As many of you know, I am a big fan of Donald Trump and The Apprentice. I was very excited about a year ago when Trump started Trump University offering courses on entrepreneurship and real estate investing – two of my favorite subjects. I took a few of the free courses that were offered and was impressed so I ordered the Bubble Proof Investing course and received it a few weeks ago.
It’s a 3 CD set with a manual and some cool flash cards. I was very impressed with the packaging and the professional way the info was laid out. The problem occurred while I was listening to disc 2 which is the Gary Eldred CD. Gary is the “dean” of the real estate department of TrumpU. On the CD, Gary talked about a “turn key” real estate investment in duplexes that was offered by a company called Mile High Capital. He praised the company saying that their business model aligned perfectly with his and that is why he works with them in “promoting” their investment duplexes.
INVESTOR ALERT: Mile High Capital went out of business in 2005 after the owners were brought up on charges of securities fraud. They bilked 800 investors out of more than $22 million. It turns out that the founder was convicted twice prior on securities fraud charges. They were based right here in Englewood, Colorado.
Now, I guess I don’t have a problem with the fact that the TrumpU people allowed a blatant advertising plug to remain in the recording for the course. I don’t really even have a problem that TrumpU allows someone associated with a debacle like this to be a part of their faculty. What I do have a problem with is the fact that TrumpU did not do their homework and continues to SELL this information to unsuspecting real estate investors.
This really devalues the information that TrumpU puts out and makes me wonder what else I’m going to find if I ever decide to order additional courses. I was extremely disappointed. I decided to do something about it.
I called TrumpU and registered a complaint and a few weeks later the president of TrumpU called me to discuss the issue. No, it wasn’t the Donald himself, unfortunately! He said that in the next production run of the course they were going to edit out that reference AND he said that Professor Eldred was going to send an email to everyone who bought the course to explain the problem and apologize. Hmm. That would be nice but after a week or so when I hadn’t received anything I figured he was just blowing smoke.
Imagine my surprise when a few weeks later, I received the following email from Gary Eldred:
Dear Susan,
In some of my published works, including “Bubble-Proof Real Estate Investing” which you purchased, I have referred to a property development firm named Mile High Capital. As it now turns out, the actual operations of Mile High Capital differed materially from the way the company was represented to me. At that time, I thought MHC was following the ethical, locational, and product research principles that I advocate in all of my educational endeavors.
Unfortunately–and much to my regret and embarrassment–this was not the case. MHC failed to deliver on many of its contracts. The company has filed for bankruptcy and although no definitive court rulings (to my knowledge) have yet been rendered, the firm and several of its principals stand accused of various civil and criminal allegations.
However, I would like to set the record straight in one critical respect: I was never a principal in this firm nor was I involved in promoting sales for MHC. In my role, I wanted to educate my audience about the benefits of real estate investing. Instead, MHC educated its investors about risks. Unknown to me, MHC purchase agreements permitted MHC to use any and all buyer deposits in the operation of its business. No one should buy property on those terms.
Nevertheless, I realize that my presentations for MHC provided a patina of credibility for a firm that did not warrant investor trust. I now view this lack of inquiry on my part as an oversight that I will do my best to never repeat.
Sincerely,
Gary Eldred, Ph.D.
Faculty Member
Trump University
I am impressed. I’m not sure what a patina is but at least he acknowledged his mistake. The experience has gone from being a lousy one to a pretty good one. TrumpU listened and took action. In the end that’s really all you can hope for.
My lesson from all of this has to do with due diligence. Just because someone says they are an expert or because an expert is recommending an investment, the investor must always do his or her own due diligence. Taking someone else’s word for it is a recipe for disaster.
