Hello, many of you may have seen the 730 report last week on the ABC regarding My USA Property and one of their founders Andrew Allan. This gentleman lived in Melbourne until recently and now works out of Orlando, Florida. I have been encouraged by a few people on this forum to talk of my experiences to make others aware of the pitfalls and as it is a bit long winded, I will give it to you in extracts, the first one being today. Just to clarify I am Gavin Hicks who was on 730 but have gone under the name of Richard Davies for a number of reasons, the main one being that I did not want my work colleagues and family to find out about the miss dealings with Andrew Allan and My USA Property, however I guess after going on national TV that has blown that logic out of the water! (Although only one work colleague did see the interview thankfully) Anyway, just to let you know that Richard is my alias. Anyway I was introduced to Andrew Allan through Malcolm Reid in late 2009. Malcolm used to be a merchant banker, who went into property real estate, investing and has dabbled in property development. I have used him as a mentor for the past five years and his knowledge of property in the Melbourne area is excellent. He has also helped find some good investment properties in the past and one evening when I had a meeting with him we started talking about the potential for investing in the US, as the dollar had recently plummeted, it was then that he mentioned Andrew Allan, who he had worked with through a real estate company in the past I believe, and said that he was looking to start selling US properties. I said I was keen to invest in the US market, as I knew I could buy properties outright and Malcolm was also interested. I then got in contact with Andrew Allan who had a small office set up on St Kilda road, St. Kilda. He seemed like a reasonable and likeable guy who was keen to get me to become a member of his company, for $350 a year I believe, and he said he would email out properties that I may want to invest in. He told me that he had some good contacts in the States, that it was a great time to buy AND that I could turn over the properties in a matter of months and in order to make a quick profit. Yes he did say this. Anyway I was keen and wanted to buy a couple of properties, one in Detroit, which I aimed to buy, renovate and sell within a matter of 3 months and the other was based in Youngstown, a four unit place which I aimed to renovate, rent out and get steady cash flow from. I made Andrew aware that I needed to sell a property quickly after I bought it as I had a settlement due on a investment property in Edithvale, Victoria within the next year and I would need to get my cash back. He guaranteed that would not be a problem. He also made me aware that part of the service I was paying for was that they would find me a prop mgt, renovators and get both places set up or renting. For that service fee it totaled $13,000 for both properties. Unfortunately, as seen on 730 these promises did not come to fruition. To be continued……
This information is gold for people. Obviously I have some knowledge (though far from detailed) of what is going to be explained to people now and I think many will be shocked. I couldn’t believe some of the things that were done to Gavin – I’m sure you won’t either.
Gavin deserves a lot of support from everyone for attempting to help other people by explaining how he was trapped.
Thanks from everyone in advance Gavin – this will be a riveting read.
Gavin,
Well done for speaking out. I hope this serves as a training tool for people contemplating investing in the US real estate market. Looking forward to hearing the whole story from you. You have the support of many on this forum believe me.
Yeh what tex said , X 2
looking forward to the next installment
Gosh, Gavin.We were sent the report by a concerned family member.
Sorry to hear of your dramas.So many shonks out there.
We are trying to give investors a US investing alternative with integrity, rather than charge a huge up front fee, and just sell something we marked up 40% plus, above its real value.
How do those people sleep at night!!
Ruth
propertyinvestingusa.comI note with interest the subject line has been changed.
It may well do to read what Gavin has to say, because myself, Emma, my US agent and the legal arm of the ABC agree with Gavin that this was an appalling text book scam. Whilst I can understand you wishing to delete words like 'scam' under threat, let me assure you and anyone reading this that there is no other word in the English language that better describes what happened than 'scam'.
I would suspect the delightful Andrew Allan may have been in contact to get the retraction. If he has he is probably reading this. If he is reading this, he knows exactly what is going to be told and if he had any decency at all would be running barefoot over broken glass to do his best to assist Gavin extract himself from the very deep bear pit that the great Andrew Allan mercilessly and deliberately (or at the very least totally incompetently) dumped him in.
