Pearce kingdom collapses

Ian (WA)

Ian (WA)

Evening All,

On front page of Adelaide Advertiser today......

http://www.news.com.au/adelaidenow/story/0,22606,23262029-5006301,00.html

You make up your own mind, but it would seem too much, too quickly, poor decisions.......dominos, or houses of cards???

My mortgage broker said to me early last year (just after I bought CJPs book "Real Estate Cash") to steer clear of her two storey flat renos as they were way over priced and to "watch this space" as there were strong vibes in prominent RE circles that all was not well with her financials.

But like all moguls I would suggest they'd have a bit stashed away in a web of comapnies and trusts.

Cheers, Ian.
 
I just put a post in the coffee lounge about Cathy Jane Pearce.
How pathetic can one get.
Lets hope they are out of the industry, as I am sure they are an embarrassment to others that have made it big time.
 
That report is a bit confusing. Says: "BRW reported Mrs Pearce as being worth $19 million in 2003, and Mr Pearce sold his 33 real estate offices to Century 21 in a multimillion-dollar deal in 1998."

Then this: "But things changed from 2005 as properties failed to sell quickly and the sale of The Myrtles fell through. The Pearces lost $2.8 million when the buyer defaulted on a $1.7 million loan from the Pearces, on which they incurred additional costs."

Then: ""They would be sitting in the Bahamas having cocktails . . . and it is as simple as that." Mrs Pearce said Brock Harcourts – or its predecessor Brock Real Estate – appraised properties in six projects as being worth $19.977 million, but they only sold for $16.579 million.

This $3.398 million difference was the reason for financial losses on the projects, Mr Pearce said. "

The actual losses do not seem to tally up anywhere near to the wealth they had in 2003. Maybe the lawyers are the rich ones?
 
Maybe they have quite a bit put away in trusts, offshore accounts, mums name, whatever. In fact not maybe. I'd say more than likely.
 
Posing in the Sunday Mail again

And they are in the Sunday Mail again today. With a false pose again. I don't believe it. Will someone pls ring them, and tell them how they are becoming the biggest joke in my household, and my friends, on SS, and wait until tomorrow and I get on my to Work Property Invesment Forum.
Michaal Yardney, pls ring them, and tell them to stop embarrasing your industry.
 
I remember listening to a Success CD last year where Cathy was interviewed and thinking to my self ... what a successful idea she has started.

Looks like she should have stuck to the core business and the buying criteria she had established as a successful model and not let the fame go to her head ... and start increasing the potential return which as we know increases the possible risk
 
Even if you assume there's no fraud, it's a common story, surely. Person does well at a certain business, ramps up operations, overextends and loses control of the cashflow. The businessperson hires too many people, rents a flashy office, and their personal spending goes out of control as well. They might pay themselves too much out of the company account and spend it on toys. Then when a project is delayed or whatever, their cashflow doesn't meet requirements and the toys can't be sold easily.

It's just because she's well known and wrote a book. This stuff happens all the time. What's the big surprise?
Alex
 
Alex,

I find that I am agreeing with you yet again! ;)

I agree that slow and steady is best. Trouble with people is even though they have a tried and tested method they push the boundaries and then a small hiccup brings everything down.

In the current climate, particularly in relation to properties one needs to manage risk and cashflow religiously. Otherwise.....there is going to be a rude shock!

Just look at some of the SS posts to see which individuals have had a case of "irrational exhurberence" (Alan Greenspan speak) catching up to them.

No surprises....but always happens....human nature I suppose. :D

alexlee said:
Even if you assume there's no fraud, it's a common story, surely. Person does well at a certain business, ramps up operations, overextends and loses control of the cashflow. The businessperson hires too many people, rents a flashy office, and their personal spending goes out of control as well. They might pay themselves too much out of the company account and spend it on toys. Then when a project is delayed or whatever, their cashflow doesn't meet requirements and the toys can't be sold easily.

It's just because she's well known and wrote a book. This stuff happens all the time. What's the big surprise?
Alex
Click to expand...
 
Cathy Pearce

I'd like to agree with Alex.... This sort of thing happens to people in business all the time. Is it because Adelaide media is so pathetic that they couldnt find something positive abt our state to write that they had to dig up the Cathy Jayne chestnut? From an outsiders perspective, its very easy to pass judgement on other peoples misfortunes & the supposed reasons why such fraudulent behaviour may have occured.... here's my thoughts...

In this whole fiasco there are two important things to keep in mind... 1/ all your comments are based on media writeup in one paper town rags like the Sunday Mail quoting two bit reporters who snuck onto private property to snap a photo of cathy without permission & invading her private space.... since when have we ever been able to believe anything the media writes? It seems a little unproductive to your own investment potential to be passing judgement on how someone looks or how big they are... what has that got to do with property investment skills & experience.

2/ Given that many of you are passing judgement due to what you have read, you should also know that the many quotes over the years by the papers who couldnt wait to hoist her up on a pedistall as a young & stunning success investor, never quoted true figures or cared to find out the proper details from the very beginning. The longer the time & stories go by the bigger the chinese whispers... Now the papers cant wait to crucify her. Dragging Myles daughter thru the mud is a classic exampe of missinformation. The amount was more along the lines of $10,000 for interior design & project management for the unit group... not 1 million!!!

