ABC TV 730 Report US Property 23rd April 2012

A serious investigative journalist has spent the last 6+ months putting together a story on some of the scams being operated in the US property market.

It took a while but we got there in the end. I suspect it will become compulsory viewing for anyone contemplating a US property purchase as it outlines exactly how easy and how nasty these operators can be.

This segment started because my best (most informative) posts were deleted, and/or rewritten by moderators on this site. Assuming they understood the basics of what the posts were about, I was gobsmacked that a website that supposedly bases itself on honest exchange of information was not allowing any such blatant rip off cases to be written about or discussed in detail. If the professional property 'industry' (for want of a better word) could not, or would not say anything then I would find someone who could. The ABC was VERY interested - and especially that no one in the public domain were able to voice concerns to people.

It took time, but two very nasty cases came up who were prepared to tell their story on camera. It is extremely galling to me that if more publicity had been made of the operators these two guys fell foul of then one of them would not have lost his life savings and not now be able to retire from a lifetime of public service stopping bad guys from hurting other people. We know there are hundreds, if not thousands affected, and primarily because no one was prepared or allowed to speak up! As was said at the end of WWII 'Bad things happen when good people say nothing'.

Thanks to people like Emma and Jay at True Wholesale Homes (and there are a lot more I know, but these two I think are up there with the best, if not the best) there is now more information out there, but a year ago there were precious few 'telling it like it is'.

I hope the segment does the job I believe it will. I urge anyone to watch it and make no mistake the scams are widespread and NOT limited to the couple of operators in the story. Learn the processes they use and avoid them. It isn't hard, but you must be suspicious - you are right to question.

BTW: We have been told the show will air on Monday - given Gillard and Swan's propensity to do insane things, it may be delayed as it was by the floods etc. Accept my apologies if you turn on to watch it and it isn't on - have faith, it will be:)
 
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I was gobsmacked that a website that supposedly bases itself on honest exchange of information was not allowing any such blatant rip off cases to be written about or discussed in detail.

... The ABC was VERY interested - and especially that no one in the public domain were able to voice concerns to people.

Without the evidence able to be uncovered by a "serious investigative journalist" as you put it, anything written by forum members on this site is largely hearsay - and we don't have the resources (or the inclination) to defend ourselves against potentially libellous statements made on this site by our members - hence we tend to take a fairly conservative approach to what content we allow to be published.

We leave the journalism to the journalists.

As such - I do welcome the ABC doing such investigations - I'm more than happy to have discussion about the content of their reports on this site, again.
 
Granted

Sim... I can see your point however....... = )

I know he is my brother but I owe Jeremy a massive apology and will make it public. My family had a huge fight about 8 months ago because he wanted me to speak up more about how I felt regarding Australians not being licensed - but if they weren't STRICTLY doing anything illegal and flips are legal - what does it really matter?

I kick myself. It matters. Sadly back then I was probably one of the very few outside of Jeremy who could/should have spoken up more (or what a "license" here means) but didn't - not really. Just over a year ago, I was spelling the name "Zillow" - of course people can do due diligence if they know the tools exist. I watched people who only 3 years ago wouldn't have had a clue themselves actually ridicule one person who was ripped off (ha ha, you should have done due diligence... THEY DID IN THEIR MIND - THEY WENT TO AN "EXPERT" SEMINAR! - ONE BOUGHT ALL THE BOOKS....).

What I should have YELLED:

"DON'T BUY UNLESS YOU ARE BUYING THROUGH A LICENSE REAL ESTATE AGENT - YOU HAVE ZERO RECOURSE IF YOU DON'T".

Google for real estate agents in the market of your choice. Yes, you will have to interview a few but you will quickly find one you like, understands foreign investors etc. Couple that with the support group here and you will be flying.....

"DON'T BUY FLIPS UNLESS YOU REALLY, REALLY, REALLY KNOW WHAT YOU ARE DOING - AND YOU PROBABLY DON'T - THOSE THAT DO IT FOR A LIVING ARE PEOPLE WANTING TO BE VERY VERY WEALTHY FROM YOUR MONEY!"

"IF YOU BUY AN LLC YOU ARE BUYING A FLIP - IT MAY BE WORDED AS ANYTHING BUT BUT YOU ARE BUYING A FLIP - AND YOU WILL HAVE NO RECOURSE"

"A US BUYERS AGENT LEGALLY REPRESENTS YOU IN THE PURCHASE OF REAL ESTATE AS A US BASED EXPERT IN REAL ESTATE WHO PUTS YOUR NEEDS ABOVE THEIRS and you can SUE if you are burnt for misrepresentation".