I haven't spoken with Gavin about this, but I suspect all Gavin would want is a fair outcome for him. God knows it is what he deserves. I FULLY support Gavin posting on this site, and FULLY support his choice of words in the title. Rather than getting upset when people call a spade a spade Mr Allan, why not go to the root of the issue and start solving problems you have caused rather than covering up and obfuscating? Or are you concerned that if you do help Gavin you may have to help dozens (at least) of others and the profits you claim not to have made will disappear?
This is going to be a rivetting post!! It hasn't even started yet!!!!
<moderator: this post and subsequent posts by Deano the Braveheart have been removed due to their abusive nature.>
Wow – you came out of six years in the lurk just to spit in Richard's face for coming out to warn others? Aren't you a sweetie.
I think he's pretty aware by this stage that he could've done things differently. The point (his and that of those encouraging him, at least) wasn't to "run crying" as you so delicately put it, but rather to point out these pitfalls for others, who may be considering doing something similarly foolish and, guess what – the attitude "wow, you're stupid, look at my amazing success" (which, don't take it personal, isn't that huge compared to some of the folk around here, who surprisingly are alot more civil and modest than you) – is not helping anyone achieve that goal – warning and educating.
For an anti-capitalistic non-greedy semi-humanitarian you're right up there with, oh I don't know, Trump, I suppose – minus the money, of course. Best of luck in Bris-Vegas.
Ziv Nakajima-Magen | Nippon Tradings International (NTI)
http://www.nippontradings.com
Email Me | Phone MeZiv Nakajima-Magen - Partner & Executive Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property
I agree with most of what you say… Especially the simplicity in essence of real estate… I think for me the support stems from the absolute and I mean ABSOLUTE knowledge that he HAD in his mind done due diligence and that was and is what makes me furious… But for this forum and one other there is NO ONE out there talking about HOW to do due diligence… In fact, they roll out expert upon expert reassuring you they have done the due diligence!!! it is literally possible to go to a 3 day seminar on US property and not ONCE find out the basics…. How to do due diligence…. How to buy a property, that the information is even vaguely out there…. Zillow, Trulia, Redfin, county websites….
You live overseas, I do as well but as we both know…. In Australia that information, the information that allows you due diligence is
NOT readily available and VERY few foreclosures come on the market… Let alone ones that anyone can just buy.In other words if you knew 100% that you COULD NOT buy such properties… Could not get the information of who owns the property and how much they bought it for and how much the neighbours bought it for and how much it would rent for etc… And you had all the “experts” lined up telling you that….. I CAN see how you could get fleeced. This happened over 2 years ago ….it has been going on for 2 years. It is actually ironic that we have a veteran US GFC person able to tell the story with 2 years of knowledge and we can learn how to avoid the pitfalls.
I was SHOCKED when I first came to Australia hearing how little information was out there that is SUCH public knowledge… But you have to pay for RP Data in OZ…
Put it this way..ll if I were to ask you if I could look up by myself the title deeds of the neighbours properties to yours in Brisbane, or what the last 10 sales were in your building, could I do it? I wouldn’t have a clue on the properties I own in Oz….. ! To be honest the thought of paying experts to deal with it all isn’t that shocking…
What I can say is that VERY VERY VERY few people on this forum would have bought their US properties from the only REAL method that protects them….. Ie via a US licensed buyers agent representing them….And learning this market. Very few would even know where to begin.
I do concur that real estate is simple, really simple and my absolute belief is you are better going it alone than anything else..
It is CRITICAL TO YELL IT …. Anyone can buy these properties ANYONE via ANY licensed real estate agent.. You don’t need to be part of some spruiking club…….
