The comments in this post are my own opinions and have resulted from private email requests from various individuals (mainly newbies).
Words in bold and italics are from The Investors Club website…
According to a recent survey undertaken by a leading Australian independent market research company, two-thirds of members feel. The Investors Club is better than using a real estate agent.
Why?
No mention is made of who this leading Australian independent market research company is. I don’t think a couple of payed employees counts though. I would be interested in seeing this market research or at least knowing who this ‘independent’ research company is.
I am confused as to why not one employee, support member or member has stepped up to defend The Investors Club in a forum with many thousands of members. Surely there are some here who use their services???? Anyone???
Now I will look at “Why?”
10 REASONS WHY USING THE CLUB IS BETTER THAN A REAL ESTATE AGENT’?
1. By law Real estate agents are bound to protect and the vendor’s interest and not necessarily the investor.
A much easier response would be to state that The Investors Club is acting as a ‘buyer’s agent’. If they are not one, they must be the other. I am still yet to site any licences, qualifications or other supporting evidence that allows this ‘club’ to operate.
2. The Club works for the investor/member for life.
I am sure they will ‘work for the investor/member for life’ when they make so much money off them!!! I know I would for the money they are making.
Pretty much the same as number 1 but it looks better having ten reasons instead of 9.
3. Real estate agents will increase the price in a competitive market to the highest bidder.
This is very interesting even though it makes no real sense. How exactly can a real estate agent increase a price in a competitive market? How do you get the highest bidder at an auction to bid against themselves to increase the price? How to you get someone to pay more than the asking price for an advertised property?
In a competitive market, demand drives prices. The vendor sets a price and the real estate agent tries to get someone to pay it. Only the ‘VENDOR’ can increase a price.
4. The Club negotiates with the vendor to push the price down and provides a fair and equitable system to present the properties to the member without increasing the price.
There is that word again – ‘System’. The Investors Club, as required by law when acting as a Buyers Agent, negotiates on your behalf. This usually occurs once a property is identified and the buyer is notified. They discuss a suitable price and the agent goes and tries to make it happen.
My understanding of The Investors Club is that they try to convince buyers that the prices have already been negotiated down. I consider this to be total ‘hard-sell marketing’ especially when dealing with already over-inflated prices on off-the-plan properties.
Now if The Investors Club were willing to cut some of the commission received by the Club, the Area Managers and the Support Members, things would be a lot cheaper. Didn’t they say they cut out the middle man? Well, now there are three or four who take a cut! Sounds like a ‘fair and equitable SYSTEM’ to me.
5. Most real estate agents will only operate in their local area. Investors would have to deal with multiple agents in several areas or states to obtain a cross-section of properties in an investment portfolio.
It is important that an Agent does operate only in their local area. This provides them with specialist knowledge. Selling off-the-plan crap from around the country with no knowledge of local areas is of no benefit to anyone. It is much better to source buyers agents in each area you are looking at if you need help. At least you have someone to sue if you get ripped off.
My understanding of ‘support members’ are that they are individuals with one or two properties who have no required training or skills. I would not be putting my confidence in such an individual especially when the cost is a few hundred thousand dollars per property. Where is the due dilligence? Surely The Investors Club does not rely on the glossy marketing material from the developers trying to flog the off-the-plan properties. This would be irresponsible!
6. The Club operates in all areas and most states of Australia as well as New Zealand.
This just tells me that they are selling the same off-the-plan crap all over the place. Big deal! Multi-level marketing is a great thing when you don’t have shopfronts or offices to support. That hamburger place which can’t be mentioned is all over the place as well. That does not mean it is good for us. They are just great marketers!
7. Real estate agents will provide only a minimal description of the properties listed, leaving the investor to their own means to research investment property performance, rent return and historical information.
One works for the vendor and the other for the buyer. We know this. These 10 reasons are really being stretched!
8. The Club provides research documents plus independent written rent appraisals.
This sounds like an extension of reason 7. That does not say much for why anyone should use The Investors Club or this amazing ‘Independent’ research company that shall remain anonymous must not be good at their job.