Pick a state, pick a city.... Any one.. People here online have used real estate agents... Ask them for a referral.

"WHAT IS THIS PERSON REALLY AN EXPERT IN??"

If you have gleaned anything and know anyone, help them.

There are Australians out there selling property over here in the US who haven't lived here, have barely visited here, certainly aren't licensed or worse, dealing with the bottom feeders of unlicensed flippers in WAY over their head who are unconscionably continuing to fleece Australians (there, I have said it) - but all they care about is the sale....... not even vaguely if the property is right for that person, meets their goals. Quick, quick, rush rush, this opportunity won't last forever - must grab the next property - you missed out on the last, don't miss out - you can't lose... quick....!!

My failing is that I basically assume everyone is honourable and that people don't rip people off, that everyone KNOWS how to do due diligence and that if they were just given the opportunity to "make good" or realize their errors they would do the right thing and pay people back. I have finally seen that that isn't even CLOSE to the case - GALLINGLY - and thus no, you can't make "exceptions" and NO CAVEAT EMPTOR SHOULDN'T BE SUFFICIENT EXCUSE FOR RAPING PEOPLE.

We have NO voice but here. Jeremy said nothing that wasn't public knowledge and in published written articles at that time that he was quoting and yes, they could have saved people.. saved to the tune of 100,000.

Investigative reporting wasn't needed - Jeremy quoted articles with full accreditation to their original source.

On this side of the fence (US) and for the last 6 months Jeremy pulled every favor he could stateside that he has gained over his ??20 years odd investing here to help one guy and the sad thing is, ultimately I feel a bit of responsibility.

Something we all forget though - ask these people:

Beyond their expertise in US real estate - how about just finding out if they are even successful at running a US based business (what is the old adage - anyone can open a business for 6 months??)...

"have you run a company before?" -
"how many US companies have you run"...
"if I put my money with you, are you going to be able to help me in 2 years time when the current property manager gets pregnant or moves companies?"

I have owned quite a few properties in Australia - all remotely managed - oh, and I live in the US....so of course you would give me money to help you buy investment properties in Australia - wouldn't you? I visit Oz every couple of months - that should be ample.... right?

Friends don't let friends get ripped off. Start a dinner conversation about due diligence in the US. Zillow, Trulia and Redfin - the next time someone asks you to a seminar - stand up there and ask the spruiker if you could have the address so that you can plug it into even just those three resources.

Oh, and then ask them if they know how much a toilet costs in the US.

Jeremy, I am really sorry and thank you for all the work that only a few of us know you put into this.
 
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My last post - It is one more than I wished to make but I cannot abide inaccuracies. I lost interest some months ago when important points were deleted and the meanings of things I wrote were changed to miss the point.

Goodbye, goodnight and good luck to all. I sincerely hope the posts I have made regarding US property have helped people avoid being ripped off. In hindsight, I didn't do enough - but I gave it my best shot.




With respect Sim, your comment above is patent garbage. The evidence was uncovered, posted and deleted by the moderators. I simply presented the original post to a journalist and added a few comments, I helped find one victim, they found the other and that was the story.

Your comments regarding libel are complete garbage. You are (as a group) disclaimed up the gazoo (read the post rules) so I cannot accept what you say there either. Nor can my lawyer (yes I checked) and nor can the legal arm of the Australian Government (in this case the ABC).

Conservative? Ridiculous. What you as a group have done through being ‘conservative’ is (by default) support complete scumbags going out and ripping people off blind. That is not what I posted about the US on this site for.

My family owes Jan and Ian Somers a lot. My posting here was about giving something back and supporting an ideal I felt Jan and Ian stood for. I am not my sister, and take offence to being lumped in with her (your PM regarding 'free advertising') I do however challenge you to find anyone with even 50% of her knowledge on the subject.

{deleted personal information}

When they watch the show, I want them to spare a little time to compare that feeling to the Policeman who wanted to retire and put his life savings into one of these spruikers we 'conservatives' will not speak about. He now cannot retire. His life is ruined – I shouldn't quote it because my sister only spoke of it second hand (not factual) so my impressions of serious self harm occurring could also be mis-construed and removed.

The information that was deleted on this site and the ‘conservative’ crap reasons given above are EXACTLY why this persons life was ruined. And we know there are dozens, if not hundreds of others.

