John T. Reed the Anti-Guru, Guru

John T. Reed has an interesting website and real estate investing career. Reed is the author of numerous books on real estate investing, all of which are available only by ordering from his website. One of the more interesting pages on his sprawling, mostly text website is his opinion page on real estate gurus in which he skewers the vast majority of them. He uses relentless logic and evidence gathering to produce sometimes banal, at other times surprising details on many real estate investing gurus. Whether you agree or disagree with him, think he is a crank, overly critical, obsessive, or has scrupulous integrity, his points are thought-provoking.

3 thoughts on “John T. Reed the Anti-Guru, Guru”

  1. I enjoyed your analysis of Mr.Abalos. Can you recommend other land books that you refer to in your article as being superior to Mr. Abalos’ land book?

  2. SPECIAL REPORT: John T. Reed Provides Weak and Waning Support of Fellow “Guru”, Robert Abalos From an online observer�s perspective, the relationship between Robert Abalos and John T. Reed is an odd one. Both view themselves as the brave rebel-with-a-cause of the real estate investment publishing industry, taking names, and almost single-handedly pointing out the good guys from the rogues� gallery of shysters they claim is systemic to the industry. Ironically, each one defends the other through their commentary on their websites, newsletters, and even in their private emails to interested third parties. One would think that they are a swashbuckling, saber-rattling duo coordinated in their efforts to rid the industry of evil guru vermin. However, what appears as smooth sailing on the surface belies the barnacled underbelly of a whale of a tale about how Mr. Reed really feels about Mr. Abalos. A recent, carefully executed analysis of John T. Reed�s public comments about Robert Abalos and his self-published, three-ring bound �home study course�, Investing in Land: How to Build Wealth Buying, Selling, Subdividing, and Developing Land reveals several chinks in the armor that binds Mr. Abalos to the comforting bosom of Mr. Reed. The analysis reveals that Mr. Reed�s support for Mr. Abalos and his �home study course� is not as strong as Mr. Reed�s green lit �Robert Abalos–I recommend� endorsement at http://www.johntreed.com/ would lead one to believe, and furthermore, appears to be weakening over time. Indeed, the analysis reveals some eyebrow-raising conclusions regarding Mr. Reed�s apparently real opinion of Mr. Abalos. For example: + What on Mr. Abalos� website at http://www.investinginland.com/ is marketed and merchandised as a �home study course� for the exorbitant price of $109.80 is positioned as a mere �book� on Amazon.com for the price of $62.97 (that�s 42.7% less than on Mr. Abalos� own website). On both Amazon.com and on Mr. Abalos� website, a public endorsement from Mr. Reed is stated as: �There are a great many interesting things in Abalos’ book.� Beyond the sub par grammar, Mr. Reed�s endorsement of Mr. Abalos� book/course could hardly be classified as a ringing one. Mr. Reed�s choice of words to describe his view of Mr. Abalos� book/course is telling. Note that he does not talk about the book itself, but only of the �things� in the book. Further note that his choice of adjective to describe these �things� can be read any way you want to read it: �interesting�. Given the opportunity to speak freely and provide a strong, positive endorsement of Mr. Abalos� book/course, Mr. Reed decides to play it safe in giving his opinion and simply says that the things in the book/course are �interesting.� Interesting, indeed. + On his website at http://www.johntreed.com/, Mr. Reed provides his followers a detailed explanation supporting his �I recommend� endorsement of Mr. Abalos and his book/course. The explanation can be found here: http://www.johntreed.com/Abalosreview.html. Again, a careful reading of Mr. Reed�s own words suggests that all is not well in the state of Denmark � that fantasyland in which both authors appear to do most of their real estate investing today: – Inside his book/course and on his website at http://www.investinginland.com/, Mr. Abalos supports the unorthodox notion that raw land is a great income-generating investment. Mr. Reed seems less than convinced: �He�s right, but much, maybe most, land, is not going to earn any income until someone puts buildings on it or sells it.