All Topics / Help Needed! / Property investment company

Viewing 8 posts - 1 through 8 (of 8 total)
  • Profile photo of Bergerson33Bergerson33
    Participant
    @bergerson33
    Join Date: 2013
    Post Count: 2

    Hi,

    My partner and myself had a property investment company come to our home and took us through the general basics of property investment, they then organised to have us go to their office in the city for an obligation free meeting to see if we would be financially able to invest in property

    I attended a meeting with the company in Melbourne last week, I believe I may have made a terrible mistake.

    My partner and myself attended a 4 hour meeting where 2 guys went over our financial situation. They then proceeded to tell us about their company, what they do and show us things we can claim on tax etc.

    Then they took us through what they could do for us by sourcing out a few properties (only new properties and only within 15km's of the CBD) and will get back to us in a few weeks once they have sourced out properties. They said the properties would be in low vacancy rate areas, then go to town planning to see if any major developments are happening in the area.

    Once they have done that they take us out to the properties and we select one, they then handle the conveyancing (not the mortgage brokeing, or at least that hasn't been mentioned yet). They then cover landlord insurance for the first year. They also gave advise on our other finances like consolidating credit cards, car loans etc.

    Now here's where it gets embarrassing for me.

    At the end of this meeting, they asked us if we wanted to join and they would get straight to work. My partner and myself were quite excited by the whole thing so we agreed to sign up. The cost to sign up was $1000 up front and then another payment of $4000 in 45 days which they said we could claim on tax and could also have that amount put in to the loan when we purchase the home.

    After reading the contract we both signed up.

    Initially on reading the contract I took the understanding that the $1000 was just a deposit and if we walked out on the deal that we would lose that. But after reading over it again it looks as though we have to pay the remaining sum regardless of whether we go through with anything.

    After reading the contract over a few times I started to get a little nervous, so I Googled 'property investment companies' and 'property investment scams'.

    For 3 days straight I have been reading over scams, what to look out for, property companies selling houses for well over their value to increase commisions etc.

    Fair to say I haven't slept properly for 3 days, please understand I know I may have made a terrible mistake which will cost me a fair sum of money and I have learnt a massive lesson.

    What I want to ask is,

    What do I do from here?

    Are any of these companies not dodgy?

    Should I go and look at the homes they selected, choose one, then get it independantly valuated before commiting to buy?

    If it actually is a decent price, do we go ahead?

    If it is over priced do we cut our losses at 5K and run?

    Should we cut our losses now and run?

    Sorry for all the questions and thanks in advance for any help, I just don't know what to do. I would name the company but I don't know the legal side of naming companies on forums.

    Thanks again

    Profile photo of Heinz57Heinz57
    Participant
    @heinz57
    Join Date: 2012
    Post Count: 26

    Don't beat yourself up, plenty of people get caught by these slick professionals. Credit to you for working it out early. Now get yourself a lawyer to get you out of the contract and learn from your mistake.

    Profile photo of Bergerson33Bergerson33
    Participant
    @bergerson33
    Join Date: 2013
    Post Count: 2

    Thanks for the reply.

    Would lawyer costs go close to the money I'm going to lose anyway or would it be relativly cheap?

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    HI Bergerson

    Sorry to hear your first experience into Property Investing is to be caught up by some slick marketing firm. 

    I was down in Melbourne only last week seeing a couple of forumites who had been caught by a similar slick sales speil.

    Firstly i would suggest you have a quick look thru the Terms and Conditions of what you signed as it probably has some form of "cooling off" period.

    If so i suggest you write to them immediately advising them you wish to cancel the agreement and demanding a refund of any monies paid.

    If they refuse then to date you will have only lost $1000 and you can put that down to experience. In regards to the balance of the funds i am unsure how this was to be paid i.e credit card, cheque, direct debit etc. Without knowing this it is difficult to advice further.

    I would then suggest you get the quick opinion of a lawyer. Happy to point you in the direction of someone in Melbourne we use for our clients if you would like.

    Then sit down with someone who doesn't have an agenda or anything to sell and has trodden the path you want to go.

    Get yourself true independant advice on all aspects of property investing.

    Trust me we don't all charge an arm or a leg or do it for the money.

    Some of us actually do it because we enjoy helping people achieve their goals.

    What i would do is act quickly though as doing nothing might cause you further issues.

