john reed - Posted by bob(ma)

Real Estate Investing Real Estate Gurus
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Posted by Sean on November 22, 2002 at 10:23:43:

Reference is made to Bill Bronchick’s article on the matter at http://www.legalwiz.com/dueonsale.htm

Bill quotes from ethical investigation boards that show that an attorney is ok with aiding a client to circumvent the due-on-sale clause.

Purchasing a property with a due-on-sale clause is like breaking a contract YOU NEVER ENTERED INTO. Assume there’s a house out there that Bank of America has a loan on and I buy that house. Does Bank of America have my signature on a piece of paper somewhere? Obviously not. I was not a party to the original agreement.

Show me one person that’s gone to jail for messing around with a due-on-sale clause and I’ll change my opinion.

Only an idiot would call up a lender and say that they violated a due-on-sale clause. You know some credit cards now have a clause in them that if you’re late on any of your other obligations they have the right to increase your interest rate to some exorbitant rate like 23.99 percent (the default rate).

Assuming you miss paying your phone bill (which doesn’t report) are you going to call up the credit card company and say, “I just wanted to let you know, I paid my phone bill 25 days late.” Absurd!

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john reed - Posted by bob(ma)

Posted by bob(ma) on November 20, 2002 at 13:42:08:

Has anyone ever heard of this guy? He has a website where he talks about all the gurus…he dosen’t recommend too many of them. What is his story. Is he a reliable source? Any input would be appreciated.
Bob

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Re: john reed - Posted by How bout this?

Posted by How bout this? on November 21, 2002 at 11:48:03:

Guys,
Everyone has heard of this guy!! Now we cant get away from him!! Its annoying!!
Why worry about someone elses opinion about everyone else in this industry. There is so much smack talked about this guy! Why does everyone care!! I have read his site. I wasnt too impressed, thats my opinion though.
Why does it matter what everyone thinks of this guy? Some people swear by this guy like he is a prophet and others think he is a dirtbag. So either way you go, someone is being decieved here.
Why do we even call gurus, gurus? I hate that word!! Im a guru, Im a guru, look at me Im on TV, Im a guru, Im a guru!!! This is all freakin drama!! Its like being in highschool and all the gurus are the popular kids. So then there is this band nerd who is a sorta popular kid, (you know the one miricale kid who somehow made it into the crowd), anyway he is an imposter who tells all the nerdy kids about all the bad things the popular kids are, so that the nerdy kids feel better about themselves. Okay so if it isnt like that, you dont have to agree with me either. I dont care.
Why does one guys OPINIONS freak everyone out! Who cares what he has to say about anyone! I wish everyone would just shut up about this guy!! Im not trying to defend him in any way but… it seems like I see something about this guy on one board or another EVERYDAY!! Im sure he cant be that bad of a guy!! I bet he knows a thing or two more than me for sure. I have something to learn from everyone I meet. Ive never met JTR but Im sure he has some insight in areas I do not, and I would sure be willing to sit down and learn whatever I could from him.
I know people want to be cautious and want to know what courses to buy and blah blah blah… If you are new and freaking out about what course to buy… dont buy one. You can get most of the information free anyway!! The library, this site, the whole internet, free ebooks, books that are very cheap! Courses are good though, and I bet if you have ever bought a course you were probably dissapointed with most of the material. But in each one there is a gold nugget of info that you didnt realize before. I say buy everything that you can afford, get some education under your belt, get some good contracts to work with and then YOU GO TO WORK!
I know Im kinda jumping around here but its because, if I read one more post about JTR!! MY HEAD IS GOING TO EXPLODE!! I think every site should include their own little JTR page so noone will EVER ask questions about this guy EVER again!! Its getting to the ridiculous point!
Just to clarify Im not angry at anyone here nor am I angry at JTR. I would just like for once to not hear about this guy for ONE DAY!! LETS TALK ABOUT INVESTING!!!

