Property Know How Club

[Peter Parker]

I believe that I offer a club run I might add by the members and people learn from the experience where is the harm?

You're right; there might not be much harm.

Except the risk of people losing their savings/home/marriage if their investments go bad.

That's all. No biggie.

Then there's this 'club' thing.

We're obviously not talking about the local Rotary/Lions/CWA, which operate according to the best traditions of Aussie volunteerism and community service.

Members of the above established organisations are generally aware of things like:

Whether it is a non-profit incorporated association (or a branch of same) registered with the appropriate government agency?

Whether it has a constitution?

Whether it has a committee and officebearers chosen from and by the members.

Whether members can vote and nominate at regular elections.

Whether there are processes for committee members to declare conflicts of interest with their personal business dealings and exclude themselves from certain decisions.

The above is generally assumed to exist in associations such as the above. They are all what we generally understand as 'clubs', with all the associated connotations of service, non-profit and altruism.

Unfortunately there is precedent for words like 'institute' or 'club' to be misused for selfish gain.

The effect is much like printing money you don't have; language is debased, communication becomes less clear and trust is eroded. Language, not money, is the currency of shonks and charlatans.

In extreme cases a minor misunderstanding over a word or meaning can lead to bad decisions being made and people losing their own home. Not all have gained through their association with the National Investment Institute or Investors Club, for example. In at least a proportion of cases 'respectable' terms like 'Institute' or (falsely) friendly terms like 'club' have influenced some people's decisions.

Which gets back to your so-called 'club'.

Are you really non-commercial altruists in it to provide a service with no thought of recompense? Or is it merely a funnel or front to channel business to favoured associates?

There's an honourable place for both in a free society. However they need to be seperate so people know where they stand. There's a million miles between Apex and Amway and most people's reaction to the two organisations would accordingly differ. The avoidance of confusing terms is essential, especially when considering what to call an organisation or activity.

If you're selling services (or referring clients to people that do) why not say straight out that's what you do rather than using weasel words like 'club'? Unless of course your target market is illiterates for whom correct language use is unimportant. In which case the above can be ignored.

 

[Nigel Kibel]

Again as I have already mentioned one of the main ideas is to teach people about doing due diligence. Now are you suggesting that people should not invest.
Now I am sure it does not matter what I say people will try and look for a reason to complain.

Now as I have said it will be a club. In each state it will have a different branch with property investors running the state clubs. We will have guest speakers, not people selling products and my main goal is to educate people about how to buy.

The main reason people lose money is because they do not do enough due diligence. If people take the time and trouble to research what they are doing then they are unlikely to make mistakes

 

[Peter Parker]

Said former NSW premier Jack Lang "In the race of life, always back self-interest - at least you know it's trying''

Now as I have said it will be a club. In each state it will have a different branch with property investors running the state clubs.

Will these people be volunteers or receive payment?

If the former, why would they?

If the latter, how?

Eg a commission based on the number of clients referred to allied mortgage brokers/developers/buyers agents?

Could this constitute a additonal passive income stream for them?

And within each 'club' (or 'cell') is there a committee, members of which would also get a cut - but smaller?

 

[Nigel Kibel]

Firstly they are all people who are investors.
I have already said that if people use services such as a buyers advocacy then yes fees would apply and yes however was running the clubs would receive a small amount of commission.

But we will not have sell speakers as such. So if a person is talking at a meeting it is about providing education, not about selling a course.

Any fees or commissions will be disclosed. Many of the people who will run the clubs invest or partner with us on either development projects in Australia or Apartment complexes in America. The idea is to provide an education club that will partner to create opportunities. That is quite different than flogging properties to people

 

[Rixter]

This is sounding more like the TIC every post from Nigel. Just in opposition to TIC.

 

[Nigel Kibel]

TIC mainly sells off the plan property.

The Property Know How Club is mainly about education and will offer some opportunities which will mainly be partnerships.

I do understand why people are cynical however I am asking people to be involved.

This is not going to be established to just promote and sell property. I feel that there is a need to education.

 

[Peter Parker]

The Property Know How Club is mainly about education and will offer some opportunities which will mainly be partnerships.

There's education and there's education.

Good unbiased education reduces risk.

Bad education can actually be worse than no education, especially if it's the rah rah salesmanship type that gives false confidence.