I would like to see the research documents and the ‘independent’ rental valuations. My guess is (and I don’t know because I have not seen any), is that the research documents are provided by the developers selling the properties through the Club and the rental valuations are done by local real estate agents (is there some use for them after all?). I cannot see The Investors Club paying for rental valuations through a licensed valuer for all the properties they are offering for sale.
Does anyone have a name of the independent valuer or research company??? I am happy to check them out as well.
9. Most real estate agents will cease involvement as soon as the property settles and they receive the commission.
Most will also provide a full range of services after a property has settled including property management… hang on, the next reason is a continuation of this one. That means there is really only about 5 ‘so-called’ reasons.
10. The Club provides a range of after sales services from property inspection, newsletter, tax depreciation schedules, leasing assistance services for as long as they need the services.
And I am sure every single service excluding the newsletter (great marketing tool) will cost you even more money. These services are available everywhere. Nothing special here. Just one thing, who does a property inspection ‘after’ settlement? A prudent buyer would have done this prior to settlement. Sounds like a great service from The Investors Club!
The Real Estate Agents Way
Investment properties sold through Real Estate Agents are often second hand, requiring costly repairs and maintenance and providing reduced tax benefits due to minimised depreciation.They are also usually much more desireable, harder to come by and offer much greater opportunities. These properties have a history to determine whether they will be a good investment or another off-the-plan dud!
I can’t tell you how many new off-the-plan units I have seen that have required major renovations within a year and the builder has gone bust so a special levy must be charged. Does The Investors Club provide due dilligence and research regarding the builder? Also, the strata rates are usually much higher on newer units. Who wants the headache???
The rent return is often too low to cover the repayments on a principle and interest loan.
I challenge any Club member or employee to show me a single brand new off-the-plan property in Sydney, Melbourne or Brisbane that rents for more than the P&I payments at 80% LVR. I can show you plenty of ‘second hand’ units that do. Remember, the Club suggests minimum money down so at 95% or 100%, the situation with the Club properties would be ugly!
Why compare apples and oranges anyway? Isn’t the idea behind The Investor’s Club to maximise tax deductions? Who pays principal and interest on an investment property when they want to decrease their cash flow. If the rent return was higher than the repayments, wouldn’t this eat into the depreciation benefits? You either want positive or negative. Which is it?
The result is heavily negative cashflow where the investment property becomes a drain on the finances of the investor, rather than a source of additional income.
The Investors Club talk of living off equity. Although this appears to increase cash flow, it is an ongoing negative result. To live off the equity would only be required if your cashflow is negative. So which is it??? Negative or positive investment properties? Everything I have seen is very negative which is ‘a drain on the finances of the investor’. Kind of hypocritical if you ask me.
The Club’s Way
Properties selected by The Investors Club are based on a strict criteria for rent return AND good capital growth. The recommended loan through the Club is interest only and properties are usually new to maximise depreciation and the associated tax savings. Appropriate return and tax savings result in positive cash flow. Ideally the investment property is a source of additional income every week. This ensures that the investing process is stress-free and makes it much easier to continue to grow a portfolio of investment properties.Absolute rubbish! Has anyone even mentioned the result if one or two of these properties lies vacant for a little while? This is common in off-the-plan units as there are so many to choose from in each development.
I think The Investor’s Club needs a new marketing company or needs to search hard to find 10 REAL reasons why using them is better than using anyone else.
Robert Bou-Hamdan
Mortgage AdviserRob, Did you see Meet The Fokkers? If so, you’ll know what I mean when I say,
“I am wathcing you.”
Keep going.
LL
(Lurking Leo)No. Haven’t seen it so I don’t know what you mean. Is it a voyeur thing?
Robert Bou-Hamdan
Mortgage AdviserEr no, far from it. It’s a family show!!
Leo,
I saw it and thought it was hilarious! Especially the 2 characters ‘Gaylord Fokker’ and ‘Marther Fokker’ (lol). Wasn’t De Niro the one who played the paranoid ex FBI guy who said “I am always watching you (?)” and hid in a bus, nearly destroying the family and was always wrong?
