Real estate writers sharpen their pens

By ANNE GIBSON

Some American property folk are surprised by the preachings of a 44-year-old New Zealander who is promoting his theories there, and it is not just his "New Zealandese" writing that is causing them to question his theories.

Dolf de Roos has raised the ire of John T. Reed, a former real estate agent and now an author specialising in real estate and sports books in the United States.

But de Roos - in New Zealand this week to hold a property investors' school - has hit back hard at Reed, accusing him of wanting to promote his own books and of making money out of running down others.

De Roos' latest book Real Estate Riches - how to become rich using your banker's money (Addenda, $32.95), has been on United States bestseller lists.

But Reed thinks the theories are not just silly and inaccurate, but downright dangerous.

He has posted his 18-page analysis at www.johntreed.com/DeRoos.html.

"In this 161-page book," he writes, "de Roos has only enough good stuff for a brief article.

"The rest of the book is not harmless. It's dangerous because it misleads readers in an area involving serious amounts of money, debt and time.

"Many people say they are happy if a book just gives them one good idea. For God's sake, raise your standards. If an author only has one good idea, he should write a fortune cookie, not a book."

De Roos featured on this page last month. He is promoting his book and the series of seminars and workshops he is running.

He lives in Phoenix, Arizona, but is considering returning to either Christchurch or Queenstown, and regularly comes back to promote his books and theories.

De Roos says he owns a funeral parlour in Ashburton, a vineyard in the Gibbston Valley near Queenstown and a Christchurch apartment as part of his global real estate.

But some readers responding to the Weekend Herald article on May 25 said they had mixed feelings about de Roos - and the article - and questioned his background and theories.

"After the Maori television affair, people should be aware," said one reader, who noted that De Roos has a PhD from the University of Canterbury in electrical engineering but has turned to a career in real estate.

Reed, based in Alamo, California, shares the scepticism of some New Zealanders and says the only people who will get rich from de Roos' theories will be de Roos, through his book sales, seminars and workshops.

"If you bought de Roos' Real Estate Riches you got ripped off," writes Reed. "About the only way to make things worse would be to follow its advice. Instead, discard it and get sound advice on real estate investment and follow that."

Reed backs up his criticism of the book with a detailed analysis which he says points out many mistakes and sweeping generalisations.

Calling the book "really an advertising brochure", Reed is particularly critical of de Roos' links to Robert Kiyosaki, author of the Rich Dad series of books and another promoter of financial theories.

Kiyosaki wrote a foreword for Real Estate Riches - a link which also resulted in de Roos' book having similar design and colour on the front.

Reed calls Kiyosaki's Rich Dad series "misleading" and "a pack of lies".

The layout, design and colours in the de Roos book raise questions for Reed.

"Its first four pages and last eight pages are a catalogue of other Rich Dad books," he writes. "About 10 per cent of the pages in Real Estate Riches are blank. There is no index or bibliography of other authors' books on the subject, as you would see in legitimate, standalone, how-to books.

"The book primarily tries to sell you on the idea that it is easy to make a lot of money in real estate and that Kiyosaki and de Roos are the guys to tell you how."

But de Roos is proud of his association with bestselling author Kiyosaki, who is referred to in the book as his friend.

The blank pages are simply the ends of chapters, he says.

"The thing about people like the John Reeds of this world is that they win by default because now you are wondering if I'm right."

The main point Reed wants to get across is that he thinks de Roos "misleads mainly by omission and implication - a layman reading the book would come away with the impression that real estate investment is far easier and less risky than it is".

But de Roos says real estate is "tens and hundreds of times better than other investments" and that Reed is not helping people by espousing his theories.

Reed criticised de Roos for using "New Zealandese - no one bothered to translate the book into American even though the US is by far its main market".

"De Roos uses the word property to mean real estate, gearing for leverage, requisition for eminent domain. The most egregious example, which is extremely misleading, is his use of the word rent when he means net operating income."



In response to this criticism, de Roos says the book does not need translating for its US audience.

"We speak a certain way and you can't please everyone. Some people say appraisal should be valuation, but it depends on where you have been brought up."

One of the statements which troubles Reed most is de Roos' assertion in the book that he spends only about three hours of his time a year on each property he owns.

"There is no free lunch," Reed says. "In addition to the fact that operating a rental business profitably is very hard, owning rental property is a large responsibility.

"You have tenants, employees, equipment and structures to take care of. Landlords get sued.

"I shudder at the thought of an attorney representing one of de Roos' injured tenants, visitors, or employees making him read this three-hours-a-year line and his bragging about how rich he is, from his book, to the jury at a negligence trial.

"If de Roos really owns properties on more than one continent and really only devotes three hours 'max' per year to each property, and he gets sued for negligence, he is toast."

But de Roos replies that commercial property should not take more than three days a year to look after as long as the owner has appointed a competent property manager.

Reed is also concerned about de Roos' statement that people investing in financial markets needed specialist knowledge but that only common sense and a few key words are needed to do well in real estate.

Reed says: "This is the opposite of the truth. Real estate investors need to know management, finance, income taxes, marketing, real estate law, asset protection, appraisal."

But de Roos says his theories are "not so radical" and his writing is so popular that his next book is being published by Time Warner.

De Roos is dismissive but annoyed about Reed, saying he prefers to help people rather than focus on critics.

"People tell me I've changed their lives for ever. It's not Dolf de Roos that makes people rich. It's buying real estate that makes people rich."

Asked why his book spells Equiticorp as Equitycorp and refers to the short-lived defunct company as having been "solid and respected", de Roos says at the time it was operating in the 1980s, some people thought of it as such.

As for the spelling, "how should it have been spelled?" de Roos asks, adding that American proof readers may have altered his text.

De Roos reckons the readers know best and points to the fact that the book has made bestseller lists like that of the New York-headquartered Business Week.

John T. Reed

Dolf De Roos

Rich Dad