If people really need to be warned about these scamsters Zmagen then woe will befall these people everywhere. Phew..seriously. Get with the picture. The pitfalls were, and are..blatently obvious. Does one need to go bleating about such fundamental errors?..seriously. A fool is born everyday…and to support and shelter them from the truth..the idiocy of their actions..may be to you a "humanitarian"way to cope with his distress, i rather believe that the truth is a more potent tool for change… Truth hurts. Get over it! Wasnt my intention to say look at my amazing success…in fact, was just highlighting how success (if thats what you want to describe it as..thanks)…how a blind mans dog could have had such…with a little due diligence. As i say..not rocket science bloke. And you help support my point Ziv, that success seems to be something many want to gloat about…i know it hurts many to call a spade a spade… and clearly i raised your hackles…(got something to hide?)….I certainly dont want to compare my self with Trump or any of your perhaps role models…phew..im far too busy enjoying life for that… And oh..i dont need luck…i make my own…as i feel most do. I dont wish Gavin luck..i wish him the common sense to be a tad more sensible in the future.
What's blatantly obvious to you, mate (and in hindsight, or at someone else's expense, it's always easy to claim, ain't it?), isn't necessarily to others, particularly in today's climate. Your arrogance and insults, again, aren't helping anyone – Richard's expose' is.
As for my hackles, you're welcome to scurtinize them any day of the week. What you raised was my sensitivity to brutes. I don't see naivity as "stupidity", and don't treat anything that I know as "blatantly obvious". All you're achieving is (possibly) stroking your own ego at the expense of people that might benefit from what Richard has to say. You made your point, you're all high and mighty and he was small and stupid. Now go back and lurk.
Ziv Nakajima-Magen | Nippon Tradings International (NTI)
http://www.nippontradings.com
Email Me | Phone MeZiv Nakajima-Magen - Partner & Executive Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property
Ziv…sorry if i came across high and mighty…not my intention. As i repeat however.. Hind sight my …proverbial….Basic rules of due dilligence were not followed…end of story. Truth is what truth is. Naive?…no..down right stupid. Dress it as you must. You are perhaps naive to see it as anything else… Its this political correctness that has got the world in half its problems anyhow… It is not about ego or being high and mighty..but stating the blatantly obvious. Anyhow..nice of you to defend the poor soul from brutish me who wants to (you seem to think) belittle him…many ways to see things there is…but i dont agree with protecting people from their own stupidity..it actually ..(your strategy of stroking poor souls bruised egos and defending idiocy) inhibits their learning potential. Thats my perspective. And also..my statements are intended to help protect those nieve/ (read stupid) enuf to even contemplate repeating the errors that Richard made…I hope they might benefit from my straight forward no beating around the bush, no bull shit perspective on things…anyhow..its certainly given you some fun distorting my message with those raised hackles…he he …..well done…they do say of course ones perspectives are of course typically mirrors on the soul of those doing the distorting… And sad to see your brutish behaviors emerging Ziv…suggesting i go "lurk"…wow…..just because i havent had time to comment on forum issues for the last few years (being a 6 yr member of this mob)you somehow distort that to a description of my existance ..as lurking…..interesting…he he..classic really……ahh humans..frail at the best of times…
Deano, without wishing to distract from either Richard's thread or what you say (and it isn't really wrong, though I am with Ziv and Emma 100%) we could have ALL been caught in the beginning. Richard is very brave, he must have been one of the first few to be caught and went out and found good people to help him solve a major problem – yes he was naive, but fixing it and admitting it takes guts, he has also learnt very fast and is doing a great service to everyone with this post. Imagine how hard it is to accept you have probably lost your entire savings, then to have to relive it first by spending 2 years fighting with the guy who accepted your money, then proving it to investigative journalists and finally rubbing salt in the deep wounds by putting it up for public consumption?
As Emma said above, these guys portray themselves as experts. They are not. They are expert at getting your money in their hands and little else.
The worst rip off Richard experienced through Andrew Allan was discovered very recently by a chance 'did anyone check this?' moment from Emma above. And it was something so basic it would have caught me, not 'could' but 'would' – and I kid myself I sort of know what I am doing in the US.
There but for the grace of god go us all. As I have said many times, what annoys me most is it gives a good industry a very bad name.
