Positive Real Estate

Huge ouch. Sorry to hear that!

 

Wow
Are these your properties or ones they have sold to suckers (I include myself here)?

 

There is one thing I am positive about and that is I wouldn't be considering Positive Real Estate.

 

@Daisycutter4 this group takes out 4-5 pages advertising in API. I think I recall you posting somewhere that you try to ensure that any spruikers advertising in API are reputable. Might be worth looking into this group. A lot of people read the good advice in the magazine and the see ads promising cashflow positive yields and see it as an endorsement from the magazine (naively, but still).

 

Went with these guys too. Bought one apartment in Newstead, Qld which in hindsight I could have made a better choice. Was sold as a 'Blue chip'. location. Building went several months overdue to complete, rents crashed during the time due to the flood of apartments there, builder went bankrupt after completing. All up, a learning experience. I also noticed they have a high turnover of their 'mentors' and staff.

The one positive is it got me into the property market. At the time I had zero IPs. While it cost me some money to join, I now have some knowledge and experience to hopefully do things better in the future.

The way I look at it, the cost to join is equivalent to what a Buyers agent might charge for 1 property. I did gain information from them, so from that prospective, it wasn't a complete loss - just be wary of the properties they offer as they get a large commission out of every sale plus their brokerage arm.

 

Hi Cactus – Speaking more generally, the key rule we apply to advertisers is whether an advertiser has been found to have acted illegally/negligently and, most importantly, by which recognised authority. This is because a large number of advisers have disappointed clients but that doesn't mean they're all unscrupulous. I've received a reasonable amount of correspondence over the year about people who've had bad experiences with investment advice, but it's actually pretty hard to define where an organisation has acted outside the law (unless charges have been brought or there's been a successful civil case against them) and where a client has misunderstood the scope of the advice they've received and acted without applying their own due diligence.
This whole thing was the impetus for us doing a two-part series in the magazine earlier this year called "What to expect from advisers" where we outlined what to look for in an advisor, what the clients responsibility is, and the steps you should take if you feel an organisation has done you wrong. Its well worth a read if you have it to hand.

 

Thanks for the response. I suppose that's a Fair approach. I also believe (having personally sold stock through groups like this before) that although you might have paid $20k too much initially, someone has done all the leg work for you, saved you countless weekends and time off work at display centres, galleries etc to complete a H&L package yourself in two parts. Many people would never get the investment off the ground (not so much people on PC) if they didn't buy this way. One boom latter and that $20-$30k is insignificant.

The problem arises where that $20-30k is actually $50k+ and in an area that doesn't boom for many years or at all. Further compounded by the fact the investor buys many properties with the same group without any real DD.

I suppose you could argue it's a little but like a Coca Cola advert. It's not illegal but it's unhealthy. Without it the magazine mightn't be able to share all the good information it has.

 

I wish I had read that before embarking on the mentoring program with PRE. caveat emptor.

 

You could say the same for tobacco?? Wasn't illegal a few years ago

 

Buyers don't need to pay too much for a property. Use a valuer, call a local agent, jump on a plane and get on the ground. Do your research and due diligence. Or go for long term less risky investment – there are plenty of unexciting investments in big cities that should stand you in good stead over the next market cycle or two. Certainly seek advice but understand where that advice is coming from.
I would encourage anyone who's interested to get a copy of our September and October Issues and read the two-part series.