The Investors Club

I lifed this from a google search..

THE Investors Club, a lucrative business run by a Gold Coast real estate mogul who travels Australia signing up Mum and Dad investors for multiple properties, is under “intensive investigation” by both ASIC and the Office of Fair Trading.

Investigations across the country have so far revealed that the business may be in breach of several laws including the Crimes Act, but founder Kevin Young has insisted there had been no wrongdoing.

At wealth-creation seminars Mr Young and branch members urge thousands of Australians a year to “buy as many properties as quickly as you can, using interest-only loans”.

“You don’t need any cash if you have enough equity in your home or perhaps you can share the purchase with relatives or friends who have other assets as collateral,” he tells budding investors.

More than 3000 people have bought units and townhouses through the club in Brisbane, Melbourne, Perth, Sydney and the Gold Coast in the past few years, providing massive returns for Mr Young and his wife, Kathy.

The Brisbane-based club is in reality a highly profitable nationally syndicated business with an average of about $11,000 on each property purchase going to Lisson Pty Ltd, a company controlled by Kevin and Kathy Young.

Mr Young, who is expanding into New Zealand, claims that members make savings because the “club” drives down the profit margins of developers and also performs extensive research to identify the best locations and tenants.

The Australian Securities and Investments Commission and the Queensland Office of Fair Trading have been separately investigating alleged
unconscionable conduct, selling at grossly inflated prices and unlicensed trading.

An ASIC spokesman said: “We are aware of the issues involved and we are making inquiries.”

Fair Trading Minister Merri Rose said yesterday: “ASIC has been working closely with the Office of Fair Trading on all facets of the club’s operations”.

She said there had so far been 15 formal complaints from members of the public, former employees and real estate agents as well as an increased number of inquiries from people who have previously bought through the club.

“Further investigations into the current activities of the Investors Club have revealed that the club may be in breach of the Corporations Act and possibly the Crimes Act and Criminal Code,” she said.

Ms Rose warned consumers to be wary and to seek independent legal and financial advice before committing to any property purchases.

In February The Courier-Mail reported on a number of disturbing features related to the club and its founder, whose bankruptcy was extended to five
years in 1989 because the official trustee despaired at Mr Young’s deceptive, unco-operative and argumentative conduct.

Mr Young said he believed the ongoing ASIC inquiry was “low priority” and had been started because jealous business rivals were spreading lies about him.

“I would love to speed things up because this cloud is hanging over me,” he said. “I didn’t start the club to make money.”

In a telephone interview Mr Young said the investigation began because business rivals were jealous of his success, but in a statement hours later he said he asked for the investigation “to offset the damage done to the club’s business caused by your article about the club earlier this year”.

“Laws are made to protect the consumer, which is what I do. ASIC requested certain information which we provided.”

EZ-Rent. The free tax and cashflow simulator for Australian property investors.
http://www.ez-rent.com

Jellybabes,

I have been informally involved with the Investors Club for a few years – I attended one of their seminars and knew a few people who have bought property through the club. I get their regular newsletter.

The issues that they currently have with ASIC are largely to do with the legalities of some of their club features and options, such as the club’s optional No Tenant No Pay (NTNP) plan. If you want cashflow protection you can pay a yearly fee equal to 1.5 week’s rent and the club pays you 80% of your rent if the place is unoccupied.

ASIC argue that they do not hold a particular licence to provide this service and have asked the club to stop the service, in the courts – which they have.

Kevin Young advocates a rather aggressive property investment strategy that many people may baulk at. Others have applied his strategy with quite successfull results – a friend of mine was a long term club member, bought 7 properties and left the club since she figured out how to buy IP’s without any further assistance from the club. She’s happy and had an enjoyable experience with the club.

If Kevin has copped 15 formal complaints from the public, that’s not too bad a track record – his membership is some 80,000 strong and it includes people overseas as well as those throughout Australia.

I have found them to be a happy, motivated and an aboveboard club – they have property on the stocklist that may not be everyone’s cup of tea, but I have never heard of anyone being ripped off by them. They have a large membership base and the support they provide is pretty good.

They can organise a property inspection, finance, legals and even get the tenant in for you – if you want to sit back and do nothing.

My only concern is the validity of the property valuations and rental returns. I would get my own independant valuation to protect yourself and I would also get independant agents to do a rental projection on any property you considered buying. The basic rule is – if it looks too expensive, then don’t buy it!!

I think Kevin is a tall poppy that some people would like to see get kicked out of the market, because he does make money and people are happy to join his group and take advantage of discounted property prices that he can obtain through the power of numbers in his club.

Go to one of their seminars and make up your own mind. Unlike other sharks in the market, his seminars are free! []

Cheers,

Rowan