“THE INVESTORS CLUB” ANYONE HEARD OF THEM OR KNOW WHAT THEY ARE ABOUT?

I recall recently reading that the investors club is suing Neil Jenman. think it was mentioned in Jenman's recent email newsletter.

Just a thought. 

What is all the talk about TIC and the like charging big fees.  If the price of the property is the same for EVERYBODY in the market place regardless of who they purchase through – TIC, Local RE Agent, builder/developer direct –   does it really matter if the developer/builder decides as a marketing advantage  that paying extra money helps him to sell more property?

All that is happening here is that the seller makes less profit,  the buyer IS NOT paying more than market price so please explain all you knockers how you believe the buyer is disadvantaged.
 
I am not a member of the TIC nor have I purchased from them.

I am an experienced property investor who understands that not all operators out there are ripping people off.  Sure there are those who will take advantage of the ill informed, naive "investors" who don't do their homework, however, in the market today there are many safety measures in place to help everyone proceed with adequate protection.
  
Do your own market research, get your own valuations done if you are concerned – what ever happened to buyer beware??? 

QGM,

My gripe with them is i feel they misrepresent them selves as a club when plainly they are not. If they were a club, in the true sense of the word,  they would pass on the profits to the members or lower the commissions they demand so they are not paying the same as everyone else. And the fact is other people outside of the club can negotiate with the developers, some will offer a cash back incentive at settlement to these people but make the contract price the same to keep it all nice and tidy. Fine, let the top echelon make all the money, but don't make a song and dance about how good they are to their members.

They have massive problems with valuations and actually pre empt this by telling members to expect it but don't be put off by it, that's just real estate for you. The in house finance department can get you round that obstacle.So are they paying market price??? I'm sure there are plenty that will argue both sides, but I think not.  And their strategy used to be and i would imagine still is, to push people towards the stock they can get listed for the big fees, not nessecarly where the best place to buy is. Best for the member, I think not. You can go on all day about buyer beware but that is not really the point, particularly the way they do business, and yes people have made money through their buys, they just could have made more.

I am not usually a " knocker"and am in fact quite a positive person, you need to be in life. and if knocker is the worst i get called today, then thats a good day.

BTW, like you I have a lot of experience in property investments and I have also had first hand experience with the club in past times.

I’m in my twenties and not quite ready to invest in property but I’m putting in a solid effort to learn how it’s done and TIC stood out because it offers buyers umpteen free services.   I’ve been to several TIC meetings but I’ve arrived at this forum as part of my due diligence.  They seem great but having never bought a property through them I cannot write from experience.

Well what is a club in a true sense of the word?

Dictionary.com offers several definitions and TIC matches two of the definitions:

“A group of persons organized for a social, literary, athletic, political, or other purpose: They organized a computer club”

“An organization that offers its subscribers certain benefits, as discounts, bonuses, or interest, in return for regular purchases or payments: a book club; a record club; a Christmas club.”

Dictionary.com, "club," in Dictionary.com Unabridged. Source location: Random House, Inc. http://dictionary.reference.com/browse/club. Available: http://dictionary.reference.com. Accessed: November 29, 2009.

I’ve been a member of various clubs, social, sporting, investing or otherwise.  Some were free, some I had to pay for membership, but very few have shared profits with me!  Sure the Woolworths Frequent Shopper Club gives me a measly $20 voucher sometimes but that’s just a clever promotion to ensure I spend more money at Woolworths, not really a helpful benefit.

Like most clubs TIC uses some of their profits fund all the services they provide, according to this webpage they provide quite a lot freely to members:  http://www.propertyiinvest.com/tic

I was lead believe those services was how TIC passed profits onto members, obviously not in the form of money so silly me…  Meanwhile there are organizations in Australia and around the world charging their members thousands of dollars for similar services.

As for developers, their properties get exposure to a highly targeted list of interested investors and thus increase the probability of selling properties faster.  I'm not a developer so I cannot substantiate whether this is accurate or beneficial to them.  As for the average person selling their property through TIC, my support members advise them to go to a normal real estate agent because TIC works for the buyer, not so much for the seller – unless the seller got has dozen of properties.

Should the people who run TIC provide their time and labour and not expect anything in return? 

I won’t deny I’m biased towards TIC, perhaps attending all those workshops has brainwashed me but it seems if all organizations provided that much for free and still made a profit the world would surely be a better place?  I’d love a bank or telco the equivalent of TIC.

So have I been I totally misguided by TIC?  And for those who say "TIC is good but not the best" please tell me who is the best…

Hi Property Guru,

Thanks for responding!

I've met Kevin Young before and will be meeting him again in a couple of weeks time at the annual social event my local support members throw each year.

My questions were aimed at those who disagree TIC is a club or those who have purchased through TIC and have had a negative experience.  It seems only the people with positive TIC experiences shared their stories, meanwhile those with negative experiences either are steering clear or merely alluding to it. 

In order to make an informed option I'll need to know the bad side, not just the good.

I don't need convincing that TIC is a club.  My understanding of a club is an organisation which you become a member to receive benefits. 

I also acknowledge that some clubs are non-profit organisations while others are commercial entities, so I don't think it  matters if the people behind TIC are profiting from it.  What is matter is they're delivering free education and services that costs thousands of dollars to receive elsewhere.

Also another common complaint seems to be TIC properties are over priced.  From my understanding TIC only selects properties which are in demand, and when something is in demand its usually more expensive, but the advantage is the capital growth appreciates faster.

So it's better to have one $500,000 property doubling in value every 7 years than two $250,000 doubling every 10 years.  Aside from taking longer to increase in value, with the $250,000 properties you'd be paying two sets of expenses.

Simple reason they concentrate on units/townhouses etc and not freestanding dwelling is that the developers who pay them a nice fat commission (Trust me they have market over 100 of my properties over the last 13 years) will not do so on a single dwelling house.

Also ask yourself why the yields tend to be lower, it wouldnt be that the purchase prices are inflated.

As a developer and also financier I see many valuations each week and know as a fact that many of the larger valuers simply will not value up to purchase price hence the reason why Club Loans suggest you cross collateralise securities and dont offer clients a copy of the valuation.

Ask Kevin Young or Sampe whatever name he is using these days when you meet him.

He changed his surname to "Young" because it's a more marketable name than Sempe, but I suppose people without a marketing background wouldn't understand this.  Nonetheless, both Kevin's sons retain the name Sempe and its not it something they're trying to cover up.

Like any business its usually more profitable to buy in bulk…

TIC focuses on negative gearing strategies for tax offset purposes.  If the properties were too positively geared the investor would be paying more income tax rather than less.  But obviously it depends on the individual's objectives and personal situation as to whether the gearing should be positive or negative.

Ok, now we might finally have some  legitate concerns!  

• Are you able to provide evidence to support the stagement about "larger valuers simply will not value up to purchase price"?
• TIC doesn't offer clients a copy of the valuation – even after the client asks for one do they still refuse?

Yes i agree Dan,  Richard Gear here.

And Yes i can evidence both copies of registered Heron Todd White valuations (we use them for all of our Developments and have done so for 14 years) and copies of executed Contracts.

Such evidence has been provided to the ASIC on a couple of ocassions.

Oh and by the way you must be having a laugh. Sure the ATO would be pleased to hear this form of marketing …..
TIC focuses on negative gearing strategies for tax offset purposes.

Mister Phes (if that is your real name), I didn't write the bit about the ATO. All I commented on was your defence of Kevin Young changing his name. It gave me a good laugh. The fact you mention David DeAngelo as a defence of the practice, as well as Donald Trump, amuses me even more.

Thanks for brightening up my day.