Lease Option Email - Appalling

[rueben]

I believe very strongly that this email received from Roger Gourley re Lease Options is the very worst I have ever received.

Those doing Lease Option taught by GBI and Dean Letfus are told it should be win/win.

We could discuss whether this is the case until the cows come home because I know others on this forum see differently. But this email reeks of ripping the tenant buyer off and HE's PROUD OF IT!!

Gorley is obviously linked to Richmastery in some way, but I think he mostly works on his own. I have not put this in the Richmastery thread as I believe it would get lost in there and this is more about Gourley's ethics, rather than Richmastery.

"
Since I wrote to you last, I’ve received quite a few emails challenging my claim that investors can enjoy great positive cashflow in today’s market using a lease options strategy.
I’m a firm believer that the proof is in the pudding – so here’s the pudding!
If you’ve got five minutes right now keep reading and I’ll share with you one of the many cashflow positive deals I’ve put together…

Here’s the house in Papamoa - I might have taken the picture on a miserable day, but you can see it’s quite a nice, average, low maintenance sort of house right?
But that’s not what’s exciting – what’s exciting are the numbers – keep reading:
The market value of the property was $320K, I purchased it for my lease option tenant to live in at $319K.
I then agreed with my tenant that he would have the option to buy the property for $385K (hey if the market value goes up and the house becomes worth more than $385K my tenant might profit as well!)
From my point of view, if we settle I will make $65K – not a bad profit by anyone’s standards!
But in the meantime, here’s what’s happening – and this is why I’m still enjoying great positive cashflow today!
You see the market rent for the property is $365 per week but my tenant, who has the option to buy, is paying me $650 per week!
My holding costs on the property are $475 – so you can see that if I was just collecting market rent I would have the same cashflow problem facing every other investor at the moment!
But, because I’m collecting a premium lease option rent I actually bank $175 in passive income every week!
Do you see how if you did 10 of these you would be earning $1,750 per week and could easily retire from your day job – yes, even in this market with interest rates as high as they are!
Are you interested in finding out how you too could benefit from a lease options strategy?
Good! I’ve put together a weekend course where I’m going to take you through how to put together a deal just like the one above.
I’ll personally take you through everything you need to know from sourcing great tenants to completing the necessary contracts so that you too can master this strategy and start reaping the rewards!



Hey I only started doing lease options two years ago – it’s not as complicated as it may seem, once you have the right education that is! If I can do it, so can you!
So come along and join other like-minded investors on my course and let’s prove all those negative media bods wrong – let’s be the ones to show them that investors can enjoy great positive cashflow in the current market!"




This man needs stopping - and stopping fast. What do the tenant buyers do if the house is only worth $350,000 at the end of the period. How are they going to get finance? The way lease options should work is that ideally they should have built in equity.

I'm disgusted.

I would encourage everyone to contact Richmastery and express concern.

[Jumpin]

I'm with you Rueben. Clearly this deal has no benefit whatsoever for the TB, and is doomed from the start. The TB will stop paying within 6 months. This will give the whole LO community a bad name.
My own Lease Options are somewhat less greedy.

[whitt]

Funny you should raise this. I actually was wondering the same myself when I saw the deal.

This is not really a win-win for the tenant buyer.

Person gets it on a Sandwhich lease paying owner market rent $365 or slightly lower. This plus there expenses means they are only paying $475PW with an option to buy at market rent $320K. This all seems fine.

The killer comes with the optioning to the tenant for an inflated price of $385K. The tenant is stuck and may not get finance easily down the track.

Lease options are good but this type of stuff is strange and not in the intent of a good win-win for both sides.
Reminds me of Henry Kaye and elevated prices.

[Dean@Massiveaction]

I commented on it in RM forum and had it removed.

"This referred to as hydrauliking and should never be a part of a Lease Option strategy. Great way to end up on Fair Go and get sued. You must buy 10 to 15% below RV and LO at RV.
I originally taught John and don't actually think he would do this. I suspect advert written by a third party."

I suspect a third party wrote the advert. I've emailed Phil to advise him as I suspect he doesn't know.

[whitt]

A tough place to be in.

The issue of using 3rd party copywriters was raised a while back in these forums. The advertiser still has a duty to confirm all the material is correct in the advertising.

Face the wrath of fair go/ courts or the Advertising standards authority.

[Heg]

I commented on it in RM forum and had it removed.
.

Really?? What a surprise

What is NOT a surprise is that this guy is linked to RM and is not acting ethically.

[xris]

I'm with Roger Gorley on this and I am not too amused at all this holier than though stuff coming through on this thread.

What is he doing wrong? He's just trying to make money like the rest of us so good luck to him I say. At least he is being honest about what he is doing unlike so many others on this site.

