Financial Guru Produces a Big Return : Marketing: The former ‘no money down’ real estate promoter has new products to push. But his latest business isn’t without controversy.
Tony Hoffman, a get-rich-quick-with-no-money-down guru in the real estate business during the 1980s, has reappeared, peddling car wax, toasters and other products in half-hour TV commercials that resemble talk shows.
Hoffman is seen regularly on local stations as the “host” of commercials for Liquid Lustre, a car wax, and Kwik Snak, a toaster-like kitchen appliance, both of which are marketed by a Scottsdale, Ariz. company called Twin Star Productions Inc.
The Federal Trade Commission and several states, however, have forced Twin Star to stop selling other products on television. The states said the ads--including one hosted by Michael Reagan, son of the former President--are misleading. One of these, a “diet patch,” is supposed to aid weight loss when worn next to the skin. Hoffman said in a sworn statement that he was “involved in” making a Twin Star ad for the diet patch.
Hoffman is president of Maui Productions of Thousand Oaks, which, along with Venture Marketing Group in Westlake Village, puts together his TV ads.
Hoffman, 48, who made a name for himself as a get-rich-quick real estate guru in the mid-’80s. At his peak, he was the host of “Everybody’s Money Matters,” a daily investment talk show he bought time for on cable TV. On it, he peddled his 16-cassette $495 home study course on behalf National Superstar of Westlake Village, now defunct. Among other advice, Hoffman promoted the idea of using IOUs to buy real estate from people desperate to sell, then quickly reselling the property for a profit.
In the mid-’80s, some industry estimates put the income of all such real estate promoters at $150 million a year.
But the fortunes of Hoffman and the others declined as inflation fell and tax changes affected deductions for second homes.
For a while, though, Hoffman thrived. Hoffman said he was worth $10 million in 1986. He traveled in a chauffeur-driven limousine and showed off the Salvador Dali art in his home.
But National Superstar lost $2 million on sales of $21 million for 1985, and it lost another $1.2 million for the first nine months of 1986. In October, 1986, National Superstar filed for bankruptcy, listing $661,000 in assets and $3.6 million in debts. Included in the debts was $1.4-million worth of refunds owed to 5,710 customers. The company was eventually liquidated.
Hoffman filed for personal bankruptcy in April, 1988, listing $831,050 in assets and $6.8 million in liabilities, many of those debts of the company.
Still, Hoffman said recently that there was nothing wrong with his real estate advice: “The courses work. That had nothing to do with the downfall.” The big problem, he says, was there were too many other promoters.
He is bringing the enthusiasm he put behind his real estate schemes to his latest pursuit.
In his car polish commercial, for instance, he declares, “I’ll tell you that is the best wax I have ever seen in my life.” The commercial, called “Incredible Breakthroughs,” has an “audience” that is asked to help demonstrate the product. Its members are usually friends, relatives and paid actors.
“A one-step application will clean, wax, protect the automobile, take off the over sprays, the leaf imprints, the bird stains, the road film, the tree saps and tar,” the pitchman in the ad says. “It completely emulsifies it.”
Hoffman said he has made nine segments of “Incredible Breakthroughs” since November. Other products advertised in them include a tooth whitener and a memory-improvement course.
Six of the segments were made on speculation: Hoffman found a product, produced an ad and found a marketing company such as Twin Star to pay him for the segment. That company buys the air time and handles the telephone marketing. He declined to say what other companies he has produced commercials for.
In Los Angeles, Hoffman’s ads run with disclaimers saying the stations are not responsible for the ads’ contents. A spokeswoman for one of the stations that runs the ads would not say exactly how much Twin Star pays for air time, but she did say that a half-hour slot in the morning, when many paid programs are broadcast, typically costs about $1,000.
According to a filing with the Securities and Exchange Commission, Twin Star, which was founded in November, 1987, posted net income of $126,913 on sales of $27.2 million for 1988, and that it earned $505,582 on sales of $21.9 million for the first nine months of 1989.
But Twin Star has also been the target of government efforts to end such commercials.
The state agencies were especially concerned with the diet patch. Some states said the product does not work and that the ads for it looked too much like consumer programs.
