Tortoise Club

Frequently Asked Questions

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Q: Do the Strategic Partners pay a commission or fee to the club, or to Al, that increases my cost when I buy a property? A: No. The club, and Al, get no part of the commissions or fees. Al does not own any part of any of the Strategic Partners. As a Member, you pay only your club dues. The Strategic Partners are all also Members and pay the same dues as other Members. Some of the Strategic Partners may also be advertisers on Al's radio program or sponsors of some events.
A new service, Turnkey Investments run by Al Lee & Associates, Inc., has been added. They do make a profit on properties they sell as described on the web page.

Q: Why does Al do this? I am suspicious when it looks like someone is offering me too good a deal and I don't understand how Al makes money from this. A: Al has a business principle that says that getting a customer is hard and expensive, so a good business model is designed to keep customers by giving them a good deal. Hundreds of Members paying relatively small monthly or annual dues year after year because they are making money by being club members is an ideal business model according to Al's principle. Some people call this "win-win", but it really just makes sense.

Q: Since I don't live in Texas, I will have to rely on the Strategic Partners to handle just about everything. Won't that cost me more? A: No. They do not charge any extra fee or charge to handle your properties whether you live near or far. Al's method involves you being a hands-off investor regardless where you live, so it really makes no difference. Some Members live in Texas, most do not.

Q: How can I trust the Strategic Partners when I live in another state? A: Good question! The truth is that no matter what you invest in, stocks, mutual funds, bonds, rare coins, you must trust someone. The Strategic Partners are held accountable by Al for maintaining a high standard of honesty and fair dealing with the Members. If one is found to violate this, Al removes them (it has happened several times already). They understand that whatever they might gain by one shady deal would be lost hundreds of times over by losing their connection with the club. In fact, they generally compete to give Members the best service in order to get the highest ratings on the club bulletin board. Finally, many of the Strategic Partners are the same people that Al himself uses.

Q: Why do you limit your investments to Texas? Is is because Al lives there? A: Al is originally from New York and Florida, not Texas. The reasons for focusing on Texas are best described in the article from June 30th. In fact, you ought to read all of the articles posted. Just start with the directory.

Q: Do your Strategic Partners help Members with estate planning? Al recommends that investors have a carefully worked out plan for their properties in the event of their death. A: No. That is one service we can not include because the rules are different in each state and you must use a local service in order to comply with your laws. We do have Texas real estate attorneys who could assist you if you are a Texas resident, as some club members are, but not for other states.

Q: How many members does the club have and how many are from out-of-state? A: At this time (March, 2004) there are about 120 active Members, and about 85% of them live outside Texas.

Q: Couldn't I do business with the Strategic Partners even if I were not a Member? A: Yes, you could. They are all independent businesses; however, you would not get the discounts and, more importantly, you would not get the priority treatment. Some of our Strategic Partners have cultivated relationships with builders to buy houses at below-market prices. When a builder has a sale fall through because the buyer's credit did not pass muster, or for some other reason, they want to get that house out of their inventory quickly. If they advertised a fire-sale price, it would hurt their sales in the entire development, but they can come to our Partners and "quietly" offer the house to one of us at a lowered price in exchange for a quick sale. Of course, they lease for the same rent regardless whether you paid market price or got a special deal. These deals are not always available, so don't base your strategy on getting them. The Partners will normally call Members that they have already done deals with and who they know are solid buyers when these opportunities come up. They won't ever call any non-members at all--there are just too many Members who will take the bargains.

Q: The content of your websites is impressive, but, as an IT professional, I must say that the security is pretty easy to break through. Why don't you have a stronger security system? A: The security system on the website is quite basic. It is intended to keep honest people honest. If you are clever, you can easily get around it. We understand that. The real security, though, is the relationship Al has with the Strategic Partners. All you might be able to "steal" from the site is access to the people who make this all work, and they are all trusted business associates and/or friends of Al's who will simply tell you to go join the club and then call them back. If you break through the security and access the club services, you won't be the first person to do that and then come back and join after you figure out that it doesn't cost to be a Member, it pays. It saves a lot of embarrassment to just come through the front door in the first place.

