Concerns Regarding Focus on Foreclosure
A Three-Day Course Presented by
Wealth Intelligence Academy, Inc. (a Russ Whitney company)
Denver, Colorado
April 3-5 2007
Denver Holiday Inn Airport
The Focus on Foreclosure course did not meet the educational objectives spelled out in the WIA confirmation letter. It is a scam. 1. The 5-steps of foreclosure investment — not taught, only mentioned. 2. How to avoid the crowd and find foreclosures fast — worthless. 3. How to negotiate & buy real estate at up to 50% below market value — very weak content, common sense. 4. The key to using other people's money (and where to find it!)— the primary focus of the day, telling you how to increase your credit card limit to $50,000 so they can sell you all their "advanced" courses.
The three-day course had a sales purpose, not an education purpose, including the followings sales objectives: 1. Sell student enrollment packages of costly advanced training. 2. Persuade students that knowledge from WIA advanced training will make them wealthy. 3. Persuade students to increase their credit card limits to cover the costs of the advanced training, and, if they did not, induce guilt by public embarrassment. 4. Persuade students that financing of real estate investments is available, easy to get, has low risk, and not accountable (by using other people's money). 5. Sell mentoring services to students (knowledge is the key, the primary instructor said, offering emails from several students who flipped houses, increased cash flow through purchase of mobile homes, etc.). He stated, and read an email, that one couple had made $70,000 in their first deal while taking the course. Most testimonial student emails were not impressive. His personal examples of real estate transactions included cheap starter homes that had less than $75 positive cash flow, a pending mobile home park, and the pending deal with the company president.
Scott Zuckman, the primary instructor, followed a memorized script, did not permit discussion, and used indoctrination techniques.in-depth research (always check those you are considering doing business with), he does not, as he stated, own the property he lives at, 21203 Lochmere Lane in Katy, TX 77450 (a suburb of Houston) it is owned by a couple unrelated to him or his wife, although he lives there (county assessor records online). He is not, as he stated, a graduate of or major donor to Boise State University (BSU alumni association, BSU registrar, and BSU foundation). He never owned, as he stated, a property in a Los Angeles suburb which he stated he lived in (Intellius background check of public records) and sold at a loss when he was reassigned to Houston. While stating he is an independent contractor, not an employee, and that he does this training to help students, implying that he is independently wealthy, during a break he stated he had done the course last week in Los Angeles and is doing it again soon; also, he referred to another trainer as doing the same course he does. Note: an independently wealthy real estate investor does not do trainings to help others, does not rent property from others, does not refuse to provide his provide email address to students who have signed a contract and requested his services as a mentor. During the course, he demanded that no one exchange business cards, that it was the policy of the Holiday Inn Airport convention center not to permit the exchange of business cards this is not true (Holiday Inn Airport catering manager). He also prohibited the creation of a list of students. When questioed on this approach, he said it is his personal policy (no one "teaching" a Russ Whitney course is permitted to have personal policies). On the morning of the second day he stated that he had kicked out several real estate agents for exchanging business cards. This is a strange policy for a company that stresses the importance of networking, sells mentoring, and is associated with a company that sells WIA student lists to nonprofits (Whitney Education Group online service).
The primary instructor showed a video tape of WIA founder Russ Whitney (co-owner of WIA and president of parent company Whitney Education Group, Inc.) In the video, Whitney said he had bought undeveloped land, then increased its value by platting, bought land in advance of development and has been offered millions for the land (the only property owned in that community by Russ Whitney is a single family home, no land county property records). He stated that both the CEO and himself had only recently begun investing in raw land (an unbelievable statement by an instructor of a seminar by a company that shows a slide that states the company is the world leader in training for real estate investing).
He and several other WIA representatives said the company has 20 years of experience WIA was formed 2 years ago while Whitney Education Group was formed in 1992 although uses 1985 in its online advertising.
The instructor bragged about a half million dollar gain he will realize from the sale of property he bought with Russ Whitney (a violation of the companys online published ethical standards) in Costa Rica. AMong his misleading statements that were very easy to check, he stated that the advanced training on asset protection is scheduled for Denver; only one course is scheduled for Denver, not on this subject. He clearly did not know what courses were offered, where, and when.
He spent more time selling WIA advanced training, the WIA superconference, and WIA mentoring as the rest of the curriculum combined. As stated above, the first day's assigned homework was to contact credit card companies and to increase credit limits, using a script provided in the course book (this was the only skill taught and practiced, and it worked, but the purpose was to increase student credit limits to pay for advanced traning). Students were asked to make reports on what they did and how much credit they increased these "reports" began both the second and third days. Students who had not done their homework or reported less than satisfactory results (did not have a combined available credit limit of $50,000) were criticized in front of the entire group or otherwise embarrassed.
His recommendations on forming a real estate investment business included the rudimentary basics of starting a sole proprietorship (buy a computer, sell it to your company, keep records, etc.) and suggested the main purpose is to be able to use the deductions against other income — this purpose contradicts the instructor's claim that we would all become wealthy. If you are wealthy, you would quit your other job! Some of his guidance was identical to that provided by The Tax People before they were put out of business by the IRS i.E., each day, put a magnetic sign with your company name on the side of your car, then at every stop (such as the grocery store or cleaners), give everybody your business card and give them a sales pitch, then you can deduct all auto costs (duh!).
He stated that the main purpose of forming an LLC in which to place real estate is anonymity as part of the legal process, which limits or reduces legal accountability (Russ Whitney has apparently done this successfully for years). He advised students to create a name for their business and start using that name, that registration with the Colorado Secretary of State's office is not necessary to start a business (that may violate the law in Colorado). He said the IRS does not care (go ahead, make my day!!!).
Persuasion techniques used in the three-day course included physical stress, mental stress, and high pressure sales tactics (these are not education and training techniques — I have 7 years full-time college level academic experience, served as the Exec VP for a national training company, have doctoral work in 3 disciplines, including education and communicatin). Those techniques were: 1. Limiting student interaction by threatening expulsion if students exchanged contact information and not permitting questions during class sessions. 2.increased physiological stress through low room temperature and excessive instruction time without breaks (sound familiar to mild forms of "torture" used recently on enemy combatants?). 3. Refusing to provide trainer contact information when requested (even after students signed contracts for advanced training). 4. Belittling students who left early or had not decided to contract for advanced training, and demanding anyone who had not signed a contract leave the room. 5. Belittling realtors and real estate agents (are there any still here?). 6. Claiming that success only comes through "creative" financing, control of paperwork, and maintaining anonymity from legal responsibility (as the former chairman for my professional society's board of ethics and active in the business community of a large city, stay away from such advice — it sucks big time!!!). 7. Using questionable (illegal in Colorado?) sales contracts that allow the seller to charge or process the payment from the purchaser immediately even though the written contract has a 3-business-day right of cancellation (I tested this procedure; my VISA was charged; I got my money back — but they actually violated the law). The primary instructor asked purchasers of any of the advanced courses, in a special private session, to review the materials and email him (thru WIA, not directly) after his return from a 4-day vacation to Hawaii (rich guys get to vacation in Hawaii!). Anyone who followed this advice would be unable to contact him before the 3-day right of cancellation period had expired. He probably really believes there's a sucker born every minute!
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