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Your Moderator, Robert Paisola, Pictured Here, is an international trainer and expert on the subject of Real Estate Investing. This article was published today by the Boston Herald in Boston Mass.
John Alexander, a Texas real estate entrepreneur, has prospered selling his techniques to thousands of people looking to profit from property sales. So why did he meet personally two times with ex-felon Dwight Jenkins in Massachusetts, and allow Jenkins to record a testimonial on his Web site?
Texas real estate guru John Alexander has built an infomercial empire by selling $39.95 how-to videos, hosting seminars and running a hotline for people looking to make fast money “flipping” houses.
He calls his technique the “inverse purchase,” and one of his pupils was Dwight Jenkins of Dorchester, 36, the ex-felon who is being sued by eight local investors who claim Jenkins defrauded them.
“I got the program from him,” Jenkins told the Herald in an interview. The two met twice in the Bay State, and Jenkins is still featured on two of Alexander’s Web sites as a profit-making success story. In one testimonial to Alexander, Jenkins said he made $1 million in one year and bought “toys.”
“Well, I made a lot of money. Last year I made over a million dollars; this year was good for me also,” Jenkins says on video at johnalexander.com, under a heading reading Real Estate Riches In 14 Days. “I brought me a couple of toys, like I said, I bought a Porsche Carrera C2 with the rims, the TVs, the whole package,” Jenkins says.
In an e-mailed statement to the Herald yesterday, sent by attorney Larry C. Russ, Alexander distanced himself from Jenkins.
“On two occasions, about a week apart, Mr. Jenkins asked me to attend two separate meetings in connection with certain real estate investments. After the meetings, I decided not to pursue any business relationship with Mr. Jenkins,” Alexander said. “I also advised one of Mr. Jenkins’ former investors to seek legal counsel in connection with her business dealings with Mr. Jenkins.”
Alexander said his investment strategies are “completely legal as defined by Fannie Mae standards.” Fannie Mae is a governmemt-sponsored company set up to buy and sell mortgages.
“Nothing in my course materials would ever suggest or condone making false statements to anyone,” Alexander said. “Rather, my methodology is based upon full disclosure to all parties.”
Jenkins is named in three civil lawsuits filed in federal court and Suffolk Superior Court that accuse him and others of fraud and conspiracy. Alexander is not named in any legal action against Jenkins.
The federal suit against Jenkins, brought by Robert G. Smith and Maria E. Dasilva, asserts that the two first-time home buyers obtained hundreds of thousands of dollars in mortgages to buy homes based on loan applications that were falsified by mortgage brokers.
Jenkins is accused of steering Smith and Dasilva toward homes they could not afford, and pressuring them into signing mortage loan documents that contained “false and misleading information.”
Jenkins says he was nothing more than a middleman in the transactions, did nothing wrong, and the investors knew all the risks.
“First, the conduct described in the lawsuit, whether true or false, bares no relationship to the real estate strategies I teach my students in books, tapes, seminars and coaching,” said Alexander.
“As well, I have never engaged in any transaction with Mr. Jenkins or any of the other defendants named in the recent federal court action filed in Boston,” he said.
On his Web site, Alexander tells his students: “Many people can’t qualify for a home loan. They need your help with financing options which we provide you with and educate you in. This puts you in the profitable position of being the MIDDLE MAN/WOMAN. You become the one person controlling the money that can bring the transaction to a closing. They can’t close without you in the picture.”
The middlemen make their money at the closing, when they receive a check for the difference between what they bought the house for and what it was resold for to the buyer, the site states.
The Herald reported Sunday that Jenkins earned $905,000 as a middleman in 17 real estate transactions that are now in dispute.
“I have 25-plus years of teaching thousands of students real estate investing,” he said. “As far as my methods of investing in real estate are concerned, my techniques are legal and would not be defined as predatory ‘flipping.”’
Consumer criticism of Alexander relates to allegations about deceptive marketing practices and unauthorized credit card charges, according to a company report prepared by the Better Business Bureau of Colton, Calif.
The BBB gives Alexander an “F” rating for his Van Nuys, Calif., company. In an online report, the BBB states that Alexander advertises a BBB membership on his Web site, richesin14days.com, when it is not, in fact, a member.
The most common complaint has to do with credit card charges for access to a hotline service, according to the BBB report. When consumers buy the start-up package for $39.95, they qualify for a 30-day trial of “John’s Unlimited Access On-Demand Hotline Advisory Service” and monthly teleseminars, the BBB report states.
That offer comes with a “negative option cancellation clause.” That means if consumers do not cancel the service within the 30-day trial period, their credit card will be charged $39.95 monthly for enrollment in Alexander’s “14 Days to Real Estate Riches Club,” according to the BBB report.
Ed Magedson, founder of the Web site, ripoffreport.com, said Alexander’s company has improved dramatically in terms of its customer service in the last year.
“From all the calls that were made from the people that filed a report, they were refunded their money or they felt that their report was premature,” said Magedson.
The BBB report also asks for substantiation about the advertising claim that buyers are able to obtain “riches in 14 days.”
“If this was such a red-hot deal, you’d think that is where they’d be making the money. Why sell the opportunity?” said Gary Almond, vice president of operations at the BBB of Southland, Calif.
Alexander stood fully behind his real estate teachings.
“The ‘flipping’ strategies I teach are fully sanctioned by Fannie Mae, because my strategy does not promote the sale of property at inflated prices, nor do I recommend making false representations to lenders,” he said in his e-mail.Poste
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