� How are we to believe Mr. Abalos� notion about raw land�s great income-generating capability when Mr. Reed admits that most raw land investments are not going to earn any income until that land is no longer raw at all? Clearly, Mr. Reed does not support Mr. Abalos� advice that raw land should be thought of as an income-generating investment. – Mr. Abalos portrays in his book/course that raw land is an excellent investment because of its low carrying costs. Again, Mr. Reed calls foul on Mr. Abalos� expertise in this area of real estate investing: �Perhaps so, but land is still generally a negative-cash-flow business until you sell.� Like Mr. Reed, everyone knows that the only real reason real real estate investors invest in real estate in the first place is because they want positive cash flow from their real estate assets. Here, Mr. Reed admits that investing in raw land is a fairly unattractive business for the professional investor or the layman to engage. At the very least, Mr. Reed certainly intimates that Mr. Abalos� notion of raw land�s low carrying costs is a sophistic (and sophomoric) argument in support of investing in raw land. – Throughout his book/course, Mr. Abalos praises land investing and how wonderful raw land is as an investment. In contrast, Mr. Reed tells of a story whereby he met and talked with �one the major U.S. home builders [and] asked how they handled political risk regarding land they held to build homes on.� Apparently, Mr. Reed found the home builder�s response far more appealing than Mr. Abalos� entire book with all of its accolades for land investing: ��he surprised me by saying that they did not own any land� They only owned buildings�albeit partially completed ones; never unimproved land. Smart.� Note that such a conclusion of �smart� stands in stark contrast to Mr. Reed�s conclusion of �interesting� in regards to those things in Mr. Abalos� book/course that Mr. Reed said he found interesting. – Under the heading of �Strategy� in his explanation of his support for Mr. Abalos and his book/course, Mr. Reed point-blank disagrees with Mr. Abalos� entire strategy of investing in raw land: �I am a little fuzzy on his approach because he uses different terminology including some phrases I disagree with. For example, he says to �Buy great land at fair prices, not fair land at great prices.� That sounds like the opposite of what you should do to me.� Mr. Reed disagrees with � in fact contradicts — Mr. Abalos� entire strategy of raw land investing but continues to endorse Mr. Abalos and his book? �Interesting.� – Under the heading of �Checklist book�, Mr. Reed appears to value Mr. Abalos� entire book/course more as a mere checklist than as a great tomb of real estate investing knowledge: �To me, the great value of Abalos�s (sic) book is as a checklist. That�s not what he intended, but the checklist items are buried in the text.� Such a compliment � back-handed as it is � seems to suggest that Mr. Reed doesn�t view Mr. Abalos� written communication skills very highly given that the �great value� of the book is �buried in the text.� That too is �interesting� given that Mr. Abalos claims to be �a very famous attorney and investor with 25 years experience� as well as the author of the �most widely sold real estate investing book in the world�. Compared to the (evidently) lower sales of his own real estate investing books, who is Mr. Reed to judge Mr. Abalos� written communications prowess? – In his Investing in Land book/course, its related seminar outline, and in his $59.80 The Real Estate Cash Cow Program: How to Make Big Money Creating Mortgage Notes on Subdivided Land booklet, Mr. Abalos makes a strong argument for taking back notes (secured loans) on raw land as part of exiting a raw land investment. Somewhat surprisingly given his �I recommend� endorsement of Mr. Abalos, Mr. Reed strongly disagrees with Mr. Abalos: �Abalos, like perhaps a majority of real estate investment writers, recommends taking back a mortgage when you sell land. He says it increases the price you get. I oppose almost all seller financing if you are the seller.� Later, Mr. Reed goes on to indirectly condemn Mr. Abalos when he states emphatically: �Seller financing is an exercise in self-delusion.� Importantly, note that Mr. Reed refers to Mr. Abalos as a mere �writer� and not as an experienced investor with a respectable (if true) 25 years of experience. Furthermore, Mr. Reed likens Mr. Abalos to the �majority of real estate investment writers.