This was pitch night for the Rich Dad Poor Dad three day seminar, and I decided to take my 17 year old daughter to the free “basic training class.”

Of all the wealth building schemes, I think Robert Kiyosaki’s Rich Dad Poor Dad makes the most sense. Speaking as one who has done several “no money down” deals, one of which has yielded me value of over $20,000,000 in less than 10 years, I believe his simple principles are generally valid.

I counted 100 attendees. The pitchman was friendly, and the presentation was relatively low key. I believe he had at least two shills that I could identify but that’s expected for the Get Rich Quick business. The overriding principles of achieving cash flow in Kiyosaki’s world are:

  • Opportunity
  • Knowledge
  • Action

The seminar, known as the “Rich Dad Poor Dad Academy” is a 3-day affair, and the price (discounted 50% of course for tonight) was $495. He compared it to Robert Allen’s $1,500 and Trump’s $3000. The Academy is purported to 1) present methods of discovering opportunity with reference books and guides, and 2) teach some procedures for buying properties for no money down. Nothing unique here. Carleton Sheets is yawning.

He showed a video example of a young couple who bought a house for no money down, and re-sold it 6 weeks later for a gross profit of about $26,800. Here are the numbers, by memory:

  • Asking Price $240,000
  • Purchase Price $210,00
  • Flip Sales Price $258,000
  • Gross Profit $48,000

The couple reportedly obtained a hard money loan (individual investor loan) for $210,000. Now, let’s look at the cost of goods sold beyond the purchase price:

-$ 4,200 loan fees (2 pts)


-$1,200 closing costs

Reported net profit $26,800

So, this previously pennyless, young couple living off the husband’s pizza delivery income put $26,800 in their pocket in 6 weeks?

I don’t think so

The fallacy is the hard money loan. NO ONE is going to loan her essentially 95%-100% market value for 2 pts, and I guess that was an interest free loan for 6 weeks? I am always in the private loan business for good circumstances, and for that deal I probably would have nailed her for 5-10 pts. and half the deal. She had to have a partner, being inexperienced and with no cash or collateral. My guess is they got thrown $5,000, maybe even $10,000, which is fine for them, but not $26,000 to them.

I had a little problem with the Rich Dad pitchman’s next topic, himself. Probably LDS like so many of the no money down guru crowd, he said he worked for Robert G. Allen in college, then started flipping houses. That makes sense. But then, he told of us his latest “coup,” an area development agreement for “the ENTIRE states of Maine, New Hampshire, and Vermont” for a Mexican QSR franchise! His reasoning was that the cost was $450,000 per store, and that Qboda and Chipotle both do about $1,450,000 in volume, and that at 1xgross he would be making$1,000,000 per store and that was a “no brainer.”

My ass it’s a no-brainer! I have been a strip mall developer for 30 years and trust me, NO restaurant is a NO BRAINER! 1x gross valuation is accurate, but only on stabilized volumes and it’s highly unlikely that those stores will do those volumes in those areas, even if they are run perfectly. So, the limited credibility he had went out the casa with that one!

Finally, I was watching for conversions. I would guess it was pretty strong, possibly 25%. Do the math. 25 x $500 = $12,500 x 4 seminars = $50,000 gross for our area and that’s a very generous estimate.

For the past three days, you could not turn on the radio or TV without hearing a spot for these seminars, nor could you find a local website without RICH DAD plastered all over it. They used affiliate marketing on the net, and I’m speculating that the deal with Kiyosaki was licensing, not a vertically owned enterprise. It looks like Russ Whitney is involved as well, and he’s got quite a history. If interested in this no money down, get rich quick real estate seminar topic, here’s some recommended reading. I’m guessing there was an easy $25,000 in promotion. That leaves $25,000 left to pay the bills.

$25,000 less

  • License fees
  • Pitchman’s cut
  • Support staff
  • Hotel meeting room; 4 seminars, 2 hours each, plus a 3 day meeting (includes a lunch)
  • Materials

My guess is that if the promoters netted $10,000 from this deal they’d be lucky. As repetition is the engine of creating an annuity, one could argue that repeated twenty times a year there’s $200,000 in profit, and that’s probably the case, BUT….wouldn’t it be less risky and much less work to flip eight or ten houses, at $25,000 profit each??