Gatstby!Originally posted by Leo Chekhov:Er no, far from it. It’s a family show!!
Hehehehehe… I meant the “I’m watching you” comment.
With a name like “Gaylord Fokker”, what sort of family show is it? I am not inclined to watch it as it is not my type of humour. I am more into comedians like Eddie Murphy, Will Smith (Prince of Bel Air days) and Seinfeld.
Robert Bou-Hamdan
Mortgage AdviserA final blow!!!
The usual applies… text in bold and italics is from The Investors Club website.
The Investors Club provides a range of services to help ensure that investing is a simple and stress-free exercise.
These services are provided at no cost to the members and include:
__________________________This comment, and some others, are probably best addressed by including the following snippets from the MIAA Advertising Guidelines…
The misleading conduct provisions require that a business must not in its business activities engage in any conduct that misleads or deceives or is likely to mislead or deceive consumers. As well as direct advertising, the requirement covers representations made during meetings with customers, over the phone, in brochures, on websites and so on.
Advertising can be innovative, exciting and competitive; but it must also be honest, balanced and accurate.
We know accuracy is a problem. Just look at the interest rates quoted on the website. Oooops! Honesty and a balanced presentation are still being discussed.
Risks to Avoid that are Specific to the Mortgage Industry Advertising which uses the following words needs to be carefully checked for accuracy and truthfulness:“Independent’ ‘Impartial’ or ‘Unbiased’ Advice
Is the advice being given, independent, impartial or unbiased and not influenced by factors other
than the consumer’s best interest? If a broker receives commissions or other benefits from a lender there is potential for the broker to be influenced by factors other than the consumer’s best interest.The Investors Club receives commissions from everywhere. You decide where their true interests lie.
The ‘best’ deal
It is impossible to demonstrate, at any point of time, in the large and competitive mortgage market
that a deal is the ‘best’ deal.Advertising should avoid such terminology and similar expressions like ‘cheapest’ or ‘lowest
rates’.‘Guaranteed’
You should not use the word ‘guaranteed’ unless you are making a contractually binding promise, and, if so, you must make the precise terms of that promise clear. Generally, as terms and conditions are too wordy for practical use, the term ‘guaranteed’ should be avoided.‘Free’
Is the service you are providing really free or are there other costs the consumer might incur or benefits they might be giving up?
We know The Investors Club makes commissions. Not much is free in this day and age.
Use of Charts, graphs, images, on-line calculators
Charts, graphs, images or on-line calculators, either by themselves or in combination with each other or with words, may create a misleading impression. You need to ensure that the likely audience will not obtain a misleading impression from the material as a whole.I am told that The Investors Club uses overhead projectors etc showing charts to support their ‘claims’ regarding their property investment ideas. Surely these graphs would show the decline in value of many off-the-plan properties in recent years so the attendees can make an informed decision. I look forward to attending a presentation.
If you are making comparisons, make sure you are comparing ‘apples with apples’. For instance, it is misleading to say that a line of credit or offset account product can be paid off more quickly than a standard product if this result can only be achieved by making larger or more frequent payments. If you suggest otherwise, you are not comparing ‘apples with apples’, and may find you have breached the misleading and deceptive conduct provisions.
This equates to comparing new properties and old properties. Demand for new properties is inflated as a result of the FIRB (Foreign Investment Review Board) requirement that overseas investors can only buy new properties. We have all heard the stories of the ‘spruikers’ ripping people off overseas. If given the choice, I do not believe any international investors would buy these off-the-plan properties.
__________________________So what exactly is provided by The Investors Club????
Provision of a detailed property investment analysis and selection of properties, specifically chosen to provide members with high returns;
I would guess that these reports are provided by the developers at their own expense and any property providing The Investors Club with a good commission would be “specifically chosen” and included. You only need to look at their website to see the “specifically chosen” properties. Then walk down to your local real estate who sells off-the-plan properties and presto!!! They also “specifically chose” the same properties…WOW!!!
