He doesn't do what he proclaims - Comment on two Million Book

http://www.amazon.com/2-Years-Million-Real-Estate/dp/0071471871/ref=cm_cr-mr-title/105-4767327-5039665

Reviewer: Stan G.

The title, while geared to make sales, should have tipped me off as being preposterous. His premise, taken from his title and the cover caption ("Quit your day job and become a millionaire property owner!"), is that within two years you can make a million and have enough cash flow to replace your current income from your job. But it seems obvious that he didn't do this himself, for number of reasons.

First, I noticed that while he appears to give a track record and timeline for his own "success," his "disclosure" of deals consummated doesn't give: a) the purchase price; b) the cash flow generated by each property acquired; c) the terms of the deal (i.e., interest rate, amortization period, balloons, down payment); or d) his job income that he is supposedly "replacing." For a book with a title like this, what possible reason can there be for these glaring omissions other than that such disclosures would reveal that he didn't do it himself!

Second, there's not a shred of evidence, or even claim, that his net worth was or is a million dollars! In fact, the evidence suggests just the opposite. On page 32 he states that the "value" of his properties owned (unverifiable since he never gives purchase prices) is $1.8 million. Even if he had 35% equity in his properties, which is unlikely, his paper net worth would still only be $630,000.

Third, he conveniently begins his "two year" tracking after the refinancing of his first property. He bought his first property, a condo, in 1999 (he doesn't say what month) for $200,000. He refinances his condo and buys his first "investment" property (a triplex) in the summer of 2002. He notes on p. 21 that his condo had appreciated to a whopping $365,000 in 2002 (almost doubling in value in two years, thanks to a raging bull real estate market), which allowed him to purchase property #3 (which he calls his second "income producing property"). He follows that pattern with the next two purchases, and then states that "By April 2004, I was generating sufficient after tax cash flow from my rental properties to leave the 9-to-5 world. I accomplished this feat in less than two years..."

What should be obvious is that:

1. The clock starts in 1999, when he bought his first property. After all, it was that property that allowed him to access $165,000 in equity to buy the other properties. Had he not had that money, he wouldn't have bought anything. At best, it appears that it took him 5 years (1999-2004) to have sufficient cash flow to leave his job.

2. Since he doesn't say how much he was making from his job, or in cash flow from properties, we don't know whether that's bogus too. While job income is a bit personal, cash flow from properties is not, especially when the premise of your book is predicated on having sufficient cash flow to replace your income.

I'm sorry, but I just don't buy the story.