Digression: You also have to remember the US is harder edged than Australia. In Ziv's world (I don't know for sure, but I could put money on it) this type of thing would be completely unheard of. COMPLETELY. I signed a customs form this morning in Tokyo with an expensive sterling silver mont blanc pen. I have carried this pen with me for nearly 15 years so it has sentimental value as well. I got to the bus outside the terminal and realised I lost it. I talked my way BACK through customs and when I got to the baggage area a girl came rushing up with a gift wrapped package containing my pen. Try explaining to those people (the people of Ziv's world) how they could be ripped off tens of thousands buying real estate…
My lurk comment was directed at the fact that after all this time, this is the best you had to say – "stupid you". But whatever gets you off, man.
The problem here isn't Richard, it's the shonk who dudded him and countless others. Believing in learning through mistakes and laying all that insult are two wholly different things. But again, whatever gets you off.
Ziv Nakajima-Magen | Nippon Tradings International (NTI)
http://www.nippontradings.com
Email Me | Phone MeZiv Nakajima-Magen - Partner & Executive Manager, Asia-Pacific @ NTI - Japan Real-Estate Investment Property
Gavin,
Good on ya for sharing, for the sake of others. your a good man ! ! !
Deano the braveheart wrote:If people really need to be warned about these scamsters Zmagen then woe will befall these people everywhere. Phew..seriously. Get with the picture. The pitfalls were, and are..blatently obvious. Does one need to go bleating about such fundamental errors?..seriously. A fool is born everyday…and to support and shelter them from the truth..the idiocy of their actions..may be to you a "humanitarian"way to cope with his distress, i rather believe that the truth is a more potent tool for change… Truth hurts. Get over it!And in your own words deano the dung beatle
"they do say of course ones perspectives are of course typically mirrors on the soul "
. I dont wish Gavin luck..i wish him the common sense to be a tad more sensible in the future.Now Deano the coward you've had your three minutes of fame ……. isnt it about time you evaporated back up your own arse and let Gavin finish his story .
.
Gavin… Given the story is as I know it, I would say that those that are sitting smugly may yet learn something about Andrew Allan’s lack of any real US real estate knowledge and literally understand why this isn’t just a story that highlights the flaws but a MUST for preventing them. Guys… Please let Gavin explain…. It takes a sugar load of courage and a year of exhausting EVERY other avenue to put your name and face to a TV show to try to help others…. Andrew Allan of My USAProperty is STILL out there advertising but what is dangerous is, as Gavin will reveal, was either completely incapable of helping Gavin with even the first THING about the basics or didn’t want to…. Which is it??
All I see now are 2 rushes… Those that think it is easy to SELL real estate agent as an unlicensed tourist flipping properties in the US because they have 15years of owning Aistralian property and have purchased a few US properties now….
The 2nd are those buying into it who in 2 years time will realize that they may well be in Gavin’s situation….. In either case, perhaps Gavin’s story will help especially on a forum with people about to embark on this journey or have already started it……??
Did greed play a significant role in this? Yes. Did naivity play a sginificant role in this? Obviously. Anyway as the journey continues:
The $31,000US I paid for Detroit included the purchase of the property and also renovation costs, while the $18,500US for the Youngstown property also included renovations. There was an additional fee of $13,000US for by My USA Property for sourcing both properties, finding property managers and also finding companies to renovate the company, this was titled a ‘service fee’. Due to the fact that I did not have a US bank account at that time I transferred some of the money directly into CEO’s account, Andrew Allan in quantities of between $8,000 and $10,000 instalments. At the time the US dollar had just started to job and I was, as well as many others were about how far it would actually drop. I sent through over a period of months approximately $75,000AU in total, as the service fee was added onto the cost of the properties. as the US exchange rate was between 85 and 92 cents during that time and so even through the properties were $31,000 and $18,500 respectively I obviously had to pay more, due to the exchange rate. Unfortunately though, despite Andrew Allan’s promises that the renovations would get done swiftly, little happened regarding renovations over the next few months, due to the weather being too cold, which he noted. Later on Andrew became harder to get in touch with.
Obviously this appeared to be a risky proposition however I had been recommended through a friend of mine, who had given me some excellent investment advice in the past, that Andrew was of good character and was an able businessman. How wrong this was information! To put it simply Andrew misrepresented himself as an expert in field he knew very little about and is still doing this.
