Have any of you heard of John Alexander? Inverse Purchase?

[cowboybuboy]

I saw an ad about inverse purchase. It's by John Alexander. Any feedbacks about this program?
Thanks!

[realestate1022]

has anyone responded to you?  I would love to hear if anyone has had success with him.

[cowboybuboy]

No, I haven't received any feedbacks from this course. But I think the idea is pretty much contract flipping as mentioned in their website.
Just don't know how they do it.

[Redtigress]

I did respond to cowboy, too bad he apparently doesn't remember (

[cowboybuboy]

Oh, yeah, redtigress gave me a little bit of info.
I guess I'm interested with their level 2 program. Is it worth it for $1500? Is it doable?

[reud]

I have done my research on this guy before. You always need to do extensive research on people you want to buy courses from. Because of my extensive research, i ended up not purchasing about 8 out of 10 courses, which saved me thousands of dollars.

I recommend anyone to do atleast 1-2 hours of research on an author and from the research come up with a decision about the author and what they are offering.

If you do a big search on Creonline.com then you will come up with alot of negatives on this course and the author.

Here is a post that was posted recently from a guy who lost money and I believe was taken to court:

Posted by Trent:
I have been an investor for 14 years. Made my mistakes,etc,etc.

I love learning new methods and having more tools in my toolbelt.

With Russ Whitney and Robert Allen, come on guys, these gurus are not good at all. I went to all their training, spent upwards of $25,000. I might have learned 1 thing from both of them that will save me a few thousand while im still investing. But those scenarios are rare that they will come up.

Overall they are not worth it to the newbie or experienced.

With John A's course, bought the package, implemented the techniques right away and 2 months later I closed 3 deals. after 3 months I got a call and letter from the Attorney Generals office. They are suing me. Went to court and lost because the techniques are not legal. Lender sued me and then the owner sued me. I lost both cases and upwards of over $20,000 on each suit.

Now I took the course last year-05.

Beware.
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So from that I decided to save my money and put it towards some deals.

Make an informed, wise decision.

[realestate1022]

Thanks for your help Redtigress.

Reud had an interesting log quoting Trent about John Alexander.  Does anyone know what was done with assigning that was illegal?  I've been under the impression that assigning was legal.  

[Redtigress]

If the person being sued didn't do things exactly right that's what went wrong.

Basically the JA system is this:
1) Locate a FSBO
2) Negotiate a deal with the seller.
3) sign contract including clauses that allow you to show the house.  Also have seller sign investor's disclosure notice.
4) Show the house 2x per week for 2 weeks
5) Take mini cred apps from sub prime buyers
6) Send them to your sub-prime mort broker
7) Get one under contract (the one most qualified to buy house) for full Appraised value
8.) Send seller an invoice that the seller signs agreeing to pay investor the diff between his purchase and the appraised value
9) Fax seller copy of investor's contract with end-buyer
10) End buyer and seller go to close.
11) Title company or closing agent sends you a check.

[Roger J]

I don't know this guy, or his materials, but if you're correct about his basic layout Red, then I see a HUGE legal problem with it.

That number 8 smiley face probably should be either   or  ??? because what that is doing is not only insuring that the investor gets paid, it's also a legal document which shows without a doubt that the investor was also acting as a RE agent without a license.  In most states, that would be some major $$$ and possible jail time.

As to assigning a contract, yes it's legal to do so (BUT, check your specific state laws, as they're always changing).  However, in a normal assignment deal, the end buyer pays the fee to the contract holder for the assignment, either upfront or at closing.  That's what an assignment fee is, the end buyer is paying for the right to take the place as buyer of the assignor in the existing contract.

Performed the way as laid out, what you are doing is determining the least amount that a seller will take and basically charging them anything over that amount as a commission for your services in helping them sale their property.  So, not only would you likely be charged as acting as an RE agent, you'd probably also be hit with making excessive profits (since you'd be acting as an RE agent, you can also get hit with this one because you'll fall under the RE Commission).

Not good at all.

Raj

[Redtigress]

The 8 wasn't intended to be a smiley at all... and I didn't see it :D
Anyway..
It is paid at closing.. and Raj I have sent you an email on the matter.

What I can tell you is that JA is an agent in good standing with Trec.  Beyond that /shrug.. I know that I gleaned some good information from his materials and it started some ideas brewing.  I also know that I have spoken to a couple mortgage brokers who have handled clients doing the JA system.  That is ALL I know.  My personal opinion is: it's 55 bucks for his basic books.  Buy them, read them, and if you're unsure about the materials show them to an attorney, or even your state's real estate commission if you feel the need.  In the scope of "educational materials" for real estate investing 55 is not that much.

[Trent]

Rebecca


I have taken all courses from this guy.

I believe that you are not suppose to talk about his methods and techniques, because of legal disclosures.

Anyways, why send people emails, why not explain everything right on here, on this board for everyone to see??

Also, WOW, i didnt even know that he was an agent!........That explains alot!

I was sued, I lost $36,540.00 to be exact.

The methods are not good. Follow them to the tee, and you too might encounter legal problems.

The plain simple fact is, and I have learned from my 2 encounters with the law, you are acting as an agent. You are not licensed, therefore violating the law.

Its plain and simple. Do business the way John teaches, and you will be subject to problems with the law. I don't care what anyone says, I got sued. The money I made did not even cover my court fees, judgements, and damages!