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Re: john reed - Posted by mike

Posted by mike on November 21, 2002 at 24:49:22:

I’ve heard of him. I’m not at all surprised he doesn’t recommend many gurus. Would you? Some of their claims are preposterous (at least outside fantasy-land). Remembering that you don’t know me from Adam and therefore consider my endorsement in that light, I’d recommend him to anyone that isn’t wound so tight they’d completely discount (ostensibly) good advice because he’s not tall enough, or too short, or is shrill, or is mean, or because of any other trait. The only part of JReed I’m interested in is does his brain work? How grating/shrill/mean he is really doesn’t tell me anything about the merits of his advice. My belief is that rarely (ever?) is there value in “shooting the messenger.”

I have no problem with his admitted lack of personal investing. Ted Williams hasn’t played baseball for more than 40 years (and is in fact now dead!) - but if I want to know something about hitting you can bet I’d get his book. Look at it this way - at least JReed’s honest about it. That’s more than I would say for many guru’s claims of “easy-peasy” riches that utterly defy common sense.

To criticize JReed because he’s blunt, bitter, mean, critical, etc. is one thing. To say that’s reason enough to ignore him (IMO) is foolish. Let his ideas/advice stand on their own. If you like them, fine - add him to your sources. If you don’t, those aren’t the only ideas/advice in the world - pick something else.

Mike

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Re: john reed - Search the Archives - Posted by Jim Kennedy - Houston, TX

Posted by Jim Kennedy - Houston, TX on November 20, 2002 at 15:04:07:

Do a search of the archives and you’ll get plenty of input.

Best of Success!!

Jim Kennedy,
Houston, TX

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John T. Reed - Posted by Sean

Posted by Sean on November 20, 2002 at 14:39:27:

Just my opinion, but I don’t place too much stock in the guy.

Why is that you ask? Well, he prides himself on his honesty and challenges other guru’s to do the same. So far so good.

As part of his honesty he lists all real property he’s owned since he started investing. From his own admission he has owned nothing but a single family residence since 1983.

This is a guy you want to go to for how to invest in real estate? A guy that hasn’t bought an investment property in almost 20 years?

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Re: john reed - Posted by mike

Posted by mike on November 21, 2002 at 19:14:03:

If I were you I’d seriously consider resisting the temptation to stop and read threads titled “John Reed” if John Reed topics will make your head explode :->

Mike

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Re: John T. Reed - Posted by Sean

Posted by Sean on November 20, 2002 at 18:11:12:

What?s wrong with John T. Reed ? one person?s personal opinion

John Reed is a Realtor who?s invested a little and has a convoluted sense of ethics that he tries to cram down everyone else?s throat. I could quote extensively from his rant against ?Nothing Down? deals but rather I?ll just sum up his objections in a word ? suitability. His contention is that you are marketing a security to an unsophisticated person that is unsuitable to them. Horrors ? you might have the SEC pull your securities license or have the NASD sanction you ? oh wait, you don?t have a securities license, nor are you a member of the NASD. Guess that won?t happen, will it?

Amazingly while it is UNCONSCIONABLE to offer a seller 100% value plus interest over a period of time it is perfectly and wonderfully acceptable to know that a house is worth $100,000 and try to buy it for $80,000 or less. In fact, he has two volumes of books entitled ?How to Buy Real Estate for At Least 20% below Market Value? volume 1 and 2. Obviously the first case is pure theft and the second case is perfectly normal, moral, legal and ethical. Also, he obviously thinks I am an idiot.

He rails on further about how bad ?Nothing Down? is, but mentions that he has the legitimate way to do nothing down deals. How? Through the magic of government grants/government guarantees. Get this ? Uncle Sam sends the IRS to your door to take money from you by force (and if you think it isn?t done by force, try not paying for a few years and see what happens) and then John Reed and/or his disciples get a hold of the money and make fabulous wealth. What?s the difference between that and me showing up at your front door with a gun, taking your money and giving it to my sister as a down payment on a house? Nothing, except that because a government did it it?s quasi-legal.

