THESE GUYS CAN DESTROY YOUR FINANCIAL FUTURE.
By Neil Jenman
An old property scam in a new disguise is about to target the public.
Over the past 25 years or so, this scam has destroyed – yes, literally destroyed – the financial futures of thousands of Australians.
Here is the scam: ‘SELLING DUD INVESTMENT PROPERTIES FOR HUNDREDS OF THOUSANDS OF DOLLARS MORE THAN THEIR VALUE.’
The crooks behind these scams are among the most evil people in our society. And no, they are rarely mainstream agents. They are the quintessential wolves in sheep’s clothing. They come in a variety of disguises. The more credible they appear, the more dangerous they are.
These crooks go to inordinate lengths to create a cloak of credibility. Including threatening their critics or anyone who dares to expose them.
Here are ten ways they catch you.
- They have a credible sounding name. Some of the names sound so solid you’d be forgiven for thinking you are dealing with a multi-national. Indeed, one of these crooks (who I interviewed when he was in maximum security prison in 2008) once had a map of the world on his website showing fake locations in many of the world’s cities.
- They prey on your fear. In typical crook style, they scare you with a problem, such as you’re destined to be old and broke; and then offer you a solution. They sing the praises of real estate and how it goes up in value. But not their real estate. It has already been increased in value by the amount you are being ripped off. It can take years for these properties to ever appreciate to the price at which they are sold. Right now, they are using the COVID-19 pandemic to prey on the increased fear in the community. They are saying now, more than ever, you need a real estate portfolio to secure your future. Yes, maybe, but not properties from these guys.
- They claim to be philanthropists. This is truly sickening. They talk about the charities they support. Sometimes there will be a ‘front man’ who comes across as a real darling. He will grab your heart strings with stories of how he struggled and how he now wants to “give back” to others so they don’t have to suffer as he once did. This is not donating, this is marketing. True givers seldom want their generosity made public and they never use it as part of their sales pitch.
- They have won awards. Oh, look out for this one. You will see them promote themselves as the “most awarded” or a member of an organisation that seems credible (and yes, sometimes the real estate institutes).
- They ‘buy’ credible people. They will use a person who is well known to the public to promote their business. Or they will bring in a ‘credible’ guest speaker for a ‘webinar’. Or they will ‘partner’ with real estate researchers or identities who vouch for their ethics. Watch out, the people promoting these crooks have either been duped themselves or are part of the scam. With enough money, you can buy a lot of people. There is a saying: “Everyone has their price”. In real estate, except for a rare few, this is so true. How can you tell which credible people have not been bought? Easy, they never align themselves with investment experts.
- They claim to be experts. They will talk about their years in real estate and how they know the “secrets” to accumulating wealth. They will claim to do extensive research into “growth areas” where they claim property has the best chance of appreciation. In truth, they flog properties wherever they can make the most money – usually on fringe areas of the major capitals. This is where there are veritable production lines of properties built purely for the investment scam markets. It’s an industry in itself.
- They have testimonials. If you think ‘Rate My Agent’ is often dodgy by forbidding comments from unhappy sellers, you haven’t seen anything yet. The testimonials from these guys are not just ‘sus’, many are fiction. Or, if they are real, look carefully at what they say. They will talk about the company’s “great service” and how XYZ Company “made the process so easy”. None say: “I bought three properties which doubled in value and I am now enjoying my retirement”.
- They are a “one stop shop”. The three words you most need to beware of are “one stop shop”. This simply means they have found people in other professions – mortgage brokers, lawyers, valuers – who are just as crooked as them. Back in the 1990s, one journalist referred to this as “the gravy train of deceit”.
- They use soft pressure. They don’t want you to think they are putting any pressure on you, oh no. But these current prices from the developer are not going to last after this month. Or this is the last lot in this section. It will not feel like the high-pressure that, say, car salesmen or auction agents use, it’s softer. But it’s still pressure. Never ever succumb to pressure. Bad deals are never scarce.
- They acknowledge crooks and scams. This is the greatest chutzpah in the real estate world. It is laughable to those in-the-know. These investment advisors claim to be aware of the crooks in the real estate world which, they say, is why they offer an honest investment service. Yea right. No, what it means is: They saw how much money could be made in scamming gullible investors and they couldn’t resist jumping aboard.
So, how do you avoid getting caught in an investment scam?
In your desire to protect yourself from a tough retirement, the first thing you need to do is be sure you do not make things worse for yourself. Change your priorities. Instead of looking to increase your future wealth, focus upon protecting your current wealth. Secondly, you need to be sure that any property you buy will not impede the future growth of your wealth.
Here are four ways to protect yourself from investment scammers.
- NO TRUST. Never trust anyone offering real estate investment advice. Assume they are all guilty until proven innocent. Just because you’re honest and you don’t cheat others, don’t expect others to be like you. Don’t let crooks get rich from your trusting nature.
- AVOID COOKIE-CUTTER PROPERTIES. Never buy properties – units or houses – in areas filled with near-identical properties. Say you buy a unit in a block of one hundred similar units. All it takes to destroy the value of your unit is for one person to crack under their own financial pressure and sell at a huge loss. This will drag the value of all the units in the block down.
- VISIT TWO LOCAL AGENTS. Before you buy any property from any slick, well-presented investment company, get the address of the property and call two local agents. Tell them what you are about to do and ask: “Do you think this is a good investment?” Most local agents are aware of property scammers who pollute their suburbs. They never say much except in whispers or if directly asked. They fear these crooks who fiercely protect their carefully crafted credible appearance. They don’t want to be sued by crooked lawyers. Or worse, they don’t want to get bashed. Don’t think this is alarmist. There is more money in many property scams than illegal drug dealing. And the penalties are less severe. When was a salesperson ever jailed for selling an over-priced investment property? Ideally, make your own way to the area where you are being asked to buy. Visit many agents. Check local prices. The few hundred dollars this will cost you will prevent you losing tens, possibly hundreds, of thousands of dollars.
- CALL JENMAN SUPPORT. Call me, Neil Jenman or one of my colleagues. Give us the details of a property. We’ll check it out for you. No charge and no obligation. And no, we will never ‘sell’ your name. Despite being approached on many occasions and being offered mega sums of money, we have never recommended any investment company. Your safety in real estate is our priority. Whether buying an investment property or selling your family home, we want to support and help you. And remember this: We will help you all the way for any aspect of real estate. We don’t just help you find a good agent; we help you get the best result. All without asking you for money or to sign anything. Follow the advice of a man who’s currently enlisting our support to sell his home. He is convinced that “no one should talk with anyone in real estate without talking to us first”. He wants t-shirts printed for Jenman Support with these words emblazoned on them: “NO NEIL, NO DEAL”.
That’s good advice. Please accept it.
PLEASE NOTE: Our focus is upon helping consumers. Abuse from agents on our web site or Facebook page will be deleted, ignored or well publicised – it depends on our mood.
But one thing will never vary: We will never stop doing what we love most – helping polite and honest consumers get the best deal possible in real estate. And, of course, if any agents are serious about taking care of consumers, we’ll help you too. Thank you.