Like the housing industry, real estate “guru” Mark Bosworth is in crash mode

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Van Campen tells New Times, "Larry has every right to be upset."

However, Van Campen says, he didn't know as a salesman how bad things would get for Hutchinson and other Bosworth clients.

"I lost 10 houses myself," Van Campen says. "I believed my own advice."

Hutchinson says it turned out he couldn't get anywhere near the rent money on his properties that Home America said he could. That, combined with the drop in housing prices, caused Hutchinson's investment to hemorrhage money.

At the same time, Bosworth's property-management company earned thousands of dollars from Hutchinson.

Home America received $50 to $75 a month to manage each property, plus a setup fee and ongoing fees to advertise and prepare the homes for rental. Bosworth claimed the average rental home managed by his company was occupied by tenants for about three years, with only 17 days of lost rent because of vacancy.

Some of Hutchinson's properties were vacant for more than 100 days, and when he complained that the Home America staff was not doing enough to find tenants, Van Campen told him to consider paying the company's staff members fees to motivate them, Hutchinson says.

"I threw some deals to the salespeople, said, 'If you can get one rented [by a certain date], I'll give you $200,'" he says. "It never made any difference."

Hutchinson became skeptical of the maintenance bills sent to him by Home America.

"They said they would freshen up the places. I don't know what they [did]," he says.

One time, he visited four Phoenix properties that weren't renting and discovered that none had a "for rent" sign out front. Company reps offered him a lame excuse when he complained, he says.

Another time, Home America told him they planned to bill him $3,000 for some painting work at a house. He told them to forget it and found someone to do the job for $300.

Hutchinson showed New Times an e-mail exchange that shows how frustrating it could be to deal with Home America.

The investor had sent the company $5,000 for painting and other work to be done on a rental home in July 2006. On July 25, Hutchinson sent his Home America contact, Cade Galloway, an e-mail explaining that a tenant had moved into the house and did not care whether the house was painted. "Go ahead and send the $5,000 back to me," Hutchinson told Galloway.

By that fall, Home America still hadn't refunded Hutchinson's money. So on October 24, Hutchinson told Galloway that because another home needed $2,260 in repairs, the company should take that amount from his $5,000, have the work done, and mail him the difference.

The repairs were completed, but Hutchinson's balance wasn't sent, despite Galloway's promises. Finally, in late February 2007, one of Home America's top managers, Berne Fleming, ordered Galloway to keep his promise to Hutchinson and pay the balance, copying the e-mail to Hutchinson.

The refund finally came in July 2007, a year after he requested it.

He says the story is just one example of the "heartburn" the company caused him while the market downturn leached equity from his investments. One by one, Hutchinson's properties went into foreclosure.

In April, the last rental home he had bought and managed through Home America went into foreclosure, he says.

"That was my retirement; that was my dream," Hutchinson says of his investment. "Now it's all gone."

A former Bosworth employee says Hutchinson is just one of many customers with a similar experience.

To be sure, the market downturn was a big problem. But the bigger problem for Bosworth's clients was the mismanagement that took place on his watch, according to court documents, former employees, and investors like Hutchinson.

The aforementioned anonymous employee gave New Times a list of investors who, he says, lost more than a combined $3 million in commercial property investments made with Bosworth.

One of the names on the list is Barbara Broyles, who says she worked for Bosworth for about three years.

Broyles confirms that she lost $50,000 on an office building deal that went bad, and tells New Times she lost an additional $50,000 in another investment with Bosworth, Van Campen, and others to buy properties in Mexico. Broyles says she and a group of the Mexico investors, who estimate they lost about $1 million combined because of Bosworth's poor handling of the deal, are considering a lawsuit.

She claims Bosworth often spent his investors' money on "things they did not invest in," like side business deals or personal items.

Broyles also says she saw firsthand some of the same fraudulent activity mentioned in the Magelsen lawsuit. For instance, there was "the air-conditioning scam."

Bosworth cooked up an idea to do bogus "maintenance" on the rental homes managed by Home America, she says.

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Ray Stern has worked as a newspaper reporter in Arizona for more than two decades. He's won numerous awards for his reporting, including the Arizona Press Club's Don Bolles Award for Investigative Journalism.