Back to the suitability issue. I seem to recall it wasn?t that long ago when investors were pushing ?widows and orphans? to buy utility stocks. Government regulated and guaranteed to have a ?fair? return on money it seemed like a great, safe way to make money, didn?t it? Well, I live in California and out here people who owned SoCal Edison lost their shirts on those stocks. Obviously there is risk in EVERYTHING and the solution is not to try to protect ?unsophisticated investors? from every bump in the road but instead teach them how to add some sophistication to their efforts.

John Reed states, ?I believe seminars that cost more than $100 per hour per attendee are grossly overpriced.? Yet I can refer you to a fantastic person by the name of Jay Abraham who charges $15,000 per seminar and $5,000 per hour to consult. Why in the world would anyone pay $15,000 for a seminar, you might wonder? Well, two reasons: (1) His information is worth it; and, (2) You can listen to half of the three day seminar and if you don?t like what you?re getting you can leave and owe nothing.

I don?t see why John Reed seems to think that he is the final word on how the free market system is and should work but apparently he considers himself one of the Anointed that is entitled to set prices for other people. He also mentioned that he believes in the death penalty for people who don?t put indexes in their work.

I remember reading a line of John Reed?s where he quotes someone (I can?t find it right now) but the essence of it is that you should buy stock that will go up and if it isn?t going to go up, don?t buy it. He goes on to say that no one can tell when stock or real estate is going to go up and it?s all a risk.

No one can tell? Or he can?t tell market trends and chooses to insist that no one can tell? I could refer you to an excellent guy right now who?s got a real estate vital signs indicator product that tells you which way real estate is going to go in the next year. I can refer you to excellent articles on real estate economics by a Nobel prize-winning economist on what causes booms and busts in cycles. Maybe John Reed doesn?t have this information, but he shouldn?t insist that NO ONE has it.

Sorry, Ron ? if you want to buy his courses then more power to you, but I won?t be spending my money on his advice.

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Re: John T. Reed - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on November 20, 2002 at 15:12:02:

Sean---------

Why are you concerned when somebody owned rental properties? What different does it make to you that he has not personally owned rental proeprties for a couple of decades?

If real estate investing changed a lot over time, I might see why you might be concerned. But it does not. The basic principals have not changed in centuries, let alone decades.

And, I think that John T. Reed has a reasonable argument that he keeps up to date on what is happening in real estate investing. He publishs a monthly real estate investing newsletter and, he says, gets several calls a day from his subscribers about their problems, difficulties, questions, etc. So he is able to keep a feel of the real estate investing situation.

Could it be that you have some other reason to want to dislike him or hold his opinions in low merit? It does not make sense to me that an intelligent person would be desparaging Jack’s knowledge gained over 20 years of real estate investing himself and a few years of property management for other people.

If one read through parts of his website, one can see his views about the people who sell real estate investing education and the consumers of that information. From what he says, he sounds sensible to me.

Good Investing*******Ron Starr***********

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Re: John T. Reed - Posted by bill twyford

Posted by bill twyford on November 20, 2002 at 19:43:11:

John does’nt like anyone, I have no respect for someone that trashes everyone, There is a lot of people like him out there, trash everyone and then hide behind their emails like cowards, If anyone out their trashes people be a man leave you phone# and take the calls when they come in, If you not going to do that then don’t trash people Mr.John T. Reed

Bill Twyford 303-838-5488

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Re: John T. Reed - Posted by Dolf Geaurinsky

Posted by Dolf Geaurinsky on November 20, 2002 at 18:45:59:

Amen! JTR is a never was wanabe who has a real estate intelligence quotient that’s less than his shoe size!

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Re: John T. Reed - Posted by Wes

Posted by Wes on November 21, 2002 at 14:35:11:

Hi Ron,

Hey, I was about to side with the others here that are talking more negatively about John T. Reed (JTR).

But, I was prompted to check out something on his site again. I read what he has to say about the “due on sale” clause, which I’ve never read on his site before.

