Ipga???

[Frankthetank77]

Hey there,

first time posting so be gentle. I was recently visited by an advisor for Investment property group Australia, his system and proposal seems to all stack up. Its early days yet just wondering if anyone can give me some insight about ipg please??


Cheers frank

 

[Brady]

Systems and proposals?

What are they offering?

Do they sell property / guide you to buy new property in there 'elite' areas that have been carefully selected for high growth? If so run and run fast

 

[BuildingBlocks]

Without knowing what this company does...

I would be surprised if they can teach you anything that you can't learn on here and from free research.

They may be able to offer more hand holding, but it will cost you in one way or another.

Read a few books and sit on here for a couple of months reading and go in with your eyes open. Or by that time you may work out that doing it yourself without the help of a property advising/buying group isn't that difficult.

Edit: Had a look at their website and it doesn't really tell you much at all about the company or what they do other than general statements that they will help you along the way with their expert research etc. Everything just leads to a sign up form.

 

[Experimentee]

I was also recently visited by a representative from IPGA.

Basically, they offer a service where they research the best areas around Australia to buy into, and sell you house and land packages in the areas they believe will provide high capital growth within the next few years. You pay them a fixed price which includes the land, and the cost of building a house on the land, and they take a small percentage of this fixed price which is something like an agent's commission. They provide their own broker, etc, and once the property is bought then they assist you with the property management.

I was shown a table where they listed all the costs, and the taxation returns for each income bracket, showing that it would only end up costing about $50 a week once tax benefits are taken into account.

What they were saying seemed to make sense, but I would also appreciate opinions.

 

[Scott No Mates]

What is your hand doing in my wallet?

 

[alexlee]

his system and proposal seems to all stack up.

You're basing this on what?

 

[underdev]

I was also recently visited by a representative from IPGA.

Basically, they offer a service where they research the best areas around Australia to buy into, and sell you house and land packages in the areas they believe will provide high capital growth within the next few years. You pay them a fixed price which includes the land, and the cost of building a house on the land, and they take a small percentage of this fixed price which is something like an agent's commission. They provide their own broker, etc, and once the property is bought then they assist you with the property management.

I was shown a table where they listed all the costs, and the taxation returns for each income bracket, showing that it would only end up costing about $50 a week once tax benefits are taken into account.

What they were saying seemed to make sense, but I would also appreciate opinions.

Experimentee for your own sake please do some extra research, this is a classic formula and generally does not bode too well for the investor.

Read some articles by Neil Jenman like this http://www.jenman.com.au/news_question.php?id=264

 

[Experimentee]

Experimentee for your own sake please do some extra research, this is a classic formula and generally does not bode too well for the investor.

Read some articles by Neil Jenman like this http://www.jenman.com.au/news_question.php?id=264

Thanks for that. Although it seems that the person who answered asserted it was a scam and they were being ripped off by about $50,000 a property, without any reasons given for why it is a scam and how this scam works, or how they came up with the figure of $50,000. Not very helpful in my opinion.

Interesting that the person who asked the question said they had requested a printout of the figures but weren't provided with it. At the end of our meeting with this IPGA representative about a week or two ago, we requested that the figures be emailed to us, but I haven't received anything yet.

 

[Brady]

Run & Run fast they are just facey salesman.

Went over to my partner parents place last week and they had a guest over, turns out was a investment property company... turns out they only had properties in SEQ brand new H & L that was selected due to high growth.

Wake up people these people are just salesman out to make a buck.

 

[Nattl3s]

Thanks for that. Although it seems that the person who answered asserted it was a scam and they were being ripped off by about $50,000 a property, without any reasons given for why it is a scam and how this scam works, or how they came up with the figure of $50,000. Not very helpful in my opinion

Hi Frank

As others suggest, due diligence. Heres why:

Im not a property guru, there are plenty on this forum with way more experience. A workmate bought an investment property a few years ago with a property investment group. Don't know which one. After a year of owning it she found out i had a IP and we got talking because she had major problems renting it and wanted to sell but it wasn't worth what she paid for it.

After the discussion it was my feeling that she had paid too much for her townhouse in comparison to the surrounding properties ie $200K instead of $170K (immediate unseen $30K loss due to lack of DD) The investment group had bought/built a large estate/estates of townhouses so they used value of these properties as the comparison in their sales pitch but surrounding townhouses in the local suburbs around that were not theirs were selling for a lot less. The investment group had a "guaranteed rent for a year" promise. So this was the rent quoted in the sales pitch. In her case they said ie $200K townhouse $250wk rent etc. I think they probably got the tenants in for a year paying $150wk and paid her the difference (obviously im just surmising what happened). When the first year ended was when her trouble began. There were so many townhouses in her complex and the surrounding area they had to eventually drop the rent dramatically after months of vacancy. The place was costing them a lot. They wanted to sell. Everyone in the same boat though so the property value had dropped dramatically as well as the place being overvalued in the first place.
If she could just afford the place based on the original figures and rent, then with reduced rent they are forced to consider selling she could end up losing a lot of money on the actual sale not to mention the cost of selling. They paid 30K too much originally, too many other people now selling as well, so forced to sell for $160K and then selling costs - $50K loss overall
Don't know what happened as i have moved on but hopefully she hung on. At some point i guess you could break even but it would take years to claw back the losses.