Now, do you all want another opinion? Well here it is.

If this is what LO LL's do, even if it is hidden by smooth talking niceties, then boy is this LO scam just a beauty!

The LL knows that market rent (here as an example) is $365 and he is openly receiving $680. He is therefore in breach of the RTA and this rent will undoubtedly be put back down to $365 if the tenant chose to apply to the TT. (Can someone find out where this place is and pay the tenant a helpful visit please?)

Here we see yet another example of how the whole LO scam is contrary to NZ law.

Go for it Roger and let's see how far you can get before you get pulled up.

xris

[rueben]

Lease Options differ on how they are structured. I don't believe all Lease Options are a scam - but this is definitely not right ethically or morally. I would be very concerned if there were a room full of people at his "seminar" being taught that this is the way to do business.

If this email was written by a third party, and it has somehow slipped through, then a clear, decisive retraction from Gourley, Phil Jones and the Richmastery site needs to be swift and unwavering and a full explanation given.

If I were Phil Jones I would be coming here and talking straight about it - not a post on the forum, or a blog - address the people here that are concerned.

[AndyB]

I have often seen things like lease options but do not know how they work. I'm a noob to real estate. Could someone explain in simple terms how this works? I mean, some have said that the tenant may decide to 'not pay.' What does that mean? Also, it's only a promise (an option) to buy the place at a later date? How do LO's work? Thnx.

[cantthinkofanickname]

I would expect with prices falling in many areas and no hope of archiving ownership the tenant buyer will be bailing soon leaving our leasor with no income. Also look at the purchase price 319k, 100% finance would mean a mortgage payment north of $600 per week Hardly the $475 per week as suggested in the advert

[Gatekeeper]

I hope someone can work out where these people who are being ripped off are and somehow let's them know. This is pretty disgraceful.

[Keys]

Now, do you all want another opinion? Well here it is.

If this is what LO LL's do, even if it is hidden by smooth talking niceties, then boy is this LO scam just a beauty!

The LL knows that market rent (here as an example) is $365 and he is openly receiving $680. He is therefore in breach of the RTA and this rent will undoubtedly be put back down to $365 if the tenant chose to apply to the TT. (Can someone find out where this place is and pay the tenant a helpful visit please?)

Here we see yet another example of how the whole LO scam is contrary to NZ law.

Suggest you read S 5(0)

The RTA does not apply.

[Glenis]

I think the email is garbage - merely a sales pitch to get you to pay for a seminar or consultation. A quick search of properties in Papamoa shows that a purchase price of $319k is unlikely as even average homes sell for much higher. The mortgage figure has has quote is at ~7.8%. The actual information ties in more closely if he purchased 2 years ago on a fixed rate.

[xris]

Suggest you read S 5(0)

The RTA does not apply.

Since when is an option to buy a Sale and Purchase agreement?

xris

[rueben]

I see Phil Jones has defended the strategy on his forum and just criticised those people who question it. Typical.

Perhaps this thread should go on the Richmastery thread. They obviously condone it.

For those that don't want to go to their forum Phil's answer is here:

"I have been shocked and surprised by the wild statements made about the email above by people who claim to be "Lease Options Experts" who appear to be very ignorant of a solid, legal, relevant investing strategy that John Gourley has mastered.

Just because an investor is making money in a way you don't understand, doesn't mean its dodgy, illegal or hydraulicked as some have claimed.

John (unlike many others) does not just teach Lease Options, he practises them himself regularly and has a unique powerful system which he will demonstrate to our customers with evidence in the next few weeks.

If you liked this email, which is a 10 Year Lease Option! You will love the next one which features a live interview with the tenant that did it and how they perceive the deal as very win/win.

Judgement on anything should be held until you know all the facts. Richmastery Lease Options are a powerful strategy and are PERECT money generators in the market RIGHT NOW. Click here for more info on Johns awesome 2 day course.
I have been shocked and surprised by the wild statements made about the email above by people who claim to be "Lease Options Experts" who appear to be very ignorant of a solid, legal, relevant investing strategy that John Gourley has mastered.

Just because an investor is making money in a way you don't understand, doesn't mean its dodgy, illegal or hydraulicked as some have claimed.

John (unlike many others) does not just teach Lease Options, he practises them himself regularly and has a unique powerful system which he will demonstrate to our customers with evidence in the next few weeks.

If you liked this email, which is a 10 Year Lease Option! You will love the next one which features a live interview with the tenant that did it and how they perceive the deal as very win/win.

Judgement on anything should be held until you know all the facts. Richmastery Lease Options are a powerful strategy and are PERECT money generators in the market RIGHT NOW. click here for more info on Johns awesome 2 day course.