You make the call. Is the Rich Dad Poor Dad 3 day seminar worth $500? Maybe, for some, it could be. I’m a huge proponent of education and training, and have spent that sum and more many times for legitimate seminars and conferences and have never felt like I was ripped. As a frequent speaker at regional and national shopping center seminars and conventions, I want to offer supreme value for the attendees’ time and money and I think we do. If you have no background whatsoever in real estate dealings, it’s probably not a bad deal, and at least Kiyosaki hasn’t gone bankrupt (to my knowledge) like so many of the “mega successful” gurus.

In reality, the “secret” to making money in real estate is no secret at all.

It’s exactly what Kiyosaki says in his original book, Rich Dad, Poor Dad: Opportunity, Knowledge, and Action. Where most people fail is not implementing the 3rd step–not taking action.

Subscribe to ,consider attending quality real estate seminars and conferences, and you’ll learn everything you need to know, and then some. Read the articles, ask your questions, even request articles on specific topics, and soon your ability to move forward with your retail or development goals will become greater than 95% of those who don’t invest their time as you are. While we don’t address residential properties to a great degree, the principles are the same as in commercial real estate.


HVACpicHVAC maintenance is nearly always addressed in strip mall leases, and in most cases it is the tenant’s responsibility. Over the years we’ve discovered that the great majority of tenants do not properly maintain their HVAC units. Following are some major changes we have recently made.


Globally, we have offered to take on the maintenance and charge back the costs as a CAM (Common Area Maintenance) item. In most cases we can do it for less than the tenant.

To start, we sent letters to all tenants, advising them of this change. We told them that we would be starting within 60 days, however if they could provide invoices of quarterly maintenance (our stipulated maintenance period in the lease) we would delete them from the service. We had exactly 7% of the tenants submit these invoices. As we suspected, they’re not maintaining their HVAC units.

We then bid the service scope to several HVAC contractors recommended by our  property management company. We specified quarterly filter changes and semi-annual inspections. Any repairs will be charged directly to the tenant.

There are two arguments to this policy. One, the obvious, is that if the HVAC unit needs repair or replacement then the tenant is obligated to do it. True. Now, get them to do it!  They are also obligated to pay contract rent, and like most strip mall owners we’ve had to reduce that since 2008 to keep them in place. With the strip mall owners taking on the maintenance and repair task, we will undoubtedly extend the life of the HVAC units and save money over time.

The second argument is that by taking on the maintenance we become responsible for repairs as it was our maintenance company servicing the units. That has been our concern for years, and why we have not opted in to this concept of owner directed maintenance. To ensure the survival of the maintenance responsibility of the tenant in the lease, we were very clear in our letter than their obligations or responsibilities would not change, only the maintenance company unless they could prove that they had been maintaining the HVAC units.

We are too early in the process to evaluate the results, however it’s difficult to argue that we as owners controlling the maintenance of a very expensive item is an improvement. How about you? What do you do for HVAC maintenance?


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California created less than 1% of the new jobs created in Texas,  over the past two years. An unresponsive and punitive bureaucracy at both state and local levels in California, along with disturbing demographic and social trends, contribute to the growing exodus of businesses leaving California and the dwindling numbers of new start ups and […]

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Starbucks New Logo

Starbucks CEO and Founder Howard Schultz has announced a new logo for Starbucks. In this video, he explains the evolution of the siren, and how it was time to “take her out of the circle.” So far, the comments have been reported to be overall negative. Do you find it interesting that the company name […]

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The New AIDA Part I: Transformative Value

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LocalCenters Elk Grove Disney Giveaway 2010

THIS CONTEST IS CLOSED. CONGRATUATIONS TO MARK DRIVER WHO WILL  BE TAKING HIS FAMILY ON A CRUISE SOON! Win two 365 day, unrestricted annual passes to Disneyland, or a $900 cruise voucher! All you need to do is visit any of our participating stores in our shopping centers below, fill out a simple entry form […]

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