Anyway to continue from the last post: Over a year later I began to seek compensation for Andrew Allan's and My USA Property's lack of adequate action.
By this stage Malcolm Reid, my mentor who had recommended Andrew, was assisting me in writing the emails, like the one below. Malcolm himself had made an offer with My USA Property for a block of units down in Florida and wanted to buy them for around $110,000 US. He actually put in a 10% deposit, but never heard anything about whether sellers were willing to sell the property. or not. After waiting for nearly a year he contacted Andrew to get his deposit back, which he eventually did. In short, Malcolm was able to get out unscathed.
Anyway below is the email I wrote below over a year later seeking compensation. I have deleted some paragraphs with money amounts in order to save space.
Date: Sat, 19 Feb 2011 23:33:55 +1100Subject: My US properties
Hello Andrew,
I am seeking reimbursement due to loss of rental income. The fact that I have purchased two properties in different locations in the US and have had many difficulties is not misfortune but simply poor management by My US property. I was given your word when I purchased the Detroit property that I would be able to renovate it and sell it in a matter of months. However, due to problems regarding renovations, I was then advised by you to keep this property and sell the Youngstown property. The fact that the Youngstown property is still under renovation and has been under threat from being condemned is simply not good enough, considering that I purchased the property 15 months ago. The property has still not been rented and that is at least 12 months worth of rent I was relying on which has not been paid.
Regarding the (renovated) Detroit property, it was My US property who recommended and endorsed (property manager) Ronni Williams when I purchased the property through the company. You obviously did not put enough research into finding a quality property manager, as over the last year my property simply has not been managed. Despite my constant efforts at communicating with the US, I was not able to find out what was going on with my property, where Ronnie Williams was, or why I was not receiving rent. Consequently your company has been entirely for this, as you recommended the property to me, as well as the services of Ronnie Williams. I paid My US property to find a reliable property manager, which was part of the service your company was supposed to provide, and I was let down.
As a result of the lack of rental income that I was guaranteed to get from the two properties 12 months ago, I am seeking compensation for the lost income. Because I have been unable to sell either of the US properties due to poor management, I now have to seek other avenues for cash flow. I am planning to sell my St. Albans property which I am very unhappy about doing. However, due to the lack of cash flow from these US properties this appears to be the only alternative, although at this point in time I am finding it very hard to sell. Consequently I have been forced into a corner.
I went into these investments based on your guarantee that I would receive immediate rental income and be able to sell the Detroit property at a good profit in a matter of months. I was also encouraged by a character reference given to me by Malcolm Reid.
You have been extremely difficult to communicate with as you never seem to be in Melbourne. I insist that we meet face to face as soon as you are back from overseas to sort this fiasco out, as I feel you have misrepresented yourself and this is totally contrary to the claims you make on your website. Be aware that this problem will not go away, and if I don't receive compensation, I will be looking to take the matter further.Regards,
Gavin Hicks
OK Gavin:
You paid
$31,000 for Detroit – a single family home?
$18,500 for Youngstown – I believe a 4u?
$13,000 for 'sourcing' and 'service'.US$62,000 in total.
I think you said you sent over $75,000AUD (average about .83 on the exchange) either to MyUSA or Andrew Allan directly? So it looks like a bit of money made on the exchange rate – not much, but enough for a very nice night out, and lets face it, if you walked into a bank and demanded that much from them you would be spending time in court explaining why…
Is this all the money you had sent him so far? Any joining fees?
The $13,000 is of course interesting. This paid for Andrew Allan to spend some time online to source you a property through his extensive contacts and get you good property managers – say all up 15-30 minutes maximum online, and I think Emma would have managed that in less than 5, so I am being conservative. Did this include an amount for project management (renovations) etc? or was it just 'sourcing' reputable operators?
Did you receive any rental guarantees or at least rental expectations from Andrew Allan with these properties?
You must be logged in to reply to this topic. If you don't have an account, you can register here.