I just cannot find it in myself to respect the decisions of ‘moderators’ that (even by default) support that type of behaviour. If you don’t understand the subject you are ‘ruling’ on – then talk to people until you understand it, or admit you know nothing and are much happier just talking about the merits of a carport vs a garage.

Bad things happen when good people say nothing.
 
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As I had no interest in US properties I haven't really been following that part of the forum so I am looking foward to the doco when it airs.

I gather the gist of the problem is a number of scammers doing the US flip thing- OP exposed it, was "censored" and loss suffered to innocent 3rd parties.

I think it is a bit unfair to blame Sommersoft- there are other avenues to get the word out. I would like to know the full story before I comment further but I'm thinking of Storm financial- where investors invest money they run the risk of losing it- you can't have an investment situation where you will come out on top everytime.
 
there are other avenues to get the word out.

I haven't posted here in yonks. But I have to wade into say - WHERE? Where are the avenues to get the word out? Obviously the word is NOT getting out - otherwise you wouldn't have all these poor sods in the USA getting ripped off time after time. This was the perfect site to inform people of the facts but it chose to delete some of the most crucial aspects of Jeremy's posts.

Knowing the USA market as well as I do - and equally knowing the gullibility of Australian investors - it was just too painful to see good people try to send the warnings and for the warnings to be lost in gobbledegook of disclaimers for the Somersoft site.

Thank you Jeremy. Thank you Emma. You have probably saved some suckers millions.
 
I have to wade into say - WHERE? Where are the avenues to get the word out? Obviously the word is NOT getting out - otherwise you wouldn't have all these poor sods in the USA getting ripped off time after time. This was the perfect site to inform people of the facts but it chose to delete some of the most crucial aspects of Jeremy's posts.

First up, given the broad based advertising that some of these companies are using, I think it is rather naive to believe that the general type of person likely to go into a deal like this and be ripped off is also a well educated member of Somersoft.

Indeed, one might counter-argue (I'm not, but the point remains) that most members of Somersoft are generally better educated and less likely to be ripped off by deals such as these. I'm not talking about just investing and losing money - there are no guarantees with investing ... I'm talking about actually getting ripped off by dodgy operators.

Yes, this is a good place to get the word out - but I can guarantee you that 95%+ of the population have never even heard about Somersoft, let alone trawled through the threads about investing in US property here.

Unfortunately the fact of the matter is that as publishers on the internet, we do have some responsibilities as to what gets posted on this site. We make certain editorial decisions about what we allow to be published and sometimes act to protect the best interests of ourselves and the site. This is not the first time that such content has been redacted or deleted - there is a right way and a wrong way to post such things online, and unfortunately the right way can be very difficult to get right.

What the members of Somersoft don't see behind the scenes is the number of legal threats we get based on what our members post on the forums. Many of these we ignore but some of them are serious enough to justify action on our part. Due to the history of threats made against us, we do tend to take a fairly proactive approach with our editorial decisions in these matters.

At the end of the day, regardless of whether we are right and would win any court cases brought against us - we have neither the resources, nor the inclination to defend ourselves in court to prove that we were "right" based on what our members post. Our position has always been - if you don't like our editorial process, publish your own blog - that way you get to set your own editorial standards and you can deal with the consequences yourself should you get sued.

For the record, the type of post of this nature that is likely to be acceptable on this site is one which describes (using as much fact and as little emotion as possible) the history of a deal or transaction which went wrong - as evidence of wrong doing. Naming a person or company and suggesting that what they are doing is illegal is not going to be acceptable. There are usually two sides to every story and if someone is indeed acting illegally, then the police are the correct people to deal with it - not us.

If the ABC want to do an expose about a company or practice which is damaging or dangerous, then I welcome and encourage that. However, we are not a large media organisation with resources behind us - we are just a small internet discussion forum.

By my calculation, with around 75,000 unique visitors each month, 90% of whom are from Australia, and with an adult population (between 15 and 65, according to WikiPedia) of around 15.4m people - that gives us coverage of approximately 0.4% of Australia's population.

Yes, Somersoft is a great place to cover issues like this, given the topic - but also given the wide-spread marketing campaigns some of these companies are running, the media is the perfect place to cover it.
 
The only reason peope get ripped off from wanting to buy short term/flip etc in the US is blatant greed. Its not investing. Why buy in the states? Why go through all the dramas? How can anyone expect to make money without massive risk by buying there? I won't say investing there. And exchange rate risk is the smallest of the roblems it seems.

