AFMC and Stamford Lyon Investments



From: Giovanni T

Hi all...
I am new to this forum as I only discovered it while looking for info on Australian Financial Management Corporation and Stamford Lyon.

We have been approached by a 3rd party promoting these 2 organizations touting the benefits of -ve gearing and how affordable it is. The only problem is I live in Adelaide and they want to fly us somewhere on the east coast, wherever is the "most suitable" for "our" financial situation.

This subject has been touched very slightly in an old post but has been unable to uncover any real info.

Has anyone heard of these guys, had experience with them or been burnt by them.

I don't want to be another statistic, lining their pockets with my money...

Cheers for any thoughts
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Reply: 1
From: Dave :)

Hi Giovanni,

I went to a seminar by Stamford Lyon a fortnight ago. What a waste. It
was THE worst I've ever been to - bar none.

They are 2nd and 3rd tier marketers who promote negative gearing only.
They see tax deductions as THE most important ingredient in the IP mix.
They'll ramble on for 1 hour about various (outdated) statistics, and
then, depending on where you live, tell you the boom is about to happen
on the OPPOSITE side of the country. (I swear, I could've thrown my
clipboard at the presenter that night)

I had about 20 questions to fire off at the presenter - they wouldn't
let me ask even one. Questions were limited to one on one, after the
seminar was over. I was furious for having my time wasted, and wanted
to rip into their honesty and their methods in front of the whole

I'm not exaggerating - I learned nothing. Except for the
re-confirmation that there are more and more parasites feeding on
people's fears and lack of knowledge than ever before. Don't bother,
Giovanni. I could have stood up and done a better job than these guys,
and that's saying something! :)

You'll learn far more by speaking to others who have done what you're
trying to do, and by reading some of the posts in this forum.


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Reply: 1.1
From: Paul Zagoridis

Ciao Giovanni

(Dave :) replied while I was composing this so I'd run away from these companies if I were you. The following might be useful anyway as is talks about general rules)

I have no experience with these two companies and cannot comment on them specifically. But that isn't relevant as the names and promoters of such investments are constantly changing so you can never get a fix on them.

It costs money to fly two people somewhere, the only way it makes sense in the sales process is if you meet with their financier and a solicitor on the trip and sing on the spot. Ask them if they'll pay for the trip if you refuse to sign on the day(!).

Also Adelaide prices are not astronomical like Sydney and Melbourne (sure some houses suburbs are expensive). So it doesn't make sense to me why they'd want to fly you interstate unless they're trying to unload specific developments. That introduces the whole area of two tier marketing and/or extra commissions from developers.

Thirdly the cost of acquiring your lead (telemarketing or otherwise) must be factored into their numbers. Especially if someone visited you in your home. Those guys have to convert a percentage of prospects to pay their rent. Ask them to disclose in writing all commissions and fees they earn from your purchase.

If you have equity in your own home and have absolutely no time to make your own enquiries, then a marketing company may help you get into a long term buy. However I'd probably approach one of the flippers in this forum once you've gotten to know them.


Paul Zagoridis
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Reply: 1.1.1
From: Steve Cockrane

Hi Giovanni,

Like the other two responses to your posts I'd advise your friend to run a mile. I worked in Brisbane for a while in the mortgage business and know these 2nd tier marketers well. One company I know of spends over $5million a year with a travel agent paying for airfares. (Where do they get the money for that?) Often the banks in Queensland will not lend in the areas these guys operate (You gotta ask yourself why?) So they will use banks like the Bank of Adelaide. One of the mortgage originators who works with these guys very closely will put any properties that go into default back into the pool to be resold to another sucker. Its a never ending no lose situation for these guys. Some other developers sell properties with a 12 month rental guarantee, one I know of rents these properties to housing commission tenants with the Dept of Housing subsidising the rent. Then guess what happens in twelve months? The developer offers the tenant a knew house to live in in the same suburb so they move. The investor is left with a property without a tenant and it will remain vacant for quite some time unless they dramatically drop the rent. These are just some of the scams I became aware of in my 8 mths in Brisbane I'm sure there are more. The money program has reported on this a number of times.
So do your friend a favour tell them to keep away invest in their own back yard where they are familiar with the valuations and can keep an eye on it. Why buy a property 2500kms away? Also tell them a tax deduction is always the wrong reason to take on an investment. Why spend a dollar just to get back 50 cents?

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From: See Change

I got one good thing out of my visit to Stamfords seminal and "free financial assessment" .

A free copy of Jan somers " Building Wealth story by story"

Careful investing see change
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