� Really? A quick visual glance of Mr. Reed�s guru rating page at http://www.johntreed.com/Reedgururating.html and a back-of-the-napkin calculation reveals that Mr. Reed does not recommend well over 90% of the real estate investing gurus and writers he rates. Contrary to his �I recommend� comment on the same page, Mr. Reed seems to suggest here that Mr. Abalos falls well within that 90% majority of gurus he actually does not recommend. – Under the headings of �Financial basis� and �A dollar is a dollar�, Mr. Reed seems to question Mr. Abalos� mental acuity: �Abalos has an odd way of analyzing many deals. He seems to say that if you buy a parcel, then sell off enough of it to recoup all of your original purchase price, you have no money (�financial basis�) in the remaining parcels and therefor (sic) any sale of them is all gravy and you should treat them differently from properties where you still have part of your original purchase price in the property� putting money into various mental categories is a mistake [money experts Belsky and Gilovich] call �internal accounting.� Mr. Reed goes on to state that �Abalos also proves that some yields are far lower than investors think by deducting opportunity cost, inflation, and other things from the apparent yield. This is arguably double penalizing the yield. Plus, we are used to treating inflation and such as ambient. Therefore it is likely confusing to start adjusting for inflation.� It should be noted here that Mr. Abalos has claimed in the past to have worked for the investment banking firm Morgan Stanley as a financial analyst where he specialized in REITs and structured real estate securities. As was suggested above regarding Mr. Abalos� written communications prowess, if Mr. Abalos� claim of being a former financial analyst at Morgan Stanley is true, who is Mr. Reed to judge Mr. Abalos� financial analysis prowess in the area of real estate deals? – Mr. Reed�s questioning of Mr. Abalos� mental abilities does not stop there. Under the heading of �Intrinsic� value�, Mr. Reed again disagrees with Mr. Abalos� general skills at financial analysis and real estate investing: �Abalos advocates bargain purchases which he describes as buying for less than �intrinsic value.� His definition of �intrinsic value� is a bit fuzzy. I think it�s simple�[but] �intrinsic value� has a different and in my opinion, dangerous, meaning��Intrinsic� value, which Abalos says is definitely not market, is too vague for me.� So, to the same Robert Abalos which Mr. Reed says �I recommend�, Mr. Reed also says Mr. Abalos takes a general approach to real estate investing that is �a bit fuzzy�, �dangerous�, and �too vague for me.� Hmmm. – In addition to writing about real estate investing, John T. Reed also writes about coaching youth football and baseball and is well-regarded as an expert in that niche field by reviewers on Amazon.com. So, Mr. Reed knows a thing or two about baseball — and related baseball analogies — when he states under the heading �Singles, not homeruns�, �In a baseball analogy, Abalos recommends that you try to �hit singles not home runs� in land investing� Abalos is adamantly opposed to your doing that [trying for home runs]. I agree, although I have know (sic) a number of very successful developers, including Landlording author Leigh Robinson who has developed several motels in recent years�also, the developer who built my home. He may overstate it a bit.� Here, we find Mr. Reed agreeing with Mr. Abalos in general, but counters that he personally knows �very successful� investors who try to hit home runs and who apparently do quite well for themselves � in direct contradiction with Abalos� adamant opposition to the practice. It sounds like Mr. Reed and Mr. Abalos disagree on this practice more than just �a bit.� – Mr. Reed and Mr. Abalos also appear to disagree about corruption in land investing. According to Mr. Reed, �I have long believed that land was significantly more corrupt than investing in buildings because of the government/political permit processes. Abalos says that is a myth in his 18 years of experience as a land investor and land lawyer. I am glad to hear it. But I must note that I have seen more than a few news stories that seem to suggest otherwise. Abalos says those are the exception.