 1986 and the late-1980s real estate depression hit many markets.

Another reason BS artists don’t acknowledge bad news is that they simply cannot shut off their slinging mechanism. They are BS kinda guys.

There’s nothing wrong with looking for opportunity in ostensibly bad situations. You only become a BS artist when you look for it, can’t find it, but claim it’s there anyway.

5--Universally applicable techniques. The various techniques one can use in real estate investment are like mechanic’s tools. The one you use depends on the situation and your goal. Just as no tool is appropriate for every mechanical job, neither is any real estate investment technique appropriate for every situation. Each has advantages and disadvantages, and most are only useful in a narrow range of circumstances.

The BS artists trot out one obscure technique after another in an effort to impress the customer with all the “new” material they are getting. But rarely is a word spoken about when the technique is appropriate. The reader or listener is left with the impression that the technique is appropriate for any and every acquisition.

6--Emphasis on motivational material. Every successful person I know has benefited from motivational books such as “The Power of Positive Thinking.” Many of us have had life experiences such as emotional high school football pep talks that gave dramatic evidence of the power of focused motivation. I would not diminish the role of motivation in success in real estate or any other field.

However, motivational material ought to be packaged as such. When books or tapes are described as containing how-to information on real estate investment, they ought to contain little or no motivational material. The protest that the customer “needs” to be motivated is beside the point. It is dishonest to promise how-to information then deliver a bunch of “You-can-do-it” platitudes instead.

7--Claim to do lots of deals. Virtually all the BS artists say, “I don’t just teach these techniques. I use them every day in my own investment program.”

Baloney. There aren’t enough hours in the day.

Gurus get the same 24-hour days as you. Being an expert takes time. They have to read many trade journals, loose-leaf services and books to keep up to date. They have to spend hours on the phone interviewing sources for their articles and books and hours in the library researching legal cases and other relevant facts.

As experts, gurus get interviewed by the media on the phone and in radio and TV studios, and they make speeches to investors.

Finally, they have to manage the guru business itself. That means designing brochures, responding to customer-service problems, checking proofs from the printer, indexing books, negotiating with printers and recording studios, going over the income and expenses of the guru business, and so forth.

Obviously, they do not, after all that, have as much time as non-gurus do for investing. But in the financial guru business, the question, “Are you using these techniques yourself or just teaching them?” is ubiquitous. And any answer but, “Oh, yes,” seems devastating to the credibility of the guru.

In fact, real estate gurus (other than those who just dabble in guruing) who do a deal a month or more are extremely rare. Or they are buying garbage properties by the dozen . . . with little or no analysis or due diligence mainly so that they can claim they do lots of deals and be technically accurate.

In pointing out some of the revealing habits of the BS artists and the gaps in their information, I do not mean to imply that I am simon-pure. Among other faults, I am often tactless and sometimes speak with more conviction than my knowledge of the subject in question warrants.

But when it comes to BS, I try my best to avoid it. My main complaint about the real estate BS artists is that they appear not to be trying to avoid BS. Indeed, they seem not to care whether they sling it or not.

Rather their only criterion appears to be, “Will the suckers swallow this and send me more money as a result?”