He makes a good case about the hiding of this via a Trust (or in any other way) as being unethical and, in fact, illegal. And, that it is probably only a matter of time before things change and lenders, etc. start coming after investors that do this - which negates the following techniques:

  • Lease / Options
  • Subject To’s
  • Wraps
    …and, I’m sure others.

My question to you is, what CREI techniques do you follow in your “system” or otherwise daily CREI deals?

You don’t have to answer this (to me or anyone). If you prefer, please feel free to answer me personally via my e-mail address. But, I did want to bring out what I said above for others to see and think about.

As a “newbie” trying to decide what to do, and to do it ethically and legally - I’m not sure what I should do/who to believe?!

Thanks,

Wes

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You are indeed a STAR… - Posted by Paul

Posted by Paul on November 20, 2002 at 20:46:19:

(N/T

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Re: John T. Reed - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on November 21, 2002 at 17:18:57:

Bill Twyford----------

Come on now. Even if you don’t like Jack, at least be accurate in your criticisms, please. Don’t distort the reality.

About 20% of his recommendations on gurus are “recommend.” And I agree on his judgments on those with which I am familiar. About 35-40% are “don’t know, suggest you use the b.s. detection list.” And the remaining are negative. Some people say he is negative on people that they like or recommend. Of the people he is negative about that I have studied the materials or heard them speak, I agree with him on all but one or two.

I like it that Jack usually tells us upon what basis he dislikes a person, especially if it is not on reading the materials or hearing a seminar. I feel that this allows us to make up our own minds about whether he has enough basis to make a solid judgment or not.

You state: “There is a lot of people like him out there, trash everyone and then hide behind their emails like cowards, If anyone out their trashes people be a man leave you phone# and take the calls when they come in, If you not going to do that then don’t trash people Mr.John T. Reed” Well, Jack has his phone number on each issue of his newsletter and he
answers the phone himself when he is there. His phone number and fax number are on his home page. I have never seen any sign that he is a “coward.” He is willing to take on about anybody, I would think.

I understand that Jack does not arouse love in many breasts of those who meet him and read him. I don’t think you need to love him. But, please be accurate when you describe him.

My opinion is that he has some of the very best books on real estate investing that are available. I rate two of them within the top 5 books on real estate investing–excellent books, in my view. And I have probably read over 200 books on real estate investing. So, I feel that I have adequate perspective on the area. I don’t really care if a writer is a slob in person (Jack is not), or an opinionated person (well, yes, Jack is that), or has little tolerance for fools (definately Jack). I care that they think about real estate investing and they are willing to share their thinking with us. And, I would prefer that their thinking be analytical (yep, that’s Jack), based on experience or careful research (true, Jack again), and clearly written (well, yes three out three, Jack). He is honest and he will allow other people to express their opinions on his website. He changes his opinions sometimes and says so. He does seem to be resistent to changing his view on lease-options, as I offered him the chance to read some materials from a couple of good CREONLINE.COM postings on the topic (with the approval of the writers), and he declined. This was a disappointment to me, and I judge it a weakness of Jack. So, I am disappointed in that.

However, for people to ignore what he writes because of matters which I think are extraneous, such as the length of time since he has owned properties and the number of people he may criticize in error, means that they miss good materials. Well, it is their loss. At least I have read most of what he has to say and feel that I have learned a great deal from it. Although I still disagree with him on some topics.

Just because Jack is not warm and cuddly does not mean that he is wrong.

Good InvestingRon Starr*****

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Re: John T. Reed - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on November 21, 2002 at 16:13:47:

Dolf Geaurinsky---------------

You may not like Jack Reed. It seems that you do not. And you don’t indicate why. At least Jack Reed, in his guru recommendations tell why he gives the rating he does. You don’t even do that.

And yet, you put nonsense on here about him. It is obvious to me that you are an unreliable source of information about Jack Reed. I hope that everybody who reads your sillyness will completely ignore it.

