Warning; Investors Club

[TurkeyBaster]

And by the way Yes some Financial Planners do recommend property to their clients and some even have a decent property portfolio themselves.

Well, Yes, that is so. You are jumping to the defense of your method of doing business and pointing out that not all FP's should be tarred with the same brush.

Exactly my point. Why is is so hard to accept that there may be members of TIC that have made some great purchases and some support members who mentor and help people just as carefully and as ethically as you do ?

 

[Nth Brisbanite]

you could have thrown a dart at a map Oz to get those sorts of returns 8 years ago though.

Agreed, but without their help I would never have got into property investing in the first place. They were the organisation that motivated and held my hand in the early stages of my investing.

By the way, I've never worked for TIC neither am I connected with them in any way. I'm just so thankful for TIC starting me off on my journey.

 

[Perp]

Whilst I have no control over what my organisation is called, nor my designation within it, I also do not think that, as an organisation, we ever try to hide the fact that we are there to sell our members a property and that we derive a benefit from doing that.

You don't control these things, and I'm not attacking you personally. But the fact is that TIC goes to great lengths to create the impression that they're something other than what they are.

Why is is so hard to accept that there may be members of TIC that have made some great purchases and some support members who mentor and help people just as carefully and as ethically as you do ?

I absolutely accept that, TurkeyBaster. I don't think you're unethical; I do think perhaps you've been brainwashed.

There are two fundamental problems (for me) with TIC:

1) They only recommend properties where the vendors are willing to pay 6% commission to TIC, which by definition means the property is about 4% over-priced. These vendors and their properties represent only a small portion of all properties for sale, thus TIC's recommendations are not based primarily on an assessment of the best investment for their "members".

2) As I said before, I don't like that TIC cultivates the impression that they're primarily there to help investors, and that this leads their members to at least partially abrogate responsibility for due diligence. The testimonials speak volumes:

"We would never have had the courage to go on buying properties if we had not had the support of the Club"

"After some soul searching and questioning of Club personnel they recognised that The Investors Club would provide them with all of the ongoing support and care they would require in order for them to achieve their financial independence.

Neville and Karen’s concerns ‘went out the window’ because the Club had Researchers who identified the best areas to invest in, could recommend mortgage professionals to set up their loans correctly and also a leasing coordinator to assist with tenant placement on an ongoing basis."

"It’s a real load off my mind knowing that the Researchers are experts in their field, and they know how to search the country to find the properties for us to purchase."

As you'll see from my earlier posts in this thread, I think people are entirely responsible for their own actions, but I also think that TIC encourages members to trust TIC, and makes it very easy for people to make investments that they'd never dream of making on their own.

Real estate agents at other properties stand to make a lot less money per property than TIC makes from its members, yet I can't imagine TIC members placing such trust in a real estate agent as they seem to place in TIC, and a lot of that is because TIC cultivates this collegial atmosphere.

Specifically, I object to the use of the words "club" and "free". Yes, I know about full disclosure etc, and I'm sure they don't lie. But TIC is not primarily a group of investors helping each other out (eg you being called a "support member"); it's a very expensive real estate agency, selling high-priced stock to generally not-very-savvy investors, whilst also getting commissions from a whole raft of affiliated service businesses, and having the unmitigated gall to tout these affiliates as "free services"!

It can be psychologically very hard to admit that you have been gullible, and forked over thousands of dollars to a business for the privilege of being a customer, and I think that explains a lot of the people who defend TIC.

 

[BoatBoy]

Specifically, I object to the use of the words "club" and "free". Yes, I know about full disclosure etc, and I'm sure they don't lie. But TIC is not primarily a group of investors helping each other out (eg you being called a "support member"); it's a very expensive real estate agency, selling high-priced stock to generally not-very-savvy investors, whilst also getting commissions from a whole raft of affiliated service businesses, and having the unmitigated gall to tout these affiliates as "free services"!

It can be psychologically very hard to admit that you have been gullible, and forked over thousands of dollars to a business for the privilege of being a customer, and I think that explains a lot of the people who defend TIC.

My thoughts exactly Tracey.

I seriously suspect a couple of my relations were "coerced" into TIC* with 2 properties that I vehemently opposed them buying as in my opinion, they were quite overpriced and in a big specy area.

Now they want out because, lo and behold, there's a lot of rental competition in this area and it now seems they paid to much.