Several risk factors appear in this thread and the website referred to, namely:

[ ] Development projects
[ ] Overseas property purchases
[ ] Partnerships
[ ] 'Education' by biased people with vested interests on commissions
[ ] The 'club' name and structures which due to their 'social' rather than 'business' setting encourages people to lower their guard

Whereas there are certain activities that lower risks, eg

[ ] Buying reasonably priced established houses and units in regular suburbs and large regional centres
[ ] Sourcing needed services (such as finance and legal) seperately and independently
[ ] Using such services that get paid regardless of whether you choose property A or B (so they don't have a vested interest to push one)
[ ] Avoiding developments until advanced
[ ] Avoiding partnerships until advanced and well advised
[ ] Avoiding overseas purchases until advanced
[ ] Reading accounts from those without commercial interests to embellish (eg this forum)

Even playing blind mans bluff on an agent's window and buying a random property for the asking price (definitely not advised!) is likely to be lower risk than some schemes listed above.

 

[Nigel Kibel]

i do not let just anyone do the projects above

Take America as an example I have an independent US Accountant that lives in Australia. Before anyone buys in the states they see Donna first who advises them on structures and costs. I agree not everyone should do advanced things

However consider development we only buy sites that are permitted and the people who do the project management work are currently involved in a 40 million dollar project. So what is important is we have the right people with the experience that make sure that the projects go smoothly

In terms of education I agree bad education is a problem but my main focus is to teach people hoe to do thee due diligence. I would have thought that was good education

 

[alexlee]

Take America as an example I have an independent US Accountant that lives in Australia.

Independent in what sense? If they're getting lots of referrals from you that automatically taints their independence.

The conditions become (almost inevitably, and perhaps unavoidably for any organisation that both 'educates' and 'sells', regardless whether they're being paid for both activities) self-fulfilling: a particular organisation stresses that people should do their due diligence and select good investment projects, and of course that particular organisation follows all of their own rules and therefore all of their projects are good. If the 'education' part is free (though I'm generally suspicious of all 'paid' property courses), then in order to make money the incentive skews towards the bits that do make money. Nothing wrong with this, of course. If you sell something you should get paid for it. Even if the product is a property investment which must have some risk (the investor takes that risk). But to over-emphasise the 'education' component is disingenuous at best.

I'm not saying this thing is positive or negative. As investors we pay (indirectly or directly) mortgage brokers, real estate agents, accountants, solicitors, buyers agents, etc all the time. I've benefited greatly in the past from paying for such services. If I pay someone to buy a property that turns out to be a bad investment, that's my own fault.

However, anyone who has the incentive to sell you a particular product is going to spin the information in their favour. The consumer must realise this, and being told 'it's just for education' obscures this fact.

 

[Nigel Kibel]

Ok Although I understand your point. However I do not receive referral fees from the accountant. My view is before people even think of going to America they should first meet with an accountant, find out how much to set up an llc in the state they are buying in. What is it going to cost them to lodge a tax return both State and Federal in America.

In other words before they spend a cent they need to understand what there costs will be.

I want people to go into investing with there eyes open. I agree that many of the education groups are just flogging property. However as I have already said we are looking at teaching people how to do the due diligence.

 

[buster]

Ok Although I understand your point. However I do not receive referral fees from the accountant. My view is before people even think of going to America they should first meet with an accountant, find out how much to set up an llc in the state they are buying in. What is it going to cost them to lodge a tax return both State and Federal in America.

In other words before they spend a cent they need to understand what there costs will be.

I want people to go into investing with there eyes open. I agree that many of the education groups are just flogging property. However as I have already said we are looking at teaching people how to do the due diligence.

But you do receive mentoring fees, Right?

 

[Nigel Kibel]

Although I will offer mentoring its not a requirement. In other words people can attend meeting and get educated without having to commit to a Mentoring program. However a Mentoring program will be offered.

Again any services offered will be explained in detail.

 

[alexlee]

I want people to go into investing with there eyes open. I agree that many of the education groups are just flogging property. However as I have already said we are looking at teaching people how to do the due diligence.

As soon as you provide both 'education' and 'deal sourcing' services, you can't avoid conflict. To me, the right way is to tell people the conflicts exist, not bury them under 'my intentions are good'.

On this forum, any organisation like yours is going to be dissected. By experienced investors, though not necessarily experienced business people. In other words, if you disclosed everything that we investors considered 'right', you might not have a business model left. You have to decide whether it's worth it to advertise yourself here.

 

[Nigel Kibel]

Because you have a view does not mean you are right

My Experience tells me that education is very important. If people join our club and then go and do there own thing thats fine. However many people also need help especially when you are looking at off shore investing. Now in Australia if we provide a buyers advocacy service how is that a problem. The buyers advocate represent the purchaser we are not just selling off the plan property.

