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15 September 2003

The Scammers and The

His best investment was the one with no “advisors”.

I am 53 years old and have been in Australia for 20 years now. I have been to your eye opening consumer seminar. I regret that I did not hear you earlier.

For many years I have not been interested in real estate or investing, or to be more precise in anything what can make money – my excuse always was “I am not a money minded person” – and looking at it now I’m still not a money minded person, probably never will be.

In early 2000 I “tumbled” into an information session by a group of nice people from Queensland who had flown down to Melbourne for these sessions to tell people about “saving tax money” and investing in property and building savings for retirement.

Well, that all was just great and fantastic – superannuation seems to get less and less the longer you save it. Something needed to happen. I was so excited about this whole concept that the next week I bought a house in Chadstone (here in Melbourne) for $186,000. That was in February 2000. Last valuation earlier this year was $320,000 -so this one worked out just fine and I did it without the help of one of those organisations that say they want to help you.

Then my wife and I flew up to Queensland, where these nice people came from and they showed us a few properties on the Gold Coast. We ended up buying a one bedroom apartment in a managed complex of apartments in a nice environment, swimming pool etc, price $170,000. It all seemed okay.

Three years later, when I was refinancing these properties to purchase another property, my bank told me that “I probably paid too much for the QLD property, it is valued at $115,000”. This was the same banker who, three years earlier, said, “The valuations are fine, no problem, we can give you the money.” I am no longer with the NAB after this discovery. We obviously were ripped off by those nice people with the knowledge of my trusted bank!

About the time I refinanced my investment properties I came across Henry Kaye’s group, or should I say they came across me by knocking at every door in our suburb.

After the QLD experience I thought “information does not hurt, let’s go to the information night”. The NII presenters “sold” their company as approved by ASIC, “There are many other Investment courses around, NII is one of the very few who have this approval”. That was their story.

We went to another session, got some information and ended up signing for a training course for $13,995 plus $1,695 for another thing they sold through the first seminar session. I later found out you get most of this kind of information free from the internet anyway.

I can hear you say – “When do you learn?” I ask myself this question sometimes. I should have the intellect, I have a tertiary education. Sometimes I wonder. The fundamental mistake I make is that I trust people for a start. And if I would be able to change this I think I’d probably lose my belief in the human race. I don’t know which one is worse.

I am glad I came to hear you speak the other night. “Don’t sign anything!” Hopefully, this time I will make better use of my grey cells. Thank you Neil.

This story serves as a warning to anyone about real estate investment advisors or so-called “educators”. It also shows that the best real estate investments are often available in your local area from a local agent. Just buy real estate at a fair price. And wait.

Although, be careful investing in any real estate at the moment.

Consider the old investing maxim – “Buy in gloom and sell in boom.”

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