Q: How did you arrive at the first-year dues of $977? Does it have some significance? A: We determined that a Member would probably receive about $800-$1000 in discounts from the brokers, property managers, lenders, inspectors, etc. on the purchase of just one house. We want serious investors as Members, not just folks wanting to hang around with investors and hope something will rub off. We set the dues at a rate that will be attractive to anyone who intends to buy at least one property after joining, as they will get back most or all of their dues in the form of immediate savings. Most investor clubs are forums for discussion and education--nothing wrong with that--but, the Tortoise Club is about action. There is a place for both types of organization in this world; you just have to decide where you belong.

Q: I noticed references to Southern Methodist University and Texas A & M. Is the Tortoise Club affiliated with them? A: No. Al used Texas A & M's Real Estate Center as a reference for his book and still uses them for data to prepare for his radio program, but neither he nor the club are in any way affiliated with them. Al teaches a continuing education class on real estate investing at SMU each semester, but, again, there is no affiliation with the club. The club is operated by Al Lee & Associates, Inc., a Texas corporation.

Q: Does the club actually ever refuse any person who wants to join? A: Yes, we have refunded the dues to several members for whom the Tortoise Club was just not what they needed. Because of the information that is published on the website, most people know whether or not they will fit well into our program before they join, but once in a while we have had a person join who did not.

Q: I read somewhere that you might increase the dues in the future. If I join now at the current dues, do I risk getting hit with an increase soon? A: No. It has been the clubs policy from the start that your dues will be held at the same rate as when you joined, even if we later increase the dues for newer Members. There might be a time years in the future when we must impose an across-the-board increase to compensate for inflation, or the rising cost of living, but that is unlikely for a number of years and would be a very reasonable percentage. The very early "charter" members got a great deal in exchange for taking a risk on a new club. They continue to get that great deal today.

Q: I have noticed that Al seems to be associating with the "Weekend Millionaire" guys [Mike Summey & Roger Dawson] recently. Is the Tortoise Club affiliated with them, or vice-versa? A: No, neither. Al and Mike became acquainted through Al's radio program and they discoverd many areas of agreement. Al participates as a "guest expert" in their online chat room that enables people from anywhere in the world to ask questions and discuss matters relevant to real estate investing with all three of them. (Interestingly, no two of them agree 100% with one another, but all three agree about 90%) Al might participate in joint projects with Mike and Roger in the future, but their association is now merely a casual one based on mutual respect for each other's knowledge, experience, and integrity. The "Events" calendar on our website has a link to the chat room website. The formal chats are scheduled for 8pm Eastern, 5pm Pacific, time every Monday. Impromptu chats can occur any other day at those same times.

Ethical Standards

Because many so-called "experts" in real estate investing are teaching people to do things that we consider wrong, or unethical, or dangerous, or even illegal, we are posting a statement of the standards that Tortoise Club members are expected to abide by. Persons who do not agree with these standards should not become members as we may terminate the membership of anyone caught violating them. Please read carefully.

Dealing with Other Members
Whether a member is a strategic partner or a regular investor he/she is expected to deal honestly with all other members at all times. Strategic Partners are expected to be fair and truthful and to give good service and good pricing to members. Likewise, members doing business with the strategic partners are expected to deal fairly with them in return.

Loan Applications
Members are expected to be truthful when providing information for loan applications. It is not acceptable for you to state that a house will be your primary or secondary residence in order to obtain more favorable financing terms and rates if the house is actually an investment property. If you say you will occupy the house, you had better occupy it. If you do occupy it for a while and then turn it into a rental property, that is fine--you were truthful on the application. If a loan officer coerces you to lie on the application, find another mortgage company. The person who would steal from the lender would also steal from you. You can refer to http://www.mortgagebankers.org/MBAFightsFraud/ to see what the mortgage industry is doing to prevent fraud.

Title Transfers
Obtaining a loan in your individual name in order to get good rates and terms on the loan and then secretly transferring the deed to any other person or entity (an LLC, for instance) without the express written permission of the lender is a violation of the terms of the mortgage and is not acceptable. Other similar deceptions are unacceptable, as well. Just because the lender is big, rich, or a corporation does not make it OK to lie and deceive--regardless what some "expert" or "mentor" has told you.

