Saturday, August 04, 2007

The AZ Millionaire Makers

I first heard about Travis Hoover and Mark Saenz via the Nouveau Riche University recruiting meeting I attended back in May. Their absurd, unmistakable vehicle was parked out front. Some days later, on a whim, I figured I'd check out the web page the Humvee was promoting.

If you've read my other posts about NRU and somehow find yourself still on the fence regarding whether or not to "invest" any money in an NRU "education", a cursory inspection of Mark and Travis's page should remove all doubts. One glance at it and my scam detection meter's needle is pegged!

Some of the red flags it raises include

  • Absurd, "too-good-to-be-true" claims
  • The use of phrases like "secret", "wealthy", "rat race", "proven system", etc.
  • The "we were skeptical too" storyline
  • "Proof" consisting of a screenshot of a spreadsheet (!)
  • Invoking the name of Robert Kiyosaki
  • Overuse of bold text and exclamation points
  • Emphasis on lavish materialism
  • Failure to reveal what their "leveraged business" actually is
I'm sure I'd come up with some more if I kept thinking about it.

What the page doesn't tell you was made clear to me on the day I went to the NRU recruiting meeting: Mark and Travis's "leveraged business" is Nouveau Riche University. They want to sell you on NRU so that you'll want to then sell others on NRU, too. It only makes sense.

Given how obviously gung-ho these two are on NRU and its product, I have to conclude that they must both be powerhouse real estate investors, to boot. Don't you think? Why would they sell the product if they didn't believe in it? Soooo... I looked into it.

Travis Hoover

In October 1998 Travis lived in a house in Chandler, which he purchased for $122,305, taking out a $116,180 loan against it. He sold it in October 2003 for $175,900 and, presumably, used the proceeds to buy another house in December of 2003, for $210,173. His first loan was for $168,000, followed several months later by another loan for $43,000.

In April of 2005 Travis took out another $92,000 loan against his house, though it doesn't appear that he used any of it as a down payment on what appears to be his first and only investment property. Purchased in July for $235,000, Travis took out a $188,000 first and a $47,000 second against it. It seems he's now trying to offload this property on someone else. A search of the ARMLS shows an expired listing (MLS # 2408725) with an asking price of $269,900, and a currently active listing (MLS # 2658372) with an asking price of $240,000. This investment appears to be a big loser! I guess Travis only heard of NRU after he bought this place?

Mark Saenz

Mark at least appears to have been an entreprenuer (not counting his current stint as a millionaire maker, I mean). He also apparently has owned more than one investment property. For example, he bought a house with 100% financing in September 2004 for $710,000 and then sold it in February 2005 for $865,000. Sure, this was during the peak of the housing bubble frenzy, so anyone with a pulse was making money in real estate, but $155,000 (less transaction costs) in less than 6 months is nothing to sneeze at.

It seems that Mark has been putting the growing equity in his home (purchased in February/March of 2004 for $152,590) to some use over the past few years. Initially, he had two loans against it - one for $125,272, and the other for $31,318. Then, in August of 2004 he took out another two loans, one for $177,600, the other for $22,200, paying off the original two loans shortly thereafter, leaving roughly $23K in spending cash. Roughly a year later Mark took out another two loans against this house. This time they were for $280,000 and $82,290. Paying off the previous two left him with over $160K to play with!

Who knows what he did with all that money though? He didn't use much of it to buy this place or this place. Both those houses were 100% financed. He sold one of them in March of 2006, though I can't imagine he made much money on it, since the sale price was $242,000. Given the rental market I doubt seriously he's making any money with the other one, either, at this point.

Then there's this oddity. I confess that its details are beyond my expertise. As near as I can figure it, Mark loaned someone $26,880 and secured it with a note against the house, then the loan was paid off by May, 2007.

Now, I can almost hear the screams of "What about asset protection and corporate entities? Maybe Travis and Mark have cut huge swaths of property, but they're all hidden away in LLCs!"

Well... maybe. However, I've looked them up in the AZ Corporation Commission records. All I was able to find were 3 LLCs: 3 Amigos of Arizona, I Can Learn Anything, and The Saenz Organization. None of those entities own any real estate in Maricopa County.

So, that's it. I don't know about you, but it sure seems to me that $16K is an appallingly high price to pay just to learn how to buy a few houses of questionable profitability via your own apparently excellent credit. The implication of all this, by now, should be abundantly clear (and not at all surprising, when you think about it). The real point of NRU isn't the (bogus) real estate investment education. It's the selling of the (bogus) real estate education - or, more correctly, it's the selling of the selling of the (bogus) real estate education. MLM all over again.