Frank Valentic fined and suspended

Update to this post from late 2015 Frank Valentic Block-Busted! and putting it in a new thread as I thought readers might be interested to know the following:

For acting dishonestly and unfairly in his "group-buying" purchases (amongst other charges) celebrity BA Frank Valentic from Advantage Property Consulting has now had his RE licence suspended for 6 months and has had penalties issued (though curiously I would have thought the penalty amount here is public information, as it is here in NSW, but VCAT didn't disclose it).

Block judge fined and suspended

I wouldn't now be surprised if clients of his who paid for a "buying service" (a whopping $13,750 to only consider one property that he was offering - now that ain't cheap!!!) got together for a potential class action seeing as they were also involved in the potential coercion of illegal backdating of documents....

 

So he agreed to on-sell some pre-purchased apartments and then charged clients 13.75K each for the privelege of taking them hook, line and sinker?
Must be frustrating knowing there are shonks out there.

 

Are you suggesting that a REA might be dodgy?

@Jacque - is/was he a member of REBA?

 

Looks like it's not too hard to be a judge on the block. Why don't you guys have a go? @Jacque & @Propertunity ? And @Scott No Mates, why not?

 

@Propertunity - so does that mean a company which engages in leasing cannot act as tenant advocate if the company is sufficiently diverse?

 

As member buyer's agents of REBAA, we do not have a "list of clients" to bring to an overpriced, hyped property full of furniture (that depreciates away to nothing very quickly). Rather, we take a brief off a client and then go and look for that particular property after researching every candidate property.

 

Hi Scott, would you care to expand on that a little please? REBAA is for exclusive buyers agents. Some members also have Property Management departments.

 

Hi @Scott No Mates as per Prop's post Advantage couldn't be a REBAA member as they list property for sale eg: 2/6 Osborne Court Hawthorn Vic 3122 - Apartment for Sale #121423674 - realestate.com.au
Exclusive and independent BAs do not list real estate for sale. They do not sell real estate.

As you'll note in the ad, they state "This property has been purchased as part of our Group Blocks strategy where the whole block has been purchased. For a full property report and further information regarding our Group Blocks strategy, please visit our website..."

So... if they've purchased it already, why are they advertising properties in the complex now for sale?
Who is the vendor?
Who are they actually representing?
If a potential purchaser were to approach them for this particular property that is for sale (for example) would they be required to pay a "consulting fee" (as in this poster's experience @Joe Poh from my previous thread
Frank Valentic Block-Busted! )

So many questions, and so much potential room for conflict. I'm not surprised he's come undone and has crossed the line. What makes me mad, however, is the fact that he refers to himself as an independent buyers agent on his website. He is anything but.

 

Totally agreed @Jacque - a small agency claiming to be independent doesn't work however does the same apply for a larger/multinational where you can justify "chinese walls" be they paper thin or concrete?

 

Hi Scott
It's a good point and I think it depends ultimately on the size and location of the walls
Follow the trail of money however and if it all benefits the same owner/company then there's your answer...

 

Well, looks like 'business as usual'

1-8/6 Osborne Court Hawthorn Vic 3122 - Unitblock for Sale #122119722 - realestate.com.au

 

The question I have could a BA first be buying the block, then on selling each unit at a marked up price (with or without a reno taking place) + then adding a consulting fee. BA helping clients buying the block on behalf of all clients wanting to buy into such block at a discount is one purpose of a BA. If you end up paying equal or more to market value, then where is the value for the end buyer? and who is benefiting the most. All obvious questions but I needed to spell them out Potentially massive amount of commissions and consulting fees going onto such deal if you add up commission selling agent got, commission BA got to onsell and consulting fee BA also got (assuming separate again). This can be 10+% of original price, which means would need to buy 15+% under market value for the whole exercise to be a fantastic deal for the buyer, in which case you would need a highly motivated desperate immediate seller to begin with for this to happen.

The part may continue if you're obligated to use the same BA company as PM.

You could drown in a gravy train like this

To be fair I invite a previous client of a deal like this to share their figures of the brilliant deal they got through such a strategy. It would be great food for thought for all of us.

In theory block deals attract a smaller pool of buyers, therefore potentially more room to pay a lot less. Has this idea been proven or not always the case?

My comments are completely generalised, hypothetical and not directed to describe anyones way of conducting business.