Lender Calling Your Loan
If the lender calls your loan due because you intentionally deceived them and obtained the loan under false pretenses, we consider that ethical--even if the lender waits until rates have gone up and it is most advantageous for them to do it. If you try to defraud the lender and it backfires on you, you were the one who was wrong, not they. If the lender is federally-insured and you are charged with Defrauding a Federally-Insured Institution, that is the risk you took.

Taking Advantage of Seller's Ignorance
In the first place, most of the sellers who you think are "ignorant" and can trick into giving you a really good deal are merely pretending to be ignorant so you will think you are swindling them while they sell you a lemon. Secondly, it is not our method to take advantage of anyone. It is not necessary to do so in order to prosper. Sometimes a good deal will fall into your lap like a bluebird falling from the sky. It is fine to take it so long as you deal honestly with the seller.

Faking Expenses to a Corporation
Some "experts" might tell you to put properties into a corporation and to take money out as "expenses", which you have concocted. This is foolish, unnecessary, and illegal. These advisors are probably trying to get you to pay them to form a corporation with the promise of tax benefits and liability protection. Your largest liability will be to be charged with tax fraud, which the corporation will not protect you from. The corporateion will actually probably cost you more taxes and tax preparation, not less.

Q: Do the Strategic Partners pay a commission or fee to the club, or to Al, that increases my cost when I buy a property?	A: No. The club, and Al, get no part of the commissions or fees. Al does not own any part of any of the Strategic Partners. As a Member, you pay only your club dues. The Strategic Partners are all also Members and pay the same dues as other Members. Some of the Strategic Partners may also be advertisers on Al's radio program or sponsors of some events. A new service, Turnkey Investments run by Al Lee & Associates, Inc., has been added. They do make a profit on properties they sell as described on the web page.
Q: Why does Al do this? I am suspicious when it looks like someone is offering me too good a deal and I don't understand how Al makes money from this.	A: Al has a business principle that says that getting a customer is hard and expensive, so a good business model is designed to keep customers by giving them a good deal. Hundreds of Members paying relatively small monthly or annual dues year after year because they are making money by being club members is an ideal business model according to Al's principle. Some people call this "win-win", but it really just makes sense.
Q: Since I don't live in Texas, I will have to rely on the Strategic Partners to handle just about everything. Won't that cost me more?	A: No. They do not charge any extra fee or charge to handle your properties whether you live near or far. Al's method involves you being a hands-off investor regardless where you live, so it really makes no difference. Some Members live in Texas, most do not.
Q: How can I trust the Strategic Partners when I live in another state?	A: Good question! The truth is that no matter what you invest in, stocks, mutual funds, bonds, rare coins, you must trust someone. The Strategic Partners are held accountable by Al for maintaining a high standard of honesty and fair dealing with the Members. If one is found to violate this, Al removes them (it has happened several times already). They understand that whatever they might gain by one shady deal would be lost hundreds of times over by losing their connection with the club. In fact, they generally compete to give Members the best service in order to get the highest ratings on the club bulletin board. Finally, many of the Strategic Partners are the same people that Al himself uses.
Q: Why do you limit your investments to Texas? Is is because Al lives there?	A: Al is originally from New York and Florida, not Texas. The reasons for focusing on Texas are best described in the article from June 30th. In fact, you ought to read all of the articles posted. Just start with the directory.
Q: Do your Strategic Partners help Members with estate planning? Al recommends that investors have a carefully worked out plan for their properties in the event of their death.	A: No. That is one service we can not include because the rules are different in each state and you must use a local service in order to comply with your laws. We do have Texas real estate attorneys who could assist you if you are a Texas resident, as some club members are, but not for other states.
Q: How many members does the club have and how many are from out-of-state?	A: At this time (March, 2004) there are about 120 active Members, and about 85% of them live outside Texas.
