Some of Us Still Think They Can Get Rich Quick from the Real Estate Bubble

By Joseph Huff-Hannon, New York Press. Posted May 2, 2009.

When James Gripshover strides in to the room, it's clear who's in charge. While the mug of "best-selling author" Robert Allen may have graced the full-page ads and the promotional video, Gripshover is clearly the Closer. He's an easygoing guy with an intense gaze who paces up and down the aisle and uses his hands expressively to drive a point home, wears the same blue polo shirt as Terry and sports a clean-cut blond head of hair. "I need your help," Gripshover tells us.

"I need you to nod your head and say yes when you agree with something I say. Can everybody do that?"

"Yes!" the audience responds with gusto, gripping their pens and sitting up straight.

Over the next two hours Gripshover employs many of the tried-and-true methods of emotional and persuasive group marketing. He addresses people by their first name (thanks to the name tags), talks about his own remarkable success flipping properties in pre-foreclosure and short sales for the last 12-plus yearswhich helped him buy a beach house near San Diego and a condo in Tahoe. Gripshover is living the good life now, so he has all the time in the world to coach his daughter's softball team. He shows us a few cheerful slides of his daughter at the batting cage for effect.

As a cautionary tale, though, he also chronicles the sad tale of his brotherin-law. "Chuck" is a chronic procrastinator and never could quite get with the houseflipping program. When he finally did get in the game in 2006, he bought late and he bought high. So, he sadly remains a nonmillionaire to this day.

In contrast, we are shown a photo of "JJ Bright," a precocious scamp with bushy, brown hair and braces who just graduated from the eighth grade. After enrolling in the program, JJ found a home in preforeclosure "in his own neighborhood" and made a cool $23,000 on his first dealif Gripshover is to be believed. The message is clear, but just in case we missed it, we are told, "If JJ can do it, anyone can!"

I glance over at a mother and her young son sitting on the other side of the room and wonder if I may be looking at the next JJ Bright.

Gripshover also takes us through a sort of Subprime Real Estate Implosion 101, and cites data from the New York Times and the Center for Responsible Lending to the effect that, ladies and gentleman, we here in this room are all sitting on top of a 30-year record amount of undervalued properties. Although Gripshover does express some misgivings about the unfortunate circumstances in which many of those homeowners now find themselves, he's also an optimist. "It's a goldmine!" he tells us. "Don't let yourself do what my brother did!"

Indeed, nobody wants to be Chuck, and we are all asked to repeat out loud a sentence that flashes up on the screen: "Procrastination is the killer of our goals and dreams."

So how does it work? Basically, this free session is a set up to convince us to pay $2,995 for an upcoming three-day seminar where they will really spill the beans

about how to find undervalued properties in pre-foreclosure, how to package the perfect short sale proposal for the bank that holds the mortgage and how to flip the property for a quick profit after we've bought it from the bank for a song.

Bad credit, no credit or no money down? Not a problem, the Institute has an "exclusive" list of "private lenders" who will lend you the dough at "elevated" interest rates (even James admits the rates can be as high as 13 percent). Don't sweat the details though, because you're going to make a huge profit off the transaction. No money to pay for the three-day seminar to get you going on your new career? No biggie, put it on your MasterCard. By the time you cut your first deal and get that $20,000 profit check, you'll be able to pay it off in whole. Additional books, DVDs and subscriptions to a database of foreclosed and about-to-beforeclosed properties can also be had, for an additional charge to your credit card.

Sound familiar? I too seem to remember that the subprime meltdownwhich has by now brought the global economy to its knees was built on a similar ideological foundation of fake money, hidden and usurious interest rates, "no money down," "no risk" and "buy now, pay later." And I don't think I need to remind you how that one ended.

At times the workshop takes on the feel of a Marxist cadre meeting, or a study group convened to discuss the work of influential political thinker David Harvey and his theory of "accumulation by dispossession." The phrase describes a form of capitalism built on dispossessing others of all forms of wealthland, resources, labor powerby targeting those already most vulnerable to the market's depredations. In the banquet hall of the Roosevelt Hotel though, the proles in the room don't appear to feel much solidarity with the lumpen whose homes are being dispossessed en masse. When Gripshover tells the crowd that, over the next 18 months, "we will witness the largest shift of wealth in U.S. history," an excited murmur rises from the crowd. And when he shows a slide from the "proprietary database," which highlights the 3,000-plus properties heading in to foreclosure in Brooklyn, somebody in the back of the room yells out, "Woo Hoo!"

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