In July 2006 I was horrified when reading the "Investors Corner" in the Arizona Republic, written by self-proclaimed housing "guru" Mark Bosworth. I felt he promoted way too much leverage for small investors and posted on it at the time.
In September of 2006 I was appalled again by Bosworth’s "Investor’s Corner" article. Again he was promoting "leverage", and the importance of finding an "expert" to work with- like him. Here’s a sample of his advice:
Appreciation is the biggest return on my real estate investments. This is also the most speculative of the returns. However, what reasonable person do you know that thinks home values will be lower in ten years than they are today? Sure, they may slow down for a little bit, but the historical trend is upward growth. Even if all they do is keep up with inflation I’ll show you how to make massive returns investing in that growth.
It’s called leverage. And while it’s not a direct investment return, it is the principle that slingshots the actual returns into ridiculous numbers. Let’s say that your investment appreciates at 4% (very conservative historically) and you get at least 1% in tax benefits (depreciation). Doesn’t sound so appealing, does it? The key is that you probably didn’t pay cash for the house. Let’s say you bought the house for 10% down. That makes your actual return 50%! Safely and conservatively! I didn’t factor in debt reduction and cash flow because that introduces complexity to the equation because of the debt burden…but that’s part of what is so cool about real estate. Increase your debt, increase your leverage, increase your overall returns.
The target of an ABC15 Investigation has been issued a cease and desist order.
The cease and desist order says Mark Bosworth can no longer run his current rent to own business, Gorenter.com.
In fact, the order goes even further saying Bosworth can’t engage in any real estate activity in any capacity whatsoever.
His tenants complained to us when the company was called Home America.
Arizona Department of Real Estate Commissioner Sam Wercinski says the numbers of complaints they have received are significant.
The department has 22 open investigations involving Mark Bosworth’s real estate businesses and 18 of them are against Home America.
The cease and desist order states Bosworth collected rents and kept some of the money instead of handing it over to some owners.
It claims he failed to follow through on some sales agreements with one of his former companies, and states he violated real estate laws by conducting business without a license.
The "Cease and Desist" cost him big time. [Original is here.]