Please–in the future write in terms of something being your opinion instead of writing as though you knew something about what you were saying–as you obviously do not in this ridiculous post.

Good InvestingRon Starr****

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Re: John T. Reed - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on November 21, 2002 at 19:42:26:

Wes Lusk------------------

Well, I have done a few subject to deals, a few owner-carry after significant downpayment.

The last the subject to deal, I told the lender I was the new owner and they called the loan due. I thought I could get them to change their mind or stall them off by putting the title into a partnership name and then putting the partnership into bankruptcy.

It worked for a while, but they did foreclose on me before I could get the property sold. That was probably about a $40K loss of equity. I was into the property for about $5K or so, plus my labor fixing it up. And then the renter stopped paying the rent when the default was filed. Oh sigh.

So, I think that there is a realistic concern about the due on sale clause. I think if you are going to use that approach that you do want to hide it from the lender. Then, it is up to you whether doing that is within you moral or ethical standards. Some people say that many lenders do not care about the property changing hands. Maybe not, but some do. And when interest rates on mortgages go up, many more may call the loans due.

My current investment method is to buy rent houses at the county tax resales in OK state. All cash at the auction. Not “creative,” but I don’t buy unless “the price is right.”

Good InvestingRon Starr*

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Re: John T. Reed - Posted by Wes

Posted by Wes on November 22, 2002 at 08:46:11:

Ron,

First of all, kudos to you for being honest and for giving full disclosure in your subject to deal. I’m sorry that it didn’t work out for you in the end. It does seem like they would rather have the long-term cashflow from the interest and keep a foreclosure judgement off their books, as long as they have some certainty that you will continue to pay them reliably. I plan to look into this further (from many ways).

After reading John T. Reed’s (JTR’s) “The truth about getting around due-on-sale clauses” article (The truth about getting around due-on-sale clauses – John T. Reed), I agree that there is a very realistic concern about the due-on-sale clause - and I also believe that to be an understatement. I also agree that if using any of these approaches/techniques/niches, one should not hide it from the lender (now that I’ve read his article!). Based on what JTR writes, I agree with him when he states, “In general, you should never do anything that cannot stand the full disclosure test. That is, if the deal could not be done if everyone involved, including all lenders, knew everything that was going on, the deal is probably unethical and illegal. The typical lease-option acquisition cannot be done unless the existing lender is kept in the dark about the change in control and occupancy of the property. The bottom line here is that breaking laws or contracts is a serious thing.”.

You say that it is up to each individual whether doing this is within one’s moral or ethical standards. But I would add that JTR makes a very good case (giving MANY specific examples) for the fact this is also “illegal”, not simply immoral and/or unethical. I agree that each individual must decide how they will proceed in CREI (using each individual’s free will), I just wanted to make people aware of this - because if I hadn’t read it I would be performing RE transactions that would be unethical, immoral, AND illegal!

So, I want to give as many CRE investors (from “newbies” to the most successful like yourself Hal Roark, J.P. Vaughan, etc.) this information so that they can make a more informed decision on how they will conduct themselves in this “business” - beginning now.

I agree with JTR about the “lenders don’t care about the “triggering” of the due-on-sale clause” myth - as JTR states, if this were true then why not simply be truthful and fully disclose to the lender that the property is changing hands, etc.

I also agree with you and JTR about the interest rate issue - I see this as just one likely scenario in the future of CREI. JTR also states, “In his article on the subject, William Bronchick says that lenders don?t care about enforcing due-on-sale clauses these days because market interest rates are low. He says, ?This trend will probably continue so long as interest rates remain within a few percentage points of existing loans.? That may be true, but it implies an unspoken corollary: ?This trend will probably NOT continue if [market] interest rates rise more than a few points above existing loan [interest rates].?”

It’s just too hard to overlook this!

I hope this is useful to some on this message board - I may have to re-post this as a separate post…in order to “get the word out” more effectively (and on many other REI message boards). :wink:

Thanks, Ron for you openness and honesty in sharing of your experience.

Wes