    Without seeing the agreement you signed it is difficult to comment further.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of Nigel KibelNigel Kibel
    Participant
    @nigel-kibel
    Join Date: 2005
    Post Count: 1,425

    The important think is that if they recommend a property to you do your own research. At least do a search on similar properties in the area to make sure that you are not paying well over retail price for the property. If you are still unsure you can pay to get a bank valuation which is not expensive. If is important to remember that you are dealing with businesses that are often making large commissions. You at least want to know that they are not paying more than the retail price.

    If you are really uncomfortable with who you are dealing with you may be better to loose $1000 that $100,000.

    Nigel Kibel | Property Know How
    http://propertyknowhow.com.au
    Email Me | Phone Me

    We have just launched a new website join our membership today

    Profile photo of EngeloRumoraEngeloRumora
    Participant
    @engelorumora
    Join Date: 2010
    Post Count: 618

    You are very fortunate for not proceeding further and actually buying a property as their margin your purchase would have been at least around $25,000.

    Thanks.

    EngeloRumora | Ohio Cashflow
    http://ohiocashflow.com/
    Email Me | Phone Me

    F@#$ THE REST WORK WITH OHIO CASHFLOW TO INVEST

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    Bergerson33 wrote:
    Hi,

    My partner and myself had a property investment company come to our home and took us through the general basics of property investment, they then organised to have us go to their office in the city for an obligation free meeting to see if we would be financially able to invest in property

    I attended a meeting with the company in Melbourne last week, I believe I may have made a terrible mistake.

    My partner and myself attended a 4 hour meeting where 2 guys went over our financial situation. They then proceeded to tell us about their company, what they do and show us things we can claim on tax etc.

    Then they took us through what they could do for us by sourcing out a few properties (only new properties and only within 15km's of the CBD) and will get back to us in a few weeks once they have sourced out properties. They said the properties would be in low vacancy rate areas, then go to town planning to see if any major developments are happening in the area.

    Once they have done that they take us out to the properties and we select one, they then handle the conveyancing (not the mortgage brokeing, or at least that hasn't been mentioned yet). They then cover landlord insurance for the first year. They also gave advise on our other finances like consolidating credit cards, car loans etc.

    Now here's where it gets embarrassing for me.

    At the end of this meeting, they asked us if we wanted to join and they would get straight to work. My partner and myself were quite excited by the whole thing so we agreed to sign up. The cost to sign up was $1000 up front and then another payment of $4000 in 45 days which they said we could claim on tax and could also have that amount put in to the loan when we purchase the home.

    After reading the contract we both signed up.

    Initially on reading the contract I took the understanding that the $1000 was just a deposit and if we walked out on the deal that we would lose that. But after reading over it again it looks as though we have to pay the remaining sum regardless of whether we go through with anything.

    After reading the contract over a few times I started to get a little nervous, so I Googled 'property investment companies' and 'property investment scams'.

    For 3 days straight I have been reading over scams, what to look out for, property companies selling houses for well over their value to increase commisions etc.

    Fair to say I haven't slept properly for 3 days, please understand I know I may have made a terrible mistake which will cost me a fair sum of money and I have learnt a massive lesson.

    What I want to ask is,

    What do I do from here?

    Are any of these companies not dodgy?

    Should I go and look at the homes they selected, choose one, then get it independantly valuated before commiting to buy?

    If it actually is a decent price, do we go ahead?

    If it is over priced do we cut our losses at 5K and run?

    Should we cut our losses now and run?

    Sorry for all the questions and thanks in advance for any help, I just don't know what to do. I would name the company but I don't know the legal side of naming companies on forums.

    Thanks again

    You could not claim that expense as a deduction as it relates to the future purchase of a property. At best it would only be claimable off the capital gains when the property is sold. at worse it will not be deductible at all.

    This contract you have entered into may have a cooling off period. I would suggest you quickly get legal advice and then immediately write to them (and keep records) saying you with to withdraw from the contract.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    Bergerson33 wrote:
    Thanks for the reply.

    Would lawyer costs go close to the money I'm going to lose anyway or would it be relativly cheap?

    Probably $300 to review the contract and write a letter for you (not my area, best to find someone local)

    After posting I read the rest of the thread and see RIchard had already said similar to me.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

Viewing 8 posts - 1 through 8 (of 8 total)

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