� So, Mr. Reed � an experienced real estate investor and writer himself � claims to have seen enough corruption in land investing to maintain it as long-held belief. In contrast, Mr. Abalos views corruption in land investing as �a myth� — or at least he doesn�t notice it as separate and distinct from how he himself practices land investing. Here, Mr. Reed appears to �overtrust� Mr. Abalos �a bit.� – Mr. Reed even questions Mr. Abalos� assertion that proper investment land must have �geologic quality�. Who is the expert with land investing prowess here, Mr. Reed or Mr. Abalos? Mr. Reed says �I recommend� Mr. Abalos, but he disagrees with Mr. Abalos on the subject of �geologic quality� � ostensibly well within Mr. Abalos� field of real estate expertise: �Abalos says�not to buy land that is under water at high tide, earthquake faults, or steep cliff faces. I would say that you should think twice about buying such land, but I have lived too long in California and on the Jersey Shore to agree 100%. Some of the most valuable real estate in Wildwood, NJ is under water at high tide�The land on earthquake faults in California is probably worth quadrillions of dollars�knowledgeable California real estate people would never agree that you should reject it out of hand�In California or any other place where land has very high value, it is worthwhile to build on steep slopes. As with building over water, the costs are higher, but when the location has very high value, you can economically build there.� So, despite recommending Mr. Abalos for his land investing expertise, Mr. Reed comes off appearing to know far more than Mr. Abalos about the unique opportunities to profit from investing in land with little to no �geologic quality�. A bit cheeky of Mr. Reed, no? Or, does Mr. Reed really know more about investing in land than Mr. Abalos does? If that�s true, why would Mr. Reed say �I recommend� Mr. Abalos and his book/course Investing in Land? – Curiously, under the heading of �Botany�, Mr. Reed states, �There are a great many very interesting things in Abalos� book.� It should be noted here that Mr. Reed apparently even removed the positive-sounding term �very� when he submitted his �interesting� endorsement quote to Mr. Abalos for use in promoting his Investing in Land book/course on Amazon.com and on Mr. Abalos� website. Another one of Mr. Reed�s small apparent slights toward Mr. Abalos, perhaps? – Like many of Mr. Abalos� angry customers who sent Mr. Abalos money for his products but did not receive them and Mr. Abalos simply kept the money, Mr. Reed noted an ethical lapse in Mr. Abalos� past: �In one of his first deals, Abalos was shown a home that had a large field next to it�but when Abalos checked the property description, it was part of the property. A misleading picket fence separated the two parts of the lot. Abalos had just graduated from law school and consulted with his ethics professor about whether he had a duty to tell the seller. Abalos went ahead and did the deal, but says he has regretted it ever since.� It is very interesting that Mr. Reed remains silent on the obvious here: regretting an ethical lapse does not make it right to have committed the ethical lapse in the first place. Mr. Reed fails to chastise Mr. Abalos for the ethical lapse and for surely going against the recommendation of his ethics professor. Furthermore, Mr. Reed does not call for Mr. Abalos to locate the seller immediately today and make financial amends of some sort to the long-ago aggrieved seller � after all, did not Mr. Abalos knowingly steal that large field out from under the seller�s nose? If Mr. Abalos has truly sold over 50,000 copies of Investing in Land at around $100 a pop as he claims, he surely has some of that $5 million left to do the right thing and make financial amends to the seller today. If Mr. Abalos truly regretted his ethical lapse, would not he truly desire to make right his wrong? Simply saying that he regrets his actions is not sufficient justice for the poor victim of Mr. Abalos� unconscionable actions. But, somewhat out of character, Mr. Reed appears to not disagree with Mr. Abalos on this point. Instead, Mr. Reed supports Mr. Abalos and lays the blame on other people: �I think the seller had a right to recover her lost property value from the agent and any other so-called professionals who advised her in the deal, but not from Abalos. He was an arms-length buyer. He made a cash offer and she accepted. End of story.