From the eager anticipation and lively conversations emanating from the crowd in Anaheim's Marriott Hotel ballroom, it seemed like a rock star was en route. But when a side door opened, controversial TV real estate investment adviser Tom Vu bounded toward the podium.
"Hi! You ready to make big money?" Vu, 34, asked as the crowd of about 1,000 people leapt to their feet in applause. "Motivating folks is in my blood. You wanna be rich don't you? Well if you make no money with me, you a loser!"
The real estate slump and disgruntled former disciples have silenced most of the flashy promoters who went on cable and late night TV in the 1980s to tout their pricey real estate investment seminars, books and cassette tapes as a way to get rich quick. But Vu, who runs three Longwood, Fla.-based real estate seminar businesses, still draws crowds--as his recent Orange County appearance shows--when he proselytizes about "the big profits in real estate."
He arrived dirt-poor in the United States from Vietnam in 1975 and has gotten rich, he says, following advice he now gives to others. His campy hourlong television ads--which promote his seminars against a backdrop of bikini-clad women, fast cars, big yachts and huge mansions--are so infamous that they have been spoofed on both the Fox television network show "In Living Color" as well as on NBC's late night comedy show "Saturday Night Live."
But Vu's rags-to-riches odyssey is receiving some serious scrutiny these days. The Florida attorney general is investigating claims from 20 of Vu's students that he allegedly engaged in deceptive trade practices by reneging on promises to help students invest in real estate by becoming their "financial partner" in certain purchases. The attorney general is also examining whether Vu has violated Florida law by failing to register his businesses with the state.
"I've wanted to look into his operation for some time," said Mark Barnett, an assistant state attorney general in Hollywood, Fla. "I understand that his people have raised questions about the motives of the people who are complaining. Frankly . . . what matters to me is the underlying truth of what they are saying. We've got affidavits from 20 of his students. If this guy (Vu) is breaking the law, then he needs" to be prosecuted.
Vu's lawyer, Richard S. Wheeler, acknowledged that his client has some disgruntled students. But Wheeler said the Florida investigation is being "orchestrated" by competitors and others who want to give Vu a bad name.
"We categorically deny the charges that have been filed," Wheeler said. "This is having a chilling effect on our business."
Until the Florida probe, Vu had managed to avoid the financial and legal pitfalls that have derailed many of his competitors.
The best known of the 1980s real estate gurus, author Robert Allen, closed down Allen Group Inc. after the company that licensed rights to his real estate seminars filed for liquidation under Chapter 7 of the federal bankruptcy code in 1986. Similarly, former school teacher Ed Beckley, whose "Million Dollar Secrets" cable television program appeared in about 200 markets, in 1987 filed a Chapter 11 bankruptcy court petition seeking protection from thousands of former students who sought refunds. He listed $6 million in debts.
Although a few well-known TV real estate salesmen remain, such as Dave Del Dotto of Hawaii, Vu has become one of the most visible. He has done this, he says, by distilling his real estate advice into a simple formula: Locate the hopelessly indebted and persuade them to sell their homes--without a down payment--and for less than the property is worth.
"I always knew there was money to be made in real estate," said Vu, whose easy manner and ready smile contrast with his aggressive salesmanship. "At first, I started out doing what everyone else was taught to do. Then I found a better way. My way."
But, countered John T. Reed, a Danville, Calif., real estate investment adviser and book author: "The main problem with the nothing-down gurus like Vu is that when you buy property with nothing down, the existing debt on the property is a tremendous burden. The other problem is that it is very hard to do a legitimate 'nothing down' deal in a legal and ethical way. You either end up taking advantage of an unsophisticated seller or misleading an institutional lender" by not disclosing that you have no equity in the property.
"You can get a motivational kick from him, sure," added Jane Garvey, editor of the Creative Investment Advisor newsletter in Glen Ellyn, Ill. "But I think you can get all of this sort of information from your library, for free."
Still, Vu, who fills ballrooms from Orlando, Fla., to Montreal, finds people willing to pay as much as $15,000 for his advice. He seemed to receive an especially eager reception during a recent five-city tour of California. Many in Vu's racially and ethnically mixed audiences imagine his Horatio Alger story could be their own.