Assistance with all legal documentation and tax office compliance to make the process simple and efficient;
This prevents your independent solicitor trying to snap you out of buying a lemon if they have property knowledge. This sounds like a huge conflict of interest to me.
Managing the process of finding tenants and looking after investment properties so members don’t have to worry;
How nice of them to offer to do this. Surely they are not getting a slice of the management fees that goes along with property management??? How about a cut of the upfront commission the managing agent gets for finding a tenant – usually a week’s rent??? Such a nice bunch of people offering to manage your property for you and calling it FREE!
Regular networking opportunities so members can learn from others’ investment experiences;
And so they can sell you more of these fantastic investment opportunities. I like it when I hear people call a sales presentation a ‘networking’ opportunity. It always brings a smile to my face.
Regular updates, newsletters, seminars and meetings to ensure members always have the latest, most up-to-date information;
This also ensures regular contact with clients, good marketing contact and MORE SALES!
Valuation reports and value comparisons to ensure members can make their choices with all the available information;
I am still yet to determine if these are provided by truly ‘independent’ and ‘licensed’ valuers but no members or employees of The Investors Club will speak up in support of the organisation they so dilligently support. Maybe they have been told to keep quiet. Maybe I will be sued. I am quaking in my boots!!!
Provision of a detailed financial analysis so members can do their own independent research and checking;
Hopefully a prudent ‘member’ will take this information to their own accountant or solicitor who has not been referred to them by another member or ‘support member’ for proper checking. Also, it is hoped research is undertaken on a recommended property and the area. Every property I saw on the website, I would not touch with someone else’s money!
Monitoring population trends and growth rates to ensure doubling of values quickly;
“Ensure doubling of values quickly”… this is the answer to all investors concerns. How can anyone “ensure” when a property value will double, if ever? This is totally misleading and deceptive. Does anyone actually have an off-the-plan propert purchased through The Investors Club that has doubled in the time they were told and it was “ensured”??? Anyone??????
Assistance with information about Landlord Insurance against ‘nightmare’ tenants;
I would be guessing more commission is earned here. Why wouldn’t they help.
Maintaining a large portfolio of available properties in a diverse range of areas throughout Australia and New Zealand, providing more choice and greater investment opportunities; and
It is a numbers game. The more you have, the more you sell and the more money you make. I would change “greater investment opportunities” to ‘greater SALES opportunities’ and consider it more reflective of the reason behind offering so many properties.
Assistance with developing personal wealth creation plans to fast-track financial independence.
YES…more commission here when people invest. I am still wondering who holds all the licenses and certificates required to act as a real estate agent, a mortgage broker, a financial planner, a property manager, and so on. I know it is not the ‘support member’!
The Selection Criteria
Correct property selection is critical. To qualify, every property recommended by The Investors Club is tested against the following selection criteria:
* It should be new, or near new to qualify for full depreciation;
* Lowest vacancy area;
* Preference for brick and tile;
* Excellent transport facilities;
* Located close to schools;
* Spacious in area, inside and out;
* Approved by banks and insurance companies;
* Low maintenance building and grounds;
* High capital growth potential;
* Highest building standards;
* Close proximity to shopping centres;
* Highest gearing advantage;
* Reliable body corporate management;
* Near freeways that access waterways and beaches;
* Units/town houses should be within reasonable distance to the CBD or key population growth areas;
* High employment area;
* In high demand by tenants;
* Foreign Investment Review Board qualification;
* Pleasing landscaping and setting; and
* High standard of project security and maintenance.If their properties were to meet with all these requirements, The Investors Club would have nothing to sell!!!
Robert Bou-Hamdan
Mortgage AdviserOK Rob i’m convinced, I am going to attend a few meetings for myself.
You have raised many good points here which need clarifing, as i said before i liked the concept but is it deceptive??
resiwealth
Resi, let me know when you are going (if in Sydney). I will come with you.
Has anyone ever seen anyone thrown out of a seminar???