� Try telling such a cold-hearted statement to an apparently reformed Mr. Abalos today � in his $99-per-year online forum, The Robert Abalos Real Estate Watch, Mr. Abalos claims to abhor hearing about other real estate investors taking advantage of poor innocent sellers, and brazenly questions the moral turpitude of those buyers who callously say �tough — a deal�s a deal�. The circular irony here makes one�s head spin. – Mr. Reed concludes his explanation of his support for Mr. Abalos and his book/course by stating, �I recommend Abalos� book although I disagree with some of its big-picture investment analysis.� What? Throughout his explanation, Mr. Reed disagreed with almost every critical point Mr. Abalos had to say in his book/course! The few points on which Mr. Reed does agree with Mr. Abalos are relatively minor, like the importance of paying off credit card debt and other vague and completely obvious points Mr. Abalos makes in his book/course. Finally, Mr. Reed makes an excuse for rating Mr. Abalos� book so highly because, �the only previous good land books I knew of were Finding and Buying your Place in the Country by Les Scher and How to Make a Fortune Investing in Real Estate: The Land Game by Albert Winnikoff.� Clearly, Mr. Reed must not read about land very much � there are many excellent land investing books on Amazon.com, Borders.com, and Barnesandnoble.com that are far superior to Mr. Abalos� land investing book/course. These other books may be older and harder to find than Mr. Abalos� but even if their authors are now deceased, they�ll probably actually ship their book to you when you order it and/or send you a refund when you ask for one. Not as much can be said for Mr. Abalos. In summary, the analysis outlined above is fairly straightforward. Any reasonable person having read Mr. Reed�s highly critical explanation for his implausible support of Mr. Abalos and his book/course Investing in Land has to wonder aloud: Why? Why does Mr. Reed find it necessary to add Robert Abalos to his elite, Top 10% pantheon of recommended real estate gurus? His explanation seems to suggest � nay, outright states � that Mr. Reed does not agree with Mr. Abalos on much at all and, moreover, finds serious faults with Mr. Abalos� strategy, approach, analyses, and general mental capabilities. If Mr. Abalos is so flawed � a fact unhappily discovered and accepted by many of Mr. Abalos� unfortunate customers � why does Mr. Reed feel compelled to state in bold, green letters on his real estate guru ratings page �Robert Abalos�I recommend� for all �newbies� to see and take at face value? How many innocent, prospective Abalos customers has Mr. Reed�s implausible endorsement turned into angry, ripped off Abalos’ customers after Abalos takes their orders and their money, but ships out nothing in return? Mr. Reed is well aware of Mr. Abalos� unsatisfied customers. He has been informed multiple times about Mr. Abalos� thefts; yet, Mr. Reed says nothing on his website that condemns Mr. Abalos for these serious transgressions or even acknowledges their existence. Other real estate gurus subject to Mr. Reed�s proprietary rating scheme have not been as lucky as Mr. Abalos when it comes to Mr. Reed�s undying support. Mr. Reed has even posted on his own website about the seeming improbability of so many Abalos customers claiming that Mr. Abalos stole from them by not shipping products or putting on seminars. Yet, when presented with this blog and all of its documented evidence of Mr. Abalos� lies and chicanery, Mr. Reed felt compelled to remove his own posts about the ongoing dispute. For most of the other gurus he rates, Mr. Reed only updates his posts � he doesn�t outright remove them. Apparently, Mr. Abalos is truly special and unique to Mr. Reed. Meanwhile, the �I recommend� endorsement remains because like the paranoid Mr. Abalos, Mr. Reed chalks the entire hubbub up to those evil, conspiring �creative real estate� gurus trying to take down Good Samaritan gurus like Mr. Abalos and Mr. Reed. Me thinks Mr. Reed and Mr. Abalos protest too much. They also appear to think too little about the mysterious relationship that ties them together despite Mr. Reed�s seeming lack of respect for Mr. Abalos and his pricey book/course. Perhaps, some day, Mr. Reed will humbly take the time to explain himself and his uneven support of his good friend, Robert Abalos. Inquiring minds want to know. +++ For more information, please see http://robertabalosrevealed.blogspot.com/

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