(*There were numerous mention of "the club" and how it was all so easy, one stop shop like)

Dave

 

[Mary-Sue]

Neville and Karen’s concerns ‘went out the window’ because the Club had Researchers who identified the best areas to invest in, could recommend mortgage professionals to set up their loans correctly and also a leasing coordinator to assist with tenant placement on an ongoing basis."

"It’s a real load off my mind knowing that the Researchers are experts in their field, and they know how to search the country to find the properties for us to purchase."[/I]

....and if you've ever met these mythical beasts, the vaunted "IC Researchers", and sat down and had a detailed chat with them, specifically about what they have personally achieved in regards to generating wealth through property and more specifically their methods and selection criteria....you'll shudder in your boots.

Neville & Karen should be concerned.

 

[Xenia]

Oh Please!

 

[Rixter]

....and if you've ever met these mythical beasts, the vaunted "IC Researchers", and sat down and had a detailed chat with them, specifically about what they have personally achieved in regards to generating wealth through property and more specifically their methods and selection criteria....you'll shudder in your boots.

Mary-Sue,

I would be very interested to hear about your specific detailed chat (bar names of coarse) in relation to your experiences into the matter as you've stated?

If you could share with the forum it would me much appreciated.

 

[willair]

you'll shudder in your boots.

Mary Sue,still trying to understand what you said,i take it you had a talk too the"IC Researchers", and what they have done intheir investment life just have to ask what stands out in what they tol;d you,the good the bad and the rest,just keep in mind that rubbish is always rubbish,no matter what the market is doing,and that covers all markets,BTW-welcome to the fourm..
willair..imho..

 

[mickcur]

Why all the angst?

I have just read through the thread about the guy who wants to get out of a contract for a house he has purchased for $1.6m. There were some fantastic responses and support from forum members. These responses are from some of the same forum members on this thread putting down people for paying "too much" through TIC.

The way I see it, the drift of the other thread was, "don't worry if you paid too much...it's too hard to pick the exact market value...time will solve your problem...real estate is forgiving over the long term."

So why does that apply to a $1.6m self "due diligenced" purchase, but not to a purchase through TIC?

I'm not trying to support TIC...I haven't bought through them...Infact I bought a property through one the highly recommended QLD Buyers Agents from this board, and it's a REAL dud...but that's another story.

So what I'm trying to understand is the negativety towards TIC. Sure they have sold some duds, but lots of people wouldn't be where they are without their help. Remember, from the other thread...realestate is forgiving over the long term....

Michael

 

[Perp]

Hi Michael. I'd be one of the people you're referring to, so I'll answer.

I see no contradiction. I do think real estate is very forgiving, and those people who buy through TIC may very well do OK or even well out of their investment; my problem with TIC is not related to the quality of the investments.

My problem is with the organisation presenting itself as existing for the benefit of investors, and using trust-inducing words like "club" and "support member". And advertising "free" services... I mean "yippee - you mean I don't have to pay for the privilege of using a service which pays TIC commissions? What a bargain!"

 

[Gatoblanco]

Sounds very creepy; very much like a network marketing organisation *shudder* - there's an industry that really victimises the vulnerable. It's at least possible - even likely - that you'll make money out of property. I don't know anybody who's made money from network marketing, but I know quite a few people who have wasted loads of money and time, and jeopardised their personal relationships, chasing an elusive dream sold to them by slick network marketing promoters.

Of course they've been told from the get-go by the network marketing organisation that anybody who says that they can't make money out of it is just negative, or an unsuccessful loser. So it's psychologically very difficult to leave, because that would mean acknowledging (to themselves) that all the people who told them it was a scam were right. And 99% of people find it hard to admit to themselves that they've been conned. So they keep at it and at it, throwing good money after bad, desperately wanting to believe that success is just around the corner.

It's just bloody heart-breaking to watch.

That is a very interesting analysis. I would like to hear more sometime. I have always been interested in network marketing - not doing it but the stories associated with it.

 

[Ausprop]

I have just read through the thread about the guy who wants to get out of a contract for a house he has purchased for $1.6m. There were some fantastic responses and support from forum members. These responses are from some of the same forum members on this thread putting down people for paying "too much" through TIC.

The way I see it, the drift of the other thread was, "don't worry if you paid too much...it's too hard to pick the exact market value...time will solve your problem...real estate is forgiving over the long term."

