Dean Graziosi: Complaints Mount for Real Estate's Infomercial Man

If you're a cable television viewer, you've likely seen the chirpy Dean Graziosi and his lengthy real estate infomercials on various cable television channels including CNBC. I've gotten a number of questions about Dean Graziosi and his claims that he can teach you to make great riches investing in real estate without putting up any of your own money.

Graziosi has been recently selling his book, "Profit From Real-Estate Right Now! The Proven No Money Down System For Today's Market!" This book, including shipping costs, sells for $29.90. Over the years, Graziosi has written and promoted other real estate books with similar content.

Background: What's Graziosi's Experience?

Graziosi has been selling advice since 1999. However, he started with advice about inspecting a car with his CarPro VHS tapes. Actually, Graziosi didn't have that expertise - he interviewed an experienced auto mechanic.

He then pitched a program he called "Motor Millions" for $59.95 plus shipping and handling on television which he claimed, "...has been designed with step-by-step information on how to tap into the billion dollar used car market. Learn how to purchase quality cars below retail and turn around for a tidy profit. Make spendable cash quickly and easily and move closer to making your dreams a reality (or just take that vacation you've always dreamed about)."

If this isn't already enough to make you run in the other direction, Graziosi appears to have no training or educational background to qualify him for his self-anointed real estate guru status. In his books and through interviews, Graziosi says that he "chose" not to go to college and got started in the working world by joining his father in his small car business. That business, according to Graziosi, subsequently failed.

In describing his next venture, which he labels being a "car broker," Graziosi says the following:

"I used to run inexpensive ads saying, "Looking to sell your car easy? Call me. Looking to find the perfect car? Call me. I match up buyers and sellers and I make a profit in the middle."

That sounds like a used car salesman without a lot or showroom!

Real Estate Expert?

In the mid-2000s, Graziosi began flogging various real estate programs to the public. The books, audio tapes and DVDs I've reviewed are mostly filled with excessive motivational nonsense wherein Graziosi preaches about the importance of having the right mindset and attitude to succeed as a real estate investor. He provides very little in the way of details and how to information.

It turns out that there is a good reason for this lack of information (besides his lack of training and experience). Once customers have bought a book or DVD set direct from his company, his salespeople then use high pressure tactics to sell personal real estate coaching services for thousands of dollars.

His Arizona-based company Dean Enterprises has the dubious distinction of having earned a grade of ‘F' from the Better Business Bureau (yes, that's the worst possible grade they award) thanks to the large number of complaints filed against the business, his firm's failure to respond to numerous complaints and the length of time taken to resolve other complaints.

Dangerous Strategies and Advice

Graziosi's lack of experience and lack of common sense are exposed many times in his publications. For example, in his recent book, he claims that when he saw a real estate agent putting up a for sale sign on a $525,000 house across the street from a home he already owns, he does a quick walk through of the property and immediately writes up a near full price purchase offer. In that offer, he claims to buy the home "as is," that is without having it professionally inspected. This is stupid and dangerous for anyone who is not themselves a contractor and an expert on all of the operating systems of a home. Graziosi clearly lacks this expertise and his not telling the reader the importance of doing such an inspection is a horrible oversight.

Besides his problematic business practices as exposed by the BBB report on his company and his generally shallow advice, recent years have clearly shown that Graziosi changes his stripes and story. In the mid-2000s, he encouraged taking out risky mortgages and layering on heavy debts. The real estate market slide in the late 2000s clearly exposed the dangers in that short-sighted approach.

Now that it's clear that real estate prices have corrected significantly in most parts of the country, Graziosi's claiming that his system enables novice investors to take advantage of low prices and depressed market conditions. Graziosi is telling people to buy foreclosures, for no-money-down of course, and rent out the property. He's also claiming that through getting such good deals when you buy foreclosed property, you'll be able to refinance and pull lots of cash out of your property and buy more.

If you believe this is simplistic and naïve, go to the head of the class! Most foreclosures happen in the highly depressed areas where decent renters are hard to come by. And, expecting that you're going to get such a steal on a property that you can turn around and find a lender willing to do a refinance that enables you to pull out cash is wishful thinking.

One final warning about Graziosi: his company owns more than 200 separate websites which are stuffed with propaganda for his products and services. Clearly, reputable companies don't need that many websites and this is being done to flood search engine results with his advertising to crowd out consumer complaints and negative feedback.