The Times: Can Warren Borsje really make you a property millionaire?
Believe me, I can make you a millionaire: Warren Borsje promises to make you rich - if you pay him £2,500. It's worked for him, but will his disciples prosper? David Rowan reports
This is how to make £25,000 in two hours from a room of strangers people who, in many cases, have recently lost their jobs or savings and need a place to pin their hopes. People like Terry, a 48-year-old currently "between opportunities" who lost £15,000 in a rogue charity-collecting franchise; or Ted, just made redundant in his early fifties by an IT firm and now concerned about his diminishing pension.
They and around 200 other opportunity-seekers have been enticed to a London hotel suite by a newspaper advertisement headed "From nothing to millionaire in three years!" It promises to reveal for free the "simple formula" to wealth. Two hours later, many of them will have been queuing to hand cheques to the sharp-suited guru sprinting on to the stage.
"I've been looking for this all my life, and am very excited," Terry later exclaims, buttonholing fellow wealth-seekers to discuss whether this really is the answer. Ted goes a step further, giving thousands of £to the charismatic Australian at the podium who pledges the knowledge they will need to stop working forever.
The man responsible for this awakening is not a preacher, although he can move a crowd as skilfully as the sharpest televangelist. Warren Borsje's sermon, in fact, celebrates Mammon, and the magic formula that will bring his believers true financial freedom. Borsje starts by explaining that he will share with his flock the secret of becoming a millionaire within three years using other people's money. Today, however, the only clear winners are Borsje and his assistants preparing to swipe credit cards.
First, though, comes the patter. Borsje, well-built in a black suit and with gelled hair, says that he almost went bankrupt five years ago, but now has homes in Brighton, Melbourne and the French Riviera, 68 rental properties, three businesses and extensive stock investments. He retired last year at 27 but soon grew bored with endless golf and surfing, and now spends a week each month educating the rest of us.
Five thousand prospective millionaires have already attended his London workshops, in addition to 9,000 overseas, and now Borsje plans to expand across the UK.
The disproportionately black and Asian audience - comprising young women, retired couples, sharp-suited executives and labourers in overalls - listens intensely as Borsje explains that he will teach them a new way to think about money. He asks who among them are novice investors (almost all), and then makes them fold their arms counter-intuitively, just to show how hard it is to unlearn established patterns. They sit gripped as Borsje recounts how he left school almost illiterate at 13 and, after completing a carpentry apprenticeship, fell deeper into debt. Then came his own awakening, on New Year's Day 1997, when he had reached rock bottom emotionally, physically and financially. "I could either accept it or re-educate myself," he intones.
Naturally, he chose the latter path, studying the investment world and working for a property millionaire until he developed his "concept". The problem, as he explains it, is that the global money-control system inevitably rewards the rich, while the tax system squeezes those who work.
So why choose a job when by following his simple "Entrepreneurial Formula" we can all choose to be rich? "Absolutely anyone can do what I did if they are prepared to learn and act," he pledges. "But most of us simply don't find the time."
Scattered throughout Borsje's disquisition are references to "the course" -a valuable opportunity to study his ideas in more depth over a weekend. "You have to pay," he assures us in passing, "but there's no pressure."
At a mere £2,490 a person - a price disclosed only at the end - the course could certainly change the immediate circumstances of some of those showing interest. But by now, many in the audience are mesmerised by Borsje's charm. Some 17 of them pay right away, enticed by a discount for "investing" immediately. The sales pitch clearly works: according to his company, New World Education, around 500 have paid to attend the weekend courses since April.
And the secret formula? In a nutshell, borrowing money to buy rental properties. The buy-to-let market may be collapsing in much of Britain, but Borsje has no time for doubters: he promises that his followers can make millions. Borrow as much as you can to buy, he advises, and then further remortgage after carrying out basic cosmetic improvements. Then use the additional cash to buy other properties or simply as an income, as he has done with his vast portfolio. "Living on equity, my friends, is the only way to fly -it's tax free, and you just watch the rent money pop into your account every month."
With landlord's insurance there is no risk of tenant trouble, he insists, and a new breed of "mortgage packer" - less discerning than brokers - will arrange loans for course "graduates" with few questions asked. They will even lend to those with poor credit records, though Borsje cannot go into detail now. "We don't tell you today how to generate the capital," he says, "but on our course we go through the 14 ways."