So why does that apply to a $1.6m self "due diligenced" purchase, but not to a purchase through TIC?

I'm not trying to support TIC...I haven't bought through them...Infact I bought a property through one the highly recommended QLD Buyers Agents from this board, and it's a REAL dud...but that's another story.

So what I'm trying to understand is the negativety towards TIC. Sure they have sold some duds, but lots of people wouldn't be where they are without their help. Remember, from the other thread...realestate is forgiving over the long term....

Michael

but I can't imagine anyone telling the $1.6m guy to go out and do it again.

the negativity is quite simple - they purport to be being a club when in fact they are a highly organised real estate agency charging exhorbitant commissions. They have a huge conflict of interest. If they simply changed their name to 'the investors marketing group' or similar I couldn't care less what they sell or to who they sell it to. So to say it is ok for a company to go around misleading people because some individual bought a $1.6m property by mistake and is receiving help thru the process is a long stretch.

 

[Token Funder]

the negativity is quite simple - they purport to be being a club when in fact they are a highly organised real estate agency charging exhorbitant commissions. They have a huge conflict of interest. .

Succint and on point

 

[mickcur]

So to say it is ok for a company to go around misleading people because some individual bought a $1.6m property by mistake and is receiving help thru the process is a long stretch.

Take it easy! I never made a link between you guys helping the $1.6m man, and it being ok to mislead people.

I seriously suspect a couple of my relations were "coerced" into TIC* with 2 properties that I vehemently opposed them buying as in my opinion, they were quite overpriced and in a big specy area.

So was your advise to your relatives to hold onto their TIC property because it will work out ok given time, or to go and see a solicitor and sue them because they were mislead and deceived?

I'm not trying to stir the pot, I'm just intrigued by the 2 threads. Like others, I agree that given time, both purchase types will give a satisfactory result if mistakes have been made.

I do however, understand now that it's the way TIC sells properties that ticks(hehe) people on here off, rather than what they sell. Thanks for that.

Happy New Year,
Michael

 

[BoatBoy]

So was your advise to your relatives to hold onto their TIC property because it will work out ok given time, or to go and see a solicitor and sue them because they were mislead and deceived?

I gave them advice, they chose to ignore it, they are on their own, but I did suggest getting out of it, even at a loss and moving on if it was causing them grief.

Why would I advise seeing a soli? There's enough whiners out there as it is trying to palm the blame off on someone else for their actions and they are adult enough to realise they have no one to blame but themselves.

Dave

 

[TurkeyBaster]

There are two fundamental problems (for me) with TIC:

1) They only recommend properties where the vendors are willing to pay 6% commission to TIC, which by definition means the property is about 4% over-priced. These vendors and their properties represent only a small portion of all properties for sale, thus TIC's recommendations are not based primarily on an assessment of the best investment for their "member.

I do however, understand now that it's the way TIC sells properties that ticks(hehe) people on here off, rather than what they sell. Thanks for that.

Michael

Hi Tracey and Michael,

I've been out of touch for a few days, so interesting to read yours and others posts to my earlier comments.

The consensus of complaint seems to be centered around our method of doing business and how we represent ourselves.
I think I mentioned before that I have been involved with TIC for around 10 years and it was through their marketing material that I became interested in property in the first place, and for that I will be eternally grateful.
I did a lot of research and was invloved with other operations and bought my first IP through another organisation before going back to TIC to buy my next eight and have been involved as a support member for the past 3 years. I don't think that I am brainwashed, but then I would say that, wouldn't I ;-)

However, the quote above from Tracey, is one of the statements continually thrown up as a 'fact' about TIC that I object to and prompted me to burst into print.
Over the past 8 years, I have been involved with numerous TIC purchases (more than 40 that I have documented), both my own, and for my members, only some of which proceeded and many which did not. I can categorically state that the mythical 6% is exactly that, a myth. In over 90% of cases, the figure is around 4%. Rarely more, often a little less. But yes, certainly in at least one case that I am aware of, there was a figure of 6% shown, however, in some recent ones, less that 3%.