Q: Couldn't I do business with the Strategic Partners even if I were not a Member?	A: Yes, you could. They are all independent businesses; however, you would not get the discounts and, more importantly, you would not get the priority treatment. Some of our Strategic Partners have cultivated relationships with builders to buy houses at below-market prices. When a builder has a sale fall through because the buyer's credit did not pass muster, or for some other reason, they want to get that house out of their inventory quickly. If they advertised a fire-sale price, it would hurt their sales in the entire development, but they can come to our Partners and "quietly" offer the house to one of us at a lowered price in exchange for a quick sale. Of course, they lease for the same rent regardless whether you paid market price or got a special deal. These deals are not always available, so don't base your strategy on getting them. The Partners will normally call Members that they have already done deals with and who they know are solid buyers when these opportunities come up. They won't ever call any non-members at all--there are just too many Members who will take the bargains.
Q: The content of your websites is impressive, but, as an IT professional, I must say that the security is pretty easy to break through. Why don't you have a stronger security system?	A: The security system on the website is quite basic. It is intended to keep honest people honest. If you are clever, you can easily get around it. We understand that. The real security, though, is the relationship Al has with the Strategic Partners. All you might be able to "steal" from the site is access to the people who make this all work, and they are all trusted business associates and/or friends of Al's who will simply tell you to go join the club and then call them back. If you break through the security and access the club services, you won't be the first person to do that and then come back and join after you figure out that it doesn't cost to be a Member, it pays. It saves a lot of embarrassment to just come through the front door in the first place.
Q: How did you arrive at the first-year dues of $977? Does it have some significance?	A: We determined that a Member would probably receive about $800-$1000 in discounts from the brokers, property managers, lenders, inspectors, etc. on the purchase of just one house. We want serious investors as Members, not just folks wanting to hang around with investors and hope something will rub off. We set the dues at a rate that will be attractive to anyone who intends to buy at least one property after joining, as they will get back most or all of their dues in the form of immediate savings. Most investor clubs are forums for discussion and education--nothing wrong with that--but, the Tortoise Club is about action. There is a place for both types of organization in this world; you just have to decide where you belong.
Q: I noticed references to Southern Methodist University and Texas A & M. Is the Tortoise Club affiliated with them?	A: No. Al used Texas A & M's Real Estate Center as a reference for his book and still uses them for data to prepare for his radio program, but neither he nor the club are in any way affiliated with them. Al teaches a continuing education class on real estate investing at SMU each semester, but, again, there is no affiliation with the club. The club is operated by Al Lee & Associates, Inc., a Texas corporation.
Q: Does the club actually ever refuse any person who wants to join?	A: Yes, we have refunded the dues to several members for whom the Tortoise Club was just not what they needed. Because of the information that is published on the website, most people know whether or not they will fit well into our program before they join, but once in a while we have had a person join who did not.
Q: I read somewhere that you might increase the dues in the future. If I join now at the current dues, do I risk getting hit with an increase soon?	A: No. It has been the clubs policy from the start that your dues will be held at the same rate as when you joined, even if we later increase the dues for newer Members. There might be a time years in the future when we must impose an across-the-board increase to compensate for inflation, or the rising cost of living, but that is unlikely for a number of years and would be a very reasonable percentage. The very early "charter" members got a great deal in exchange for taking a risk on a new club. They continue to get that great deal today.
Q: I have noticed that Al seems to be associating with the "Weekend Millionaire" guys [Mike Summey & Roger Dawson] recently. Is the Tortoise Club affiliated with them, or vice-versa?	A: No, neither. Al and Mike became acquainted through Al's radio program and they discoverd many areas of agreement. Al participates as a "guest expert" in their online chat room that enables people from anywhere in the world to ask questions and discuss matters relevant to real estate investing with all three of them. (Interestingly, no two of them agree 100% with one another, but all three agree about 90%) Al might participate in joint projects with Mike and Roger in the future, but their association is now merely a casual one based on mutual respect for each other's knowledge, experience, and integrity. The "Events" calendar on our website has a link to the chat room website. The formal chats are scheduled for 8pm Eastern, 5pm Pacific, time every Monday. Impromptu chats can occur any other day at those same times.