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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: David Jones who wrote (25801)	12/9/2004 9:12:54 PM
From: Elroy Jetson	Read Replies (3) \| Respond to of 306849

That's a good list. My business partner and I have a friend who fell in with one on the list, Dave Del Dotto. When we were all about age 30 our friend drove a Ferrari and owned and managed $35 million in apartment buildings having started seven years earlier with no starting capital to speak of. We wondered how this was all possible. Our friend appeared frequently on Dave Del Dotto commercials promoting their scheme. Today at the age of 50 he rents a small shabby apartment from someone else and drives a used Geo mini-car. Before losing all of his buildings, he spent nine months in jail as a slumlord. He makes his "living" teaching scam techniques to others trying to prevent foreclosure of their home by filing multiple bankruptcy petitions and other skulduggery. He finds his clients by stapling flyers to telephone poles. How glamorous. I love the description on the website you posted a link to. Dave Del Dotto (Hawaii and Modesto, CA)—I do not recommend Former sheetrocker from Modesto who did infomercials featuring himself sitting on the beach in Hawaii. I debated him on Larry King Live. Del Dotto strikes me as the dumbest of the famous gurus. In one of the books he sold with his home-study course, he said to take advantage of a Farmers Home Administration loan. If you're not a farmer, he said, get one to "front for you." Many of the other gurus give similar advice. But Del Dotto is the only one I know dumb enough not to understand that the standard, get-rich-quick-guru way to deal with the issue is not to mention the farmer requirement. For the record, getting a farmer to front for you in a loan program that's for farmers only is a felony. Del Dotto's Modesto headquarters was foreclosed in the '90s. The Wisconsin State Bureau of Consumer Protection published a Guide for Wisconsin TV stations which lists several "Questionable infomercials," among them those of David Del Dotto. In the 6/8/98 Newsweek, Jane Bryant Quinn said that Del Dotto had gone bankrupt. I still see him on TV, only now this one-time "real estate expert" is selling products unrelated to real estate. The WA attorney general sued Dave Del Dotto and his Affordable Housing, Inc. The suit alleges Del Dotto made numerous misrepresentations about real estate investing, some of which violate a U.S. District Court order. It also accused him of acting as a broker without a license: he collects $500 deposits to be credited toward closing costs for a mortgage which he will help them get. The court papers said Del Dotto was a principal in a firm that filed bankruptcy and has been the subject of repeated enforcement actions by regulators, including the FTC and the Insurance Commissioner of Hawaii. They also allege that he tells seminar students inaccurate information, i.e., that they can pocket the proceeds of government-insured home-improvement loans, that they can get mortgages for 1% to 3% less than less informed consumers, that his customers typically make a profit in real estate using his system, that you can get free-and-clear title to a house by simply paying back taxes of as little as $500, that it's easy for people with bad credit to buy houses for nothing down, and that you can add $50,000 equity to a home by painting and adding carpet. In short, WA says Del Dotto "charges high fees for information which is virtually worthless, outdated, and unethical." WA authorities were seeking a restraining order to prevent Del Dotto from holding a seminar in the state. Court papers reveal previously unknown facts about Del Dotto: IRS placed a lien on his Hawaii house in 1993. In 1995, Hawaii sued him for nonpayment of $5,000,000 in loans. He filed for Chapter 7 personal bankruptcy, and his corporation filed for Chapter 11 bankruptcy in 1995. In 1996, he agreed to pay a $200,000 fine to the FTC. What's new here is that government authorities have finally become appropriately aggressive in pursuing guys like Del Dotto. Unfortunately, the gurus seem to be ignoring the authorities to an extent, witness Del Dotto's alleged ignoring of a previous federal court order. Another new development: many gurus have begun to structure their pitches so as to run afoul of securities and licensing laws. Many investors originally came into real estate as a result of pitches from gurus like Del Dotto. Too many investors still have vestiges of those original pitches in their real-estate-investment programs. See also David Martin's letter.