In my opinion buying in the United States is a lot harder than people think. If we can point people in the right direction and help people buy well how is that a problem. We also suggest that if people want to invest in America they should go there and see the market for yourself

 

[MTR]

Although I will offer mentoring its not a requirement. In other words people can attend meeting and get educated without having to commit to a Mentoring program. However a Mentoring program will be offered.

Again any services offered will be explained in detail.

This is exactly what Steve McKnight and many others do.

Promote a free property education event and these happen all around Australia during the year. At the end of the evening they provide a list of rather expensive education packs. Its just a marketing exercise to promote SMc products. I am guessing that he makes more money out of this business than property investing

From what you have stated your model appears to be very similar.

I dont have a problem with this however lets call a spade a spade.

MTR

 

[alexlee]

Because you have a view does not mean you are right

Agreed. It's only my view, but I think it's a good idea for people to consider multiple views, not just yours.

My Experience tells me that education is very important. If people join our club and then go and do there own thing thats fine. However many people also need help especially when you are looking at off shore investing. Now in Australia if we provide a buyers advocacy service how is that a problem. The buyers advocate represent the purchaser we are not just selling off the plan property.

Fine. Say that's how you're making money. Don't bury it in the fine print under the 'my purpose is education' spiel. There are plenty of buyers agents on the forum. They state that their service is to find property in exchange for a fee. They build their credibility by sharing some of their knowledge here.

 

[Dazz]

Believe me this is a tough process to get right.

[snip]

I feel that if we can teach people even just one thing it will be how to do there (sp) own due diligence so they are less likely to lose money because of bad advice. Now if people spend more time on doing there (sp) own due diligence then they would be far less likely to make silly mistakes.

Ignoring the obvious spelling mistakes, it makes a mockery of your primary aim of encouraging people to do their own due diligence on the one hand and then on the other blindly asking them to believe you.

Your "club" Nigel looks, smells and feels just like The Investors Club way back in '95 when it first started. They had the very best of intentions as well in terms of education.....but over the years the commissions, the kickbacks, the Club lawyers, the Club settlement agents, the Club finance brokers, the Club property managers, the Club property inspectors, the Club researchers, the Club maintenance team, the Club pest inspectors, the Club heirachy with dripping commissions all the way down the line....right down to the novices up front speaking to the audience.....all focussed on one thing, making it as easy as possible for the investor so they didn't have to do anything.

Research - no need - our full time researchers have already done all the hard work for you. Where is the research material ready for your own due diligence ?? It's confidential and over in Brisbane - believe me - they are the best. Trust us, once you become a member and purchase a property off us, all of these services are free, or at heavily discounted prices, exclusive to Club members.

Your own lawyers want to inspect all of the documents ?? Umm, you don't quite sound the right fit for our Club. After everything we have spoken about and shown you in this 1 hour session, you still don't trust us ??

 

[Nigel Kibel]

Thats not how it will work at all

I encourage people to do there own due diligence. In fact if I make a recommendation I always tell people to check it out for themselves because its not my money its yours

As for people questioning me here I am answering your points.

 

[Peter Parker]

Thats not how it will work at all

Dazz is quite right; noble intentions are not enough.

If the structure's bad and the perverse incentives exist, you can bet your bottom dollar that it will be exploited. If not by you then by others.

I previously mentioned how voluntary non-profit clubs have checks, balances and processes like constitutions, elections and approval for expenditures to protect themselves and members' funds. Even if their assets are chickenfeed - eg a few thousand only.

Your "clubs" may or may not have these protections, and if they do then they may be oriented to protecting the "club" rather than clients' funds. Despite the millions of dollars and people's life futures potentially at stake.

There have been cases of rogue franchisees of real estate chains that act illegally, get caught and/or attract bad publicity. The franchisors have set things up so that if the heat gets too much they can strip a franchise from an agent principal or office.

Is your decentralised "club" structure similar? ie "clubs" headed by "investors" get in the business while you get some commission. Sounds great, makes you look big and spreads the risk.

And you might not necessarily be in a position to see everything that happens within each "club". One could even argue that not concerning oneself with minutae clears headspace for strategic thinking. Or, put another way, ignorance is bliss!

If one "club" plays up and gets taken to court by an aggrieved client, is the structure arranged so it's that "club" and not you who could be exposed? Similarly when it gets on Today Tonight, you can sound all concerned, say it's an isolated incident, claim to put in systems to prevent it, then cut loose the feral "club". All at minimal loss to yourself and life goes on.

 

[Nigel Kibel]

So what are you saying that anyone who charges for a service is a crook?

If a club provides free education including education that tells people to do there own research and due diligence and I tell me not to take my word on anything but to check it out for themselves how am I taking advantage of anyone?