While not sticking up for some of her actions, or infact defending or agreeing with any behavior from the pearces, I believe the true story is in fact a promising business womanwho has truely found herself at the bottom of a very dark & muddy hole, with no one to show her how to get out or what to do when things went wrong. its a faclicy to say Myles has millions & they have everything stashed away. I know for a fact Cathy has worked to pay off trades & sell property to cover debts trying to avoid bankruptcy... simply for the stigma attached... nothing more.... If you add up moneies owed ( altho its none of our business) there is around $300,000 odd dollars being queried in real terms ( not newspaper terms) not worth 3 front page articles in my opinion.

While now driven away from Adelaide... seriously who'd come back given that illustrious welcome... & really with nothing left... needing to take stock & re-build... i'd like to suggest you all move on to more important things... what can you learn from a realestate developer who has had & lost it all so you dont make the same mistake.
Happy developing.
 
mira said:
While now driven away from Adelaide... seriously who'd come back given that illustrious welcome... & really with nothing left... needing to take stock & re-build... i'd like to suggest you all move on to more important things... what can you learn from a realestate developer who has had & lost it all so you dont make the same mistake.
Happy developing.
Click to expand...

Easy,
1. make sure the income is greater than the expenditure,
2. don't spend all the wealth on doodads;
3. reinvest most of it back into the business, and,
4. live off a comfortable, but modest salary as an employee of you company, and only spend the after tax dividends on the doodads.
 
Its obviously a tough time for Cathy Jayne Pearce and her husband. I guess they departed from the strategies that had made them so successful in the early days and got out of their depth.

I'm sad to see a few people posting on this forum who are enjoying their misfortune so much though. I'm surprised to see that attitude in what seems to be to be a generally positive community.

Entrepreneurship is all about having a go and taking risks.

I think the true test of someone's character is what they do when the chips are down. What interests me is seeing what comes next...
 
PropertyFi said:
Its obviously a tough time for Cathy Jayne Pearce and her husband. I guess they departed from the strategies that had made them so successful in the early days and got out of their depth.

I'm sad to see a few people posting on this forum who are enjoying their misfortune so much though. I'm surprised to see that attitude in what seems to be to be a generally positive community.

Entrepreneurship is all about having a go and taking risks.

I think the true test of someone's character is what they do when the chips are down. What interests me is seeing what comes next...
Click to expand...

I wholeheartedly agree Fi Well Said!

Average or Poor people who are just one pay cheque away from being bankrupt get miss guided and lose money alot more often and in higher percentages than their total net worth, yet they don't get anywhere near the amount of slandering as ones who have actually achieved something.

I know how difficult it is to build up one business and how long it takes to build a portfolio of 11 properties because that's where I am at currently. However, I certainly DO NOT have the experience to criticise people who have achieved more than I have and would not even know where to begin if I was asked to give a recommendation.

Anything other than a recommendation (how to do it better based on your life experience) is not really helpful to anyone!
 
Positivity only when it suits Fi.

CJP seems the sort of person who will rise a gain and be smarter and wealthier next time. It's usually the case with true entrepreneurs, as she seems to be. It would be pretty hard for her to go and get a 9-5 job.

Property investing is easy peasy,thats why it usually takes so long to make substantial money from it.

A huge majority of property investors here are in a 9-5 job and don't understand the hard work, guts and risks involved in building a large business or nay sort of business from scratch.

Nothing wrong with that in itself but shouldn't criticise unless they have done/can do similar.

And theres nothing at all wrong with failure, but there's certainly something wrong with criticising from a safe as house position while not trying. Heres food for thought:

"Truly successful people fail more often than non successful people"




PropertyFi said:
I'm sad to see a few people posting on this forum who are enjoying their misfortune so much though. I'm surprised to see that attitude in what seems to be to be a generally positive community.
Click to expand...
 
Cathy Jayne Replies

Hi , I have just read the blogs in response to my so called demise . I am happy to share with anyone on the investment forum my experiences . I was suprised by some of the comments and delighted at some of the more positive and enlightened responses . FTR , I made a choice to move from Adelaide for lifestyle and to spend time with my newborn and unexpected but welcolme thrid child . There was no demise , no big downfall ( only in the eyes of the media ) only a woman who had achieved what she wanted after over 3000 renovations was bored with my sucess and wanted to simply speand time with my husband and children . I was also commercially and sexually harrassed by my business partner as well as stalked by him and was the victim of a house invasion wherby I was held at knife point . Of course this was not all reported but it led me to want more in my life . Now I can have my property investing and a good family life too , and thats no fraud !! Cathy Jayne Pearce
 
Thanks for sharing Cathy, your descisions are nobody's business and it's sad to see how newspapers put the average person in a judge's seat for everyone else's life. I think there is only one use for newspapers, they are great when you are out camping and run out of toilet paper but apart from that I would not even waste a single minute on them.

I truly admire what you have done and wish you well for the future.
 
Hello CJ

I read your book - the yellow one. It had a great idea about selling the scooter/moped with the unit and always getting your price. Now that's smart. Put more of your ideas down on paper. write another book. I know I would buy it. Glad to hear you on the forum. You should contribute more often. I guess people like to hear the other side of the coin.

congrats on the third child.

Thanks
Aaron
 
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