Hi,

I've seen the ads and website since they first started advertising. Anyone would think they had just 'discovered' options. I've been using them for 25 years. An hour with a good property lawyer will teach you plenty about options at about 4% of the cost.

Jenman also had something to say about them

THE HEARTY DROVER'S PIE

Stay away from 'The Science of Options'.

by Neil Jenman

Lately, you may have noticed some big advertisements which make strong claims about a three-hour property investment seminar. Something to do with "property options".

According to the ads – which appear in many of the major newspapers and take up full-pages in Australian Property Investor magazine – you'll be shown a "unique strategy" on how to control "multi million dollar" properties with "minimum risk and maximum return!".

The three-hour seminar costs $47 per person (or $57 for two). And, of course, it all comes with a "100% Money Back Guarantee!".

It's all supposed to be about sharing a "closely guarded system".

It's hard to believe that anyone, these days, can fall for such con-cliché garbage.

Okay, so what's the story with this mob?

Well, the seminar is simply a "sell" to attend another seminar apparently costing up to $30,000 per person – that's the one where you will supposedly discover the "real" secrets.

The advertisements do not mention the name of the presenter. He is simply referred to as "your presenter". The reason his name is not mentioned should be obvious. He's dodgy.

His name is Zaffar Iqubal. Sometimes the name Khan is added which then makes him Zaffar Iqubal Khan.

His company name is not mentioned either – there's just a web site http://www.sop.com.au

S.O.P. means Science of Options. That's a common spruiking ploy – make something seem scientific and then charge mega-thousands for revealing the secret of the science.

Well, there's no secrets offered here other than that Zaffar Iqubal has been twice bankrupted for failed business ventures and was, according to the authorities, also banned from being a company director in Australia.

He operates out of Queensland (another shady character giving the Sunshine state a bad name).

Zaffar took his dodgy suck-em-in seminar to Western Australia a few weeks ago. He didn't realise that the west has the best consumer protectors in the country. As soon as they got wind of him, they quickly issued a warning to consumers.

WA's Consumer Protection Commissioner, Patrick Walker, basically told Zaffar Iqubal to get out of the state – sort of like an old western sheriff.

So Zaffar high-tailed it back east in search of easterners to suck-in with his dodgy claims.

Tonight (June 12) he's presenting his seminar at the Gold Coast (and, again, on July 2).

Our strong recommendation is that you avoid this spruiker. He just wants your money – thousands of it.

Oh sure, it looks like $47 for the 'intro' seminar is a good deal. It's not.

For $17 less, you can do something we highly recommend.

Go to Arch's Restaurant at Mariners Cove on Seaworld Drive, Southport (opposite the Sheraton Mirage; just behind the Hogs Breath Café). Phone 07 5532 6380.

For $30, you can have the "Hearty Drovers Pie".

That's our excellent recommendation. Try it. It's the most delicious feed you'll ever have.

So, there you go – a full tummy and a full wallet by staying away from Zaffar Iqubal and his laughably named 'Science of Options'.

Hi Bundy,

I'll assume the land you are buying is new, direct from the developer, and not 'secondhand'. "Secondhand ' land would not be effected by GST. I also assume you have a contract for the land and a building contract with a builder. The land developer and the builder might or might not be the same entity.

As you are probably aware the building contract price contains costs, most of which carry a GST component, which the builder will claim back as tax input credits. He will be registered for GST.

The land developer would be registered for GST and more than likely would have bought his land under the margin scheme. The development of the land would have incurred costs carrying a GST component. When he sells you the land he will remit one eleventh (GST component) of the selling price to the ATO and would have claimed back the tax input credits from the costs carrying a GST component during construction.

Therefore I would expect that there is no GST to be claimed by your entity. You are neither the land developer nor the builder. If you on sell the house on completion there will be no GST ramifications as it will be deemed to be a 'secondhand' home. Your entity will simply pay income tax on the profit. If you hold it as an investment and rent it out it will be treated as an investment property and subject to normal income tax and / or cgt rules if you sell at a later date.   

Hi akeiva,

You seem to be confused between an investment property and undertaking a development project. Forget negative and positive gearing, that has to do with investment properties. You are proposing to undertake a development with the expectations of making a profit. It's the profit (hopefully) you will pay income tax on – when it is realised.

The entity (individuals, company, trust) which owns the land and undertakes the development will be what is taxed. I assume that same entity will also be the borrower and guarantor of the development finance.

You have said you are undertaking due diligence. Do you have the site under contract? Do you already own it? At present the name on the contract, or title if you own it, is the entity that will be taxed on the profit and borrow the finance.

I suggest you go to my website and download my free e-book "Getting Started in Property Development". Getting the right structure is something that should be sorted out at the very beginning – before even looking for a site. This is where a good property lawyer or accountant with experience in tax effective structures for investors and developers can be valuable.

Hi Clovies,

I'm not sure if this is the same crew as The Insight Group which is featured strongly as scammers on Neil Jenmans site http://www.jenman.com.au.

Hi Ming,

I agree with Marc's summation. What you're proposing is speculation, not investment.

If you really want undertake this I would strongly advise that you 1. undertake research to ascertain the likelihood of prices continuing to rise. 2. are financially capable of settling if you can't on sell.

Remember if you do on sell you will have to take into account legals and stamp duty on the purchase and commission and legals on the sale. This will dilute your profit.

Also if you are paying over the odds now or the market dips, the valuation on settlement might be less than the purchase price and the financier will only base their LVR on the lesser amount, leaving you to tip in more equity than you were expecting.  

Hi Jillster,

I would recommend Chan and Naylor http://www.chan-naylor.com.au ph.  9510 2277 or
Gatherum Goss & Associates http://www.gatherum-goss.com ph 8813 0162
 
Bob Andersen
Positive Property Strategies
http://www.propertystrategies.net

Hi Anita,

Terry is right.

An important thing to think about is dependent on whether you intend to sell the properties or hold for investment. There are different implications in regards to GST, CGT and income tax if you are a developer who sells or an investor who holds. Different structures are required to maximise the various taxation outcomes, particularly if you intend holding.

I'm not qualified to give specific advice on how to achieve that, particularly on a public forum, but after 27 years of development I have sorted out the answers.  For the answers you need to take advice from an accountant or solicitor who has experience in property development and investment and the formation of tax effective structures.

Bob Andersen
Positive Property Strategies
http://www.propertystrategies.net

Hi Johann,

Congratulations on your first property investment. I have been a developer and investor for 27 years and done properly, property development can be very rewarding.

Property development requires knowledge, time and money although it's not absolutely necessary that you have all three. For example you might have knowledge and time but might need to partner with someone who has the money but not the knowledge and time.

Undertaking your first property development incurs more risks than acquiring your first property investment but the rewards can be much greater. Investors who become developers usually do so so they can obtain investments at absolute developer's cost, instead of paying retail price like most investors. Developing your own investments can be a great way to build a sizable property investment portfolio much quicker than paying retail price.

Knowledge and experience can be the most elusive element to obtain and this is where you need to leverage off knowledgable and successful developers. Firstly I suggest you read any literature on property development you can get your hands on. There are a few Australian books written on property development including one I have written. The Australian Property Investor magazine is currently running a series of twelve articles on becoming a small property developer commencing with the September issue.

Next I would recommend you invest in attending a property development workshop where you can obtain direct, hands on knowledge of property development. Lastly you should seek an advisor or mentor to 'hold your hand'  through your first one or two developments.    

Feel free to check out my website http://www.propertystrategies.net . As a budding developer you might find it interesting.