The figure of 2% is often quoted as a 'reasonable' figure and one that regular estate agents will charge. I just wonder if the many extra charges they can bill are included when these comparisons are made ? Do they include the advertising fees, the admin charges, the GST etc, which could inflate the final total costs involved ? IMO, it is a little like airlines or car hire companies advertsing low prices which, when all the bills have been paid, bear little or no relation the original quote. The TIC ‘commission’ is the only fee payable.

The other assumption made is that this %, whatever it may be, is actually added on to the price and therefore paid for by the purchaser.
This, of course, is not necessarily the case. The comparison should be between the contract prices of a TIC property and a non-TIC property of equivalent standard in the same area. My experience is that the contract prices of our properties are indeed comparable and can often be a lot less.

I think that I should also point out that in my experience, we rarely have 100% of any development for sale to our members. We rarely have sole agency rights and I have been gazumped myself on a couple of properties, so local agents and other organisations are also selling the same properties through their own networks. This obviously makes it pretty hard to overcharge, unless everyone is doing it.

 

[Perp]

I can categorically state that the mythical 6% is exactly that, a myth.

I hope you'll pardon my error, knowing that it comes from TIC's website:

"Q: What does the Club get out of this?
A: The maximum Club fee is 6% of the purchase price + GST."​

I acknowledge that this is a "maximum", but if they don't get this "mythical" 6%, why not cap fees at 4% or something, so that TIC can put 4% on their website. If it's true that they rarely get more than 4% anyway, then it would cost very little to change their policy accordingly, wouldn't it?

I still wouldn't like the fact that TIC create the false impression that they're on the purchaser's side of the transaction, but it'd be one less front on which they could be criticised.

 

[Token Funder]

The other assumption made is that this %, whatever it may be, is actually added on to the price and therefore paid for by the purchaser.
This, of course, is not necessarily the case.

With respect, weasel words.

Not necessarily or not actually the case.

There is no magic pudding.

 

[Peter Parker]

The consensus of complaint seems to be centered around our method of doing business and how we represent ourselves.

Others have discussed methods of doing business and commissions, so I'll only talk about 'how we represent ourselves'.

The first, and most important, way a business represents themselves to the public is through their name. Companies understand this - so they spend a lot of effort in naming and branding.

The distinguishing thing about 'The Investors Club', compared to almost any other real estate business is that, as others have alluded to, it's name is built on wordplay at best, and deceit at worst.

If it's name is built on a con to suck people in one can legitimately ask what other aspects of its operations might not be to the benefit of those so sucked.

A club can be defined as "A group of people organized for a common purpose, especially a group that meets regularly" http://www.blackstump.com.au/dictionary.htm

However this is an extremely broad definition. A workplace, school or church, for instance also comprises people brought together for a common purpose, but no one calls these 'clubs'.

The term club has many connotations that make it different from a workplace or business.

* Members pursue a particular common interest, sport or recreation in spare time
* Non-profit
* A high dependence on volunteer labour (though larger clubs do have paid staff as well)
* There may be social activities to promote fraternity between members, without other ulterior motives
* If a formal organisation it will often be an incorporated association where members have voting rights to elect office bearers (though some 'clubs' can actually be companies limited by guarantee, but they are generally still non-profit)

The term 'club' can also imply a informality, conviviality, mateship or sociability that is not expected nor present in employment relationships. Hence we're all less guarded when at a club with friends than in weighing up a business or investment proposition. There may be bonds through common interest that are not economically-based, unlike an employment or provider/customer relationship where payment is typically received in return for products or work.

Then there's the term 'investment club'. About 10 years ago Tim Hewatt wrote a book called 'The Investment Club'. This dealt with informal groups who got together to share hints and tips on investing (notably shares). By all reasonable definitions these groups were indeed clubs, with the lines blurring if money was pooled. The book was popular and the topic got a lot of media attention.

Hence we have two terms that carry significant meaning. 'club' for its voluntary, non-commercial and convivial nature, and 'investment club' as similar to the first, but with a common interest in investing.

Everyone knows what a club is. Everyone knows what a business is. There are many legitimate examples of both. But a 'club' TIC ain't. Continuing to pass a marketing business off as a club borders on deception (especially since it encourages a suspension of critical faculty) and leads thoughtful people to query what other corners might be cut.

 

[urban cowboy]

I hope you'll pardon my error, knowing that it comes from TIC's website:

"Q: What does the Club get out of this?
A: The maximum Club fee is 6% of the purchase price + GST."​

plus marketing and administration charges in some cases