Mar
26
Carleton Sheets and the No Money Down Crowd
March 26, 2007 |
I have to admit that the whole Carleton Sheets phenomenon baffles me, despite the fact that I “get it”, from both sides of the equation. If you don’t have much in the way of savings and would prefer to be rich, then the lure of a message such as “Make $182,102,182 a month with no money down!” is pretty attractive, especially when everyone knows someone’s second cousin’s uncle who get filthy rich form real estate. On the snake oil salesman side of things, there’s apparently a vast pool of people who want to be rich and who respond to the above lure, swallowing the line and sinker as well.
I just wouldn’t have guessed there was that much money to be made, for the Carleton Sheets of the world, especially at the price many of his products sell for. I was running affiliate ads here for a brief time, until I felt too slimy and sleazy for doing so, solely because the program paid out $100 for every customer you referred that purchased something. So obviously there’s lots of money to be made pitching such products, despite the fact that many of his offerings top out at well over $500, which seems a pretty hefty price point for people short on savings and long on greed.
But I guess there are more than a few examples of that phenomenon out in the world, as far as people willing to spend lots of money (even if it means racking up credit card debt) if you promise them sweetly enough that the final result will be that they’re wealthy. Even if it makes no logical sense, in any fashion. Why in the world would any successful guru (oxymoronic, I know) waste time hawking such products and services, if they truly have unlocked the secrets of making vast piles of money with no money down? If it truly worked and was as easy as claimed, they’d simply use their own techniques to make vast piles of money and never once have to wrestle with the headache of stocking snake oil, marketing snake oil, dealing with unsatisified customers of their snake oil, etc.
The world is a very strange place sometimes.
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I must say that I had watched those crazy infomercials for years, never much interested in real estate (as I was in high school at the time). Fast-forward to 2005, when my fiancee and I purchased our first house (for about $150k in Phoenix). The man we purchased it from, a contractor, was moving into a $1.2 million property. This seemed like a pretty big leap to us, so we asked him how he did it. He said he had used “Carlton Sheets.” Of course, I was shocked. I asked him how the program worked, and it sounded legit - not easy, not fast - but legit. Essentially he took the balance of his savings (about $8k) and opened accounts at 5 or 6 banks, each time removing the bulk of the money from the bank before. Two years later (about 2 months before we met him), he went to each bank, deposited the money ($8k + interest), asked for a letter from the bank documenting the date that he had opened the account, the amount of his initial deposit, and the balance of the account as of that date. He used this “paper collateral” to secure a loan for $270k. With the $270k, he purchased 40 acres outside of Phoenix. Less than a month later, the parcel next to him was purchased by a prominent residential developer, and his property value tripled overnight. Enough details, but the basics of the program (as far as he relayed them) are legit - one is simply taking advantage of the fact that lenders accept paper representations of wealth. And don’t worry…I’m just a procrastinating law student, not a Carlton Sheets rep…although I do plan on beginning to flip next year. I hope your blog helps. Thanks.