Ted, the former IT worker, queues to sign up with his wife Lois. The couple, from West Sussex, are typical of the believers, many of whom have suffered financial setbacks. "I've just been made redundant, and pensions these days are worth toilet paper," he says. "We'd been thinking about investing in property with our own money, but Warren said not to. The question is finding a lender - presumably all that will be on the course."
Terry, a big man in a rather loud suit, is openly debating whether to sign up now. "It sounds fantastic for people who don't have the knowhow," he says. "But there are a lot of cowboys out there. I'm wondering, if everyone was going to make the sort of money they promise, why aren't there thousands of companies doing this?"
The answer, according to property experts, is because the market is far more troubled than Borsje's formula will admit. "This will work only if property prices continue to rise, and that's just not going to happen," says John Wriglesworth, housing economist with Hometrack. "It sounds like he's appealing to desperate people. There's no fast-track solution to wealth in the property market, and getting yourself into debt at this stage, when rental yields are falling and interest rates may rise, is very dangerous. I'd advise people to steer well clear."
At the Royal Institution of Chartered Surveyors, spokesman Ray Barrowdale is also suspicious. "It would be very dodgy now to invest in property for short-term gain -you could lose money, or at least not make as much as you expected. The buy-to-let market is saturated. Novices in the market could find they can't get tenants."
But Borsje, talking to The Times later, is undaunted. "I'd agree that there's definitely a risk in buy-to-let -but not for people who come on our course. We tell our graduates to build a cash buffer of 10 or 20 per cent as security. It just needs more research now before buying. If you crunch your numbers, fix your interest rate, and have your finance in place, you're fine."
What of some economists' fears that the market is overvalued? Again, Borsje is quick with an answer. "Your profit is made when you buy, not when you sell, so just buy under the market value. We've just bought 65 apartments in Manchester, at £11 million -£4 million less than the developers wanted. And if the market does go down, historically it's unlikely to fall by 10 per cent. No, nothing can go wrong.
"If things don't work out for someone, I'll simply say, show me what you did. They will have done something wrong -maybe they didn't do the research. If they follow the formula, I can guarantee that there should not be a problem."
A guarantee, in the present economic climate, that is enticing avowedly novice investors to risk thousands of pounds on their dream.
(The Times, August 28, 2002)
This is how to make £25,000 in two hours from a room of strangers people who, in many cases, have recently lost their jobs or savings and need a place to pin their hopes. People like Terry, a 48-year-old currently "between opportunities" who lost £15,000 in a rogue charity-collecting franchise; or Ted, just made redundant in his early fifties by an IT firm and now concerned about his diminishing pension.
They and around 200 other opportunity-seekers have been enticed to a London hotel suite by a newspaper advertisement headed "From nothing to millionaire in three years!" It promises to reveal for free the "simple formula" to wealth. Two hours later, many of them will have been queuing to hand cheques to the sharp-suited guru sprinting on to the stage.
"I've been looking for this all my life, and am very excited," Terry later exclaims, buttonholing fellow wealth-seekers to discuss whether this really is the answer. Ted goes a step further, giving thousands of £to the charismatic Australian at the podium who pledges the knowledge they will need to stop working forever.
The man responsible for this awakening is not a preacher, although he can move a crowd as skilfully as the sharpest televangelist. Warren Borsje's sermon, in fact, celebrates Mammon, and the magic formula that will bring his believers true financial freedom. Borsje starts by explaining that he will share with his flock the secret of becoming a millionaire within three years using other people's money. Today, however, the only clear winners are Borsje and his assistants preparing to swipe credit cards.
First, though, comes the patter. Borsje, well-built in a black suit and with gelled hair, says that he almost went bankrupt five years ago, but now has homes in Brighton, Melbourne and the French Riviera, 68 rental properties, three businesses and extensive stock investments. He retired last year at 27 but soon grew bored with endless golf and surfing, and now spends a week each month educating the rest of us.
Five thousand prospective millionaires have already attended his London workshops, in addition to 9,000 overseas, and now Borsje plans to expand across the UK.
The disproportionately black and Asian audience - comprising young women, retired couples, sharp-suited executives and labourers in overalls - listens intensely as Borsje explains that he will teach them a new way to think about money. He asks who among them are novice investors (almost all), and then makes them fold their arms counter-intuitively, just to show how hard it is to unlearn established patterns. They sit gripped as Borsje recounts how he left school almost illiterate at 13 and, after completing a carpentry apprenticeship, fell deeper into debt. Then came his own awakening, on New Year's Day 1997, when he had reached rock bottom emotionally, physically and financially. "I could either accept it or re-educate myself," he intones.