Ridiculous.
 
Wasn't aired. More slippery slipper stories...........

But wasn't the Abbott interview that followed choice viewing?

So serious-looking. So censorious-sounding. So completely answer-evading!

It went something like this . . . .


"Precisely what entitlements will you cut, Mr Abbott?"

"Err. Eerrmmm. Of course, there will be cuts. Difficult cuts. Err. Eerrmmm."

"Ah huh. Well, why oppose means testing middle class welfare, like family bonuses and the private health cover rebate?"

"Err. Eerrmmm. One of our side said before in a policy statement in the past that these are not there to be touched. Never ever. Err. Eerrmmm."

"M'kay. Then, if increasing super from 9% to 12% at a cost of $3.6b is dumb, why do it?"

"Err. Eerrmmm. Of course, we can't not do some dumb things. Err. Eerrmmm."

"Is that right? Mmmm. So, you're ready for an election now. What are your policies?"

"Err. Eerrmmm. We do have policies! What did you ask? Err. Any policies will only be discussed during an election campaign. Not before. We have them. Err. Eerrmmm."

"Well, I guess that says it all. Thanks for . . . err. . . nothing."

"Err. Eerrmmm. Gollum. Welcome! Err. Gollum, gollum. Eerrmmm."
 
perusing news and saw this

Investors count losses on Detroit property

Private investors are being warned about the dangers of buying repossessed homes at knock-down prices, after a US scheme left dozens of UK and European backers with derelict and untenanted properties – and thousands of dollars of additional costs.

Three years ago, property investment firms were enthusiastically promoting schemes to buy repossessed homes in the US cities of Detroit, Atlanta and Florida – with prospective net yields as high as 16 per cent.


Their message was simple: repossessed homes in the US, known as “foreclosures” could be picked up for a fraction of their value, due to the financial crisis and high levels of unemployment, but would offer high returns if they were refurbished and rented out. Buyers also stood to achieve significant capital gains as the US housing market recovered.

One scheme marketed by Assetz International, a well-known property company in the UK, was promoted as a “ground-breaking opportunity”. Its brochure stated that investors would see a “superb” return for a minimal cash investment, adding: “you will not find such an investment opportunity anywhere in Europe at the moment”.

The Assetz scheme offered buyers an all-inclusive investment: pay a lump-sum of typically $45,000-50,000 to secure a property, have it fully refurbished, and cover all legal fees and property transaction costs. Investors were told that the properties would be rented by tenants through a government-backed scheme within 90 days.

But dozens of investors who bought repossessed property in Detroit – through Assetz and other UK firms such as Experience International and Axis Property Investment – have found themselves stuck with properties that have neither been refurbished or tenanted, and which are now incurring ongoing costs. Their properties have also fallen further in value – prices in Detroit were down another 4.2 per cent between January 2010 to January 2012, according to the S&P/Case Shiller House Price Index.

Adrienne Cullen and her partner Peter Cluskey, a UK couple who live in the Netherlands, bought three Detroit houses for $140,000 through Assetz International in July 2010. “It was being sold to us as a hands-off investment,” explains Cullen. “We knew there were properties available for less, as we did our research, but we thought we were buying security.”

Cont....

Source
 
Disappointed.
MyUSA was the original driver for this but the others of their ilk were given an equal serve.
A good start but much left to be said. FWIW my interview ran 40+ minutes and barely touched on the subjects shown. Emma171's went double that.
Better than nothing, but I would put it as nothing more than a good start on the bad guys...

Goodbye post +1
 
Disappointed.
MyUSA was the original driver for this but the others of their ilk were given an equal serve.
A good start but much left to be said. FWIW my interview ran 40+ minutes and barely touched on the subjects shown. Emma171's went double that.
Better than nothing, but I would put it as nothing more than a good start on the bad guys...

Goodbye post +1

I saw the ABC TV story just now on the American property scam and interviews given by Emma and yourself. It is another reminder on the risk of buying US properties through LLC structures which limits legal recourse for any redress. Thanks for making an effort of helping potential investors avoid the scam artists. :)

Some SS forumers have invested in the US with feedback of mixed outcomes.
 
Hat's off to you Jeremy!
It's very easy to look the other way when we see the wrong thing being done so I'm sure many out there will appreciate the heads up you have given them.
Continue to be outspoken as you may never know just how many families you helped avoid make a fatal financial decision..

cheers

B.D
 
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