Saturday, February 18, 2006

Some Brief Remarks About John Burley

Before I launch into full-on analyses of John Burley, his claims, and his teachings, I think some introductory remarks are in order (and they'll hopefully clarify - at least a little - the purpose of those long lists in the previous two posts).

I first became aware of John Burley, I believe, in early 2000, via a tape set I bought, called Financial Literacy. Burley was one of the featured speakers on the set, and he talked for roughly an hour about how he had become fabulously wealthy "wrapping" single-family homes in Phoenix, AZ.

Briefly, a "wrap" (also called a "," or a "land contract") consists of buying a home and then selling it to a buyer who, for whatever reason, can't qualify for traditional financing, and so is willing to pay a premium to the investor, in the form of a higher purchase price and a higher interest rate. John T. Reed looks on these deals very poorly (see here and here), and I mostly agree with him--but I'm getting ahead of myself.

As someone who, at the time, owned two rental properties, I was immediately struck by this idea, because it seemed to provide all the benefits of rentals, with none of the downside. Of course, the hour-long discussion of the technique in Financial Literacy left out many significant details, and I wanted to learn more, so I went in search of what information there was available. It didn't take me long to find Burley's tape set Blue Print for Success, and plunk down $300 for it.

Sadly, the "course" didn't answer all of my questions, and whenever Burley would gloss over pertinent details and a member of the audience would call him on it he would simply say, "Psychobabble!" and that would be that.

Even though a very clear pattern was emerging (a pattern begun back in early 1998 with Rich Dad Poor Dad, actually), I decided I would pick up Joe Arlt's "Wrap Your Way to Wealth," which seemed a steal at "only" $149, and promised to be "very detailed" and done by a guy who claimed to be a "boot camp" attendee who was initially skeptical of Burley's techniques. It almost goes without saying that Arlt's tape set didn't offer any significant additional information, either (as an aside, I find it interesting that although I was easily able to find evidence that Burley does indeed seem to buy and sell houses in Phoenix, I have found zero such evidence in Virginia for Joe Arlt, even though he claims to "own and manage" over 400 houses. It's also a bit of a mystery to me that Arlt's tape set is no longer offered on Burley's web page, and Arlt is no longer a regular contributor to the discussions over at the Mastermind Forums. Hmmmm...).

So, in upcoming posts, I'm going to be looking in detail at what John Burley sells, what he says, and then I'll take a stab at how that compares to what he really does--or at least that part of what he does that can be more readily gleaned from the public records. I think also that I'll take a quick look at 1 or 2 of his more successful students, along the way.

Go here for the next post in the series.


Anonymous said...

I will be very interested in what you find out. Keep up the search.

Anonymous said...

I was recently directed to your site and its comments and felt compelled to respond. You state that you found zero (your italics) evidence that I own any investment properties. Just how hard did you look? For obvious reasons explained in my tape set, the great majority of my holdings are not in my personal name. However, a quick recent search of the tax records for the cities in my area revealed no less than 7 properties with my name as legal title holder. There would likely have been a few more as of your February 2006 comments, as we have sold quite a few properties since then. This is a small fraction of what I own, and I’ll be taking steps to correct the public record for even those. You could have also reviewed recent MLS listings, which would have revealed many with me as listing agent and the required disclosure “Owner/Agent”. But if this issue was of such great importance to you, why did you not just contact me directly? We’re easy to find. My company is in the phone book, the local BBB, etc. This would probably a better approach than just libeling me, to everyone with access to the web, wouldn’t you say?

For the record, I have never stated that I had over 400 properties in Virginia. At our peak we had an interest in probably 250 in that state, with the rest in several others. Due to lease option cash outs (yes, they do happen), sales, and partnership unwindings, we’re now down to around 250 total. We will likely be closer to 200 by year end, due to further cash outs, profit taking, etc.

As far as my tape set is concerned, you are certainly entitled to your opinion. The program has been off the market for several years and was never meant to be a major profit center, as I am not a professional speaker. So I have no financial interest in what you may care to publish regarding it. However, I will say that everything pertinent I knew about this business at that time made its way onto those tapes and the included CD-ROM. There may not have been detail for you, but know that there was enough for me and many others to build significant portfolios. Using just one of my methods to buy just a couple of houses a month (a very part-time effort) from 2000 (a date you mention) to now, a period of low interest rates and high appreciation (in many areas), could have been very profitable for anyone willing to make the effort. But if you don’t make the effort, or need to have every answer before you start, no program will work for you.

And regarding your innuendo concerning my discontinued association with John Burley’s discussion forum and web site, I am stunned by how badly you have missed the boat on this issue, given your obvious obsession with this man and his activities. The slightest bit of research would have revealed that we were at one time partners in a business that acquired many houses and that our association ended when the partnership ended. I’m afraid that is the extent of this “mystery.”

In summary, “investigative journalism” becomes “yellow journalism” very quickly when the journalist chooses to avoid learning facts that do not support his case. If you’ve decided that bashing people you know little about is the best use of your time, then I’d suggest spending some of that time gathering all the facts first. You will be taken a lot more seriously as a result.

Joe Arlt September 3, 2006