Naturally, he chose the latter path, studying the investment world and working for a property millionaire until he developed his "concept". The problem, as he explains it, is that the global money-control system inevitably rewards the rich, while the tax system squeezes those who work.
So why choose a job when by following his simple "Entrepreneurial Formula" we can all choose to be rich? "Absolutely anyone can do what I did if they are prepared to learn and act," he pledges. "But most of us simply don't find the time."
Scattered throughout Borsje's disquisition are references to "the course" -a valuable opportunity to study his ideas in more depth over a weekend. "You have to pay," he assures us in passing, "but there's no pressure."
At a mere £2,490 a person - a price disclosed only at the end - the course could certainly change the immediate circumstances of some of those showing interest. But by now, many in the audience are mesmerised by Borsje's charm. Some 17 of them pay right away, enticed by a discount for "investing" immediately. The sales pitch clearly works: according to his company, New World Education, around 500 have paid to attend the weekend courses since April.
And the secret formula? In a nutshell, borrowing money to buy rental properties. The buy-to-let market may be collapsing in much of Britain, but Borsje has no time for doubters: he promises that his followers can make millions. Borrow as much as you can to buy, he advises, and then further remortgage after carrying out basic cosmetic improvements. Then use the additional cash to buy other properties or simply as an income, as he has done with his vast portfolio. "Living on equity, my friends, is the only way to fly -it's tax free, and you just watch the rent money pop into your account every month."
With landlord's insurance there is no risk of tenant trouble, he insists, and a new breed of "mortgage packer" - less discerning than brokers - will arrange loans for course "graduates" with few questions asked. They will even lend to those with poor credit records, though Borsje cannot go into detail now. "We don't tell you today how to generate the capital," he says, "but on our course we go through the 14 ways."
Ted, the former IT worker, queues to sign up with his wife Lois. The couple, from West Sussex, are typical of the believers, many of whom have suffered financial setbacks. "I've just been made redundant, and pensions these days are worth toilet paper," he says. "We'd been thinking about investing in property with our own money, but Warren said not to. The question is finding a lender - presumably all that will be on the course."
Terry, a big man in a rather loud suit, is openly debating whether to sign up now. "It sounds fantastic for people who don't have the knowhow," he says. "But there are a lot of cowboys out there. I'm wondering, if everyone was going to make the sort of money they promise, why aren't there thousands of companies doing this?"
The answer, according to property experts, is because the market is far more troubled than Borsje's formula will admit. "This will work only if property prices continue to rise, and that's just not going to happen," says John Wriglesworth, housing economist with Hometrack. "It sounds like he's appealing to desperate people. There's no fast-track solution to wealth in the property market, and getting yourself into debt at this stage, when rental yields are falling and interest rates may rise, is very dangerous. I'd advise people to steer well clear."
At the Royal Institution of Chartered Surveyors, spokesman Ray Barrowdale is also suspicious. "It would be very dodgy now to invest in property for short-term gain -you could lose money, or at least not make as much as you expected. The buy-to-let market is saturated. Novices in the market could find they can't get tenants."
But Borsje, talking to The Times later, is undaunted. "I'd agree that there's definitely a risk in buy-to-let -but not for people who come on our course. We tell our graduates to build a cash buffer of 10 or 20 per cent as security. It just needs more research now before buying. If you crunch your numbers, fix your interest rate, and have your finance in place, you're fine."
What of some economists' fears that the market is overvalued? Again, Borsje is quick with an answer. "Your profit is made when you buy, not when you sell, so just buy under the market value. We've just bought 65 apartments in Manchester, at £11 million -£4 million less than the developers wanted. And if the market does go down, historically it's unlikely to fall by 10 per cent. No, nothing can go wrong.
"If things don't work out for someone, I'll simply say, show me what you did. They will have done something wrong -maybe they didn't do the research. If they follow the formula, I can guarantee that there should not be a problem."
A guarantee, in the present economic climate, that is enticing avowedly novice investors to risk thousands of pounds on their dream.
(The Times, August 28, 2002)
posted by David Rowan at Wednesday, August 28, 2002
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