$55 is alot of money if the methods are not ethical. I spent upwards of $5,000 on this guy, followed his methods, and now won't even touch any of his ideas.

Rebecca, please post whatever you sent through email to the other members, I sure would like to see it............

I don't come on here often, I was notified, and asked to post about my experiences, and I will do that. John A will be receiving something from m attorney soon to see just what is going on!

[jsfletcher143]

Trent,

Thanx for sharing your experience. Did you by chance do his level 2 program that is supposed to give the "million dollar" classified ad to find buyers? i ask only because I have a lender friend that does bad credit mortgages, and if that ad is any good, it might prove useful to get my rehabs sold faster.

Thankx
John

[Roger J]

Rebeccah,

As you said, Mr. Alexander is a licensed RE Agent in Texas, so having the seller's pay his fees is standard.  It's in every REALTOR contract out there that there is a commission attached to the sell of the property.

However, if you're not licensed, then that's illegal to do, plain and simple.

It is, however, legal to assign your position as buyer to another for a fee.  That's a contract assignment.  How it is done will differ depending on the state and the terms of the contract, but I've yet to see any state laws making it illegal.

Wow, Trent.  This guy will let you spend mega bucks on his stuff but won't let you talk about it?  Does he make you sign a confidentiality agreement before he sends any of his materials to you?

If Rebeccah has laid out the basic outline of his teaching (and he doesn't inform readers that you must be a RE agent to do this), then I can understand why there would be legal disclosures.

As to having your attorney contact him, I'd have your attorney review all of your material from Mr. Alexander first, as I'm sure that all those legal disclosures somewhere there's one that says that they aren't liable for any damages incurred for following these "guidelines" or something similar.  I'm also pretty sure that he probably had a few lawyers contact him, too, so I doubt that it'll be scary to him.  It can't hurt of course.  Just don't want you to go throwing good money after the bad.

Raj

[Redtigress]

There's an NDA in the books AFTER you receive them, and he has been known to sue people for trying to auction the books after purchase on Ebay.  However, I didn't disclose any of the "proprietary" information.  Nor did I disclose or post any of the "patented" documents.  

Now, I'm going to ignore the fact that to try to hold someone to an NDA that was never signed, isn't possible.  I'm also going to ignore the fact that it's legally impossible to patent documents.  Copyright yes, but not patent.

First, I learned something from his books and in this business if you learn something usable then 55 isn't much.  I never claimed his methods were good.  Now, Trent, I have a question for you, do you have a problem with an investor assigning a contract?  Because that is perfectly legal, but yet you called inverse purchase, which is very closely related to assigning "unethical".

Second, why not post what I had to say here?  Because I do not feel that what I had to say, and what I needed to post was appropriate to be put up in a public, professional environment such as this.

Third: A real estate attorney looked at it and told me "If you are in an adversarial role to the other principle and you ACT as a principle, then you are not acting in agency".  However he did also remind me of a lawsuit in Texas where an RE agent was sued because he bought and flipped a multi-unit.  Other TX RE's will remember the case likely: The agent bought the property for 450k and he turned around right after close and sold the property for 700+.  Now the original seller found out and SUED the agent saying that the agent should have brought the end buyer to him directly. Sadly the judge agreed.  But there's nothing illegal about flipping.  There's even nothing illegal about an agent flipping.  But in all things consult your attorney and be completely above board.


Moral of this story for anyone thinking of buying anyone's real estate course:
Don't.  Or at least don't do it without consulting your attorney about everything that you read.  In all of 200 years there has never been a new method for doing what we do, for selling, for buying or for investing in real estate.  There may be shifts in paper work, and there may be a revision of methods, but it's been the same since the Middle Ages.


PS What I left out in the explanation is that the contract you sign with the seller is a purchase contract.  The contract signed with the buyer is a sales contract.  Up until the final couple pieces of paper work you're doing everything as if you're going to a double closing.

[Roger J]

As we've discussed before, Rebeccah, both on site and in private conversations, RE agents, and especially REALTORs, are held to a much higher standard when it comes to real estate and the law.

Every state's laws vary concerning RE agents, but I'd guess that the TX RE agent that lost the case lost because the judge felt that he did not represent the seller of the property properly and/or fully, according to the law.  If the property could be sold for $700K+ as opposed to $450K, then it was the agent's responsibility to at least inform the seller of the FMV of the property.  Now, I'm only guessing the why on the court decision, but it does go completely against what your attorney said, too.

As to John Alexander and his course.  I had never heard of the guy until this post.  I've never seen his materials, so I don't have a first hand knowledge of the guy or his stuff.  However, from what's been posted, it seems that he is trying to over-complicate a simple thing.

If you're going to assign a contract, then assign a contract.  There is no need to make a contract with the seller, another with a buyer, invoice the seller for the difference, likely have to redo a contract directly between seller and end-buyer, and probably end up ticking everybody off in the deal, including the closing agent and lender(s).

Simple:  Have an assignable purchase and sale agreement between you and the seller.  I'd personally inform them of your intent to assign, for a profit, the deal.  It's even a good thing to have it either written into the contract or separately, just somewhere in the seller's writing that they understand that you can and will assign the deal for more money than they are getting.  If you find an end buyer to assign, then you have them sign an assignment of contract form outlining the details of them taking the place as buyer.  You can either collect your fee upfront, or at closing.  The assignment contract IS your invoice.

Just my thoughts,

Raj