Cheers nat

 

[WASP]

Hey there,

first time posting so be gentle. I was recently visited by an advisor for Investment property group Australia, his system and proposal seems to all stack up. Its early days yet just wondering if anyone can give me some insight about ipg please??

Cheers frank

Recently visited?

Did they just show up on the doorstep?

 

[redwing]

Hey there,

first time posting so be gentle. I was recently visited by an advisor for Investment property group Australia, his system and proposal seems to all stack up. Its early days yet just wondering if anyone can give me some insight about ipg please??


Cheers frank

Mmmm Beware the Salesman in Advisors clothing Frank

Are you getting advice or are you getting a salespitch, how is the advisor/salesperson remunerated? A salesman on commission is like a hungry lion surveying the veldt for prey, eating that juicy antelope is just his survival instincts kicking in, nothing personal against the antelope, he never wronged him, the hungry lion just got close enough to attack and run it down when out hunting for food. This is what drives a salesperson - hunger, they don't eat (or get paid) unless you buy

Someday's its slim pickings and they go hungry, other days its a smorgasbord

 

[thatbum]

- Overpay for property
- Apply historic median growth figures to over-inflated purchase price
- Apply depreciation and other tax "benefits" to over-inflated purchase price

...then tout imaginary estimated profit!

I should start my own IP advisory company.

 

[Frankthetank77]

More detail

I contacted ipg through an ad on Facebook. The system is they have a property research team, that look for land/suburbs with growth potential and they sell you above average(I.e. price range of $380k to $430k) house and land packages in these areas. The salesman/advisor said the will provide me independant assistance with finance, ie restructuring my mortgage and finance for the investment property, insurance and property management as well as solicitors and accountant. However I am free to choose my own solicitor and accountant.
Their sales pitch is, they want to sell you property with growth so you keep coming back and purchase more house and land packages, with the equity created in your previous purchases.
The advisor/salesman is coming back on Monday, with their advice on restucturing my finance for my mortgage and my 2 rentals, and the area of their high growth house and land package.

 

[Connolly]

Hey Frank,

The facts-

Over inflated purchase price- rule one do not pay more than what the property is worth
Inflated rental numbers to make projections look better meaning more heavily negative gearing on settlement.
Sales spiel is out of a can, they are taught what to say. Scary scary notion when looking to unload 300k.

Do your own research, spend a few months learning from the forum and asking questions. Establish your own strategy and pull the trigger.

An easy mantra- if an IP company is a one stop shop then run for the hills.

Plenty of guys with integrity that have been in the game for a long time on this forum. Seek the council of those!

 

[BuildingBlocks]

And of course their research is only ever going to point to places where they were able to purchase and develop.

The "help with finance" is just another area where they are taking commission.

If you aren't confident in finding a place without their help, then I would suggest to also seek independent advice and valuations to save yourself.

However it does sound as though you may already be looking on with rose colored glasses, so it may be too late

 

[Colin Rice]

This is what I predict will happen if you proceed;

1. They will get an in house broker to asses your eligibility for finance.

2. Broker will check if you have equity in existing property.

3. Broker will the arrange finance cross collaterlising your PPOR more than likely, with the proposed IP.

4. IP will come in under value by circa 10%. You will not know as broker will not show you the vals or in most cases it will be OTP which is a whole other story.

5. Bank will look at combined value of both properties offered as security and if enough will sign off the deal taking equity from PPOR to make up the shortfall.

6. You will end up with a property that is worth 40k less than you paid for it and may struggle to get a tenant depending on the local market.

The 40k from existing equity in your property will equate the comms payable to all parties with there hand in the trough.

Seen it to many times and in some cases has led to financial ruin.

IMO it is legalised theft with the property company, bank and broker all playing their devious part.

To be fair have seen it work well to in a few deals I have written. The valuations are always disclosed to client and as a result more than a few have walked away from the deal.

 

[Frankthetank77]

I appreciate those who took the time to respond to my questions, and it have been answered answered quite clearly for me. I still meet tomorrow with ipg to see where they advised me to invest. Mainly because I am and probably will always be confused why people will go to such great lengths to dud people out of their money, other than help them actually create wealth and a better life...

 

[Colin Rice]

Mainly because I am and probably will always be confused why people will go to such great lengths to dud people out of their money, other than help them actually create wealth and a better life...

Ahh to make (steal) 30-40k from you.

They will justify why they do what they do in their minds but the figures don't lie.

Dont cross collaterlise and insist on seeing the bank valuations and/or get independent ones done.

Please don't use their recommended broker as you will more than likely get stitched.

Rolf Latham is up your neck of the woods and a regular poster to this forum and is a font of knowledge on all things finance. Please get a second opinion from him or one of the other half dozen brokers that post on here with good track records from other forum members who have used their services. I am more than happy to give you one as well.

All the best.

 

[Frankthetank77]

Thanks Colin, you where right. Except it was more like a $50k to $80k shortfall. I have asked for bank valuations and haven't heard back from the "advisor".

A positive to come from this is, I found this forum, which I have been reading regularly. Also I have purchased the book building wealth, can you or anyone recommend other books to read on property investing?