Robert Bou-Hamdan
Mortgage Adviseri used to date a girl whos father was a support member and i ended up on the mailing list.
interesting to notice that on one of the charts their gold coast properties have had an amazing 0.00% vacancy rate for as long as i can remember.If that is not misleading and deceptive conduct, I do not know what is!
Feel free to send me a copy. I would love to see it.
The Mortgage Adviserhttp://www.themortgageadviser.com.au
Robert
When you attend TIC meeting in Sydney if Kevin is present ask him if Young is his real name. I would be interested in what his current day reply is.
As someone who has had dealing with TIC since its inception i can provide you with evidence of many many properties which have been sold way over valuation price.
I should know i financed most of the deals in the early days and was fed up ringing the clients to tell them the valuation had come in less than the purchase price and asking them to sign an ackowledgement to this effect. The next call the client received was from the support memeber convincing them that all valuers undervalued properties and it was just the way things were done.
Remember in 1995 they only sold property in Brisbane. Thankfully a lot of the proeprties they sold where mine that we had developed and provided them with registered valuations. Usually the property was then listed for sale at a higher price to accomadate theincreased commissions.
The advent of the Lisson Real Estate license did little to kerb the high commissions and the late 90’s saw the breakaway groups all keen for a slice of the action. The Property Investors Group, Wise Financial Management the list goes on.
Nowadays the Clubs Loans hat is worn by brokers who have purchased through the organisation.
I appreciate Dereks faith and committment but wonder whether as a Brisbanite who has had dealing with the organisation for 10 years whether he really knows the real story of the organisation.
I can assure you there are many many clients of mine who wish they had never heard of Kevin Young or whatever his name is.
Cheers Richard
richard at castlewhite.com.au
Email me for details of our Qld wrap CD which gives you a full Installment Contract.Richard Taylor | Australia's leading private lender
Thanks for the info Richard. I may need it sooner than later.
I am a bit concerned that publicly airing my opinions regarding companies and individuals who I consider shonky will result in various problems for me. These include, but a not limited to:
1. Legal action, which does not concern me except for the time wasted beating them.
2. Being considered a rude obnoxious %$#@& for telling things how I see it.
3. Being called another Jenman for ‘exposing’ shonks.I think I have said enough to discredit The Investors Club for now and warn people off which was clearly a response to comments directed at me by an ‘unnamed’ support member. I am content just waiting until someone who works with that shonky organisation tries to dispute any of my comments before I add more fuel to the fire.
From what I have been told in the background, I should be expecting a subpoena any day now. I will let you know.
The Mortgage Adviser
http://www.themortgageadviser.com.au
[email protected]Waiting….waiting…waiting….
Any news yet Rob ??
No. Not a peep. I guess it is just rumour and inuendo on the part of those telling me. I find it remarkable that not a single representative of The Investors Club has responded to my comments though.
The Mortgage Adviser
http://www.themortgageadviser.com.au
[email protected]
Essential LinksYes funny isnt it Robert.
What happened to all Mr Sampe’s researchers and support members now.
Surely they havent ALL joined Lionel Morris.
Cheers Richard
richard at castlewhite.com.au
Email me for details of our Qld wrap CD which gives you a full Installment Contract.Richard Taylor | Australia's leading private lender
Seeing Derek is finally back, I thought I should also bump this thread up.
The Mortgage Adviser
http://www.themortgageadviser.com.au
[email protected]
Essential LinksI got on there Mailing list sum how back in 2000, some mate must have dobbed me in.
I went to some seminars, I’m glad they no longer have my address.
I’ve move around a little since 2000.
RegardsWhat happened west??? Did they want upfront deposit??????
))The Mortgage Adviser
http://www.themortgageadviser.com.au
[email protected]
Essential LinksReading the West Australian on the weekend and noticed in the Property section that ALBANY has 10 new Millionaires in the Investors club and has over 200 members in a town of 30 000 people.
Would they have got there ‘without’ the Investors Club?
For all the minuses mentioned it’s gotta have some positives?
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow Calculator
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