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  • Blue Chip related stuff here please

    Have any of you out there heard of Blue Chip?

    I had a prospective tenant (or claiming to be at least) view one of my properties recently who wasted little time before breaking into a sales pitch. This was soon followed by an invitation to attend one of their seminars.
    Some of his claims seemed dangerously too good to be true and we all know the saying if it sounds too good....

    Some of these claims contradicted what I have heard in my experience thus far in property. As I am not an accountant (Nor is he) I was not prepared to swear black and white that I was right and he was wrong (even though I bet I could quite happily explain my perspective to an IRD Auditor with fewer worries than he). It seemed to be a fruitless effort.

    This is how things went.
    He claimed, "We get $25,000 +CF per property p.a."
    Due to the fact that he was talking about using existing equity as security, I would assume that they are talking 100% finance.
    For an average new home in Auckland, I have my doubts that these numbers are accurate. But hey, I have an open mind and continued to listen.
    Who knows they may have the best kept secret in NZ!
    Both Kieran and Phill could be out of clients tomorrow!

    I asked if these figures were due to the high amount of depreciation on the chattels in these new homes and he said yes. I queried that this would deminish rapidly over the first few years and be all but gone after 9 or 10 yrs. He said thats why we have two plans. "Sell up with in the first three years for maximum capital growth or hold long term for maximum cash flow". By my estimates it would work the other way around if anything. The cashflow would dry up rapidly as the chatels values diminish. And, provided that the properties are brought in growth areas, the long term capital growth would be inevitable.

    Properties they sell are on sold to tenants but the investor gets to claim depreciation but pay no costs due to the Commercial leases they use.
    Hmmmm sounds to me like anyone buying the property to on sell straight away would be hard pressed to explain to IRD that their intent was to purchase long term income producing property.

    From what I have found so far they appear to be a group (11 or so) of companies registered with the Blue Chip name.

    The Director of these companies is listed as being John LOWTHER.

    Does anyone have anymore info regarding this group?

    Regards,
    Marcus.

    (This group sounds similar to another operating last year called Auckland Property Trust)

  • #2
    Hi all,

    I had a prospective tenant (or claiming to be at least) view one of my properties recently who wasted little time before breaking into a sales pitch. This was soon followed by an invitation to attend one of their seminars.
    Some of his claims seemed dangerously too good to be true and we all know the saying if it sounds too good....


    If I heard this my ears would have shut down!! Watch out big time! Just the way they presented themselves should cause you to conduct some very deep research.

    I will do some research and get back to you - what is your status today - have you decided or still looking at them?

    Best Regards

    Marc
    Free business resources - www.BusinessBlogsHub.com

    Comment


    • #3
      If I heard this my ears would have shut down!! Watch out big time!
      My interest would not be to invest with them. I am more interested in what they have to say re. their practices so that I can form my own opinion of what they are up to.

      One thing in particular that stood out in my mind. This gentleman mentioned that they have registered (Copyright or Intellectual Property) a method of, as he put it "Tapping into the equity of the elderly or retired to use in their investments".

      There have been and will be in the future, groups and individuals that have literally stolen life savings from those that would never have the chance to recoup those losses. Can you imagine how that would feel?

      I am not saying that this group is a scam (too soon to tell). But if possible, I will attend their seminar to see if they set off alarm bells. If any red flags are waved I have no problem with asking questions or expressing my concerns openly at the seminar.

      Regards,
      Marcus.

      Comment


      • #4
        Hi all,

        I could not locate any info on them via google so that makes me wonder as well. What you said just now is another nail in the coffin. Sorry to sounds doom and gloom but you can really get ripped off espec. in Aus and what you said about "Tapping into the equity of the elderly or retired to use in their investments". No way!

        Best Regards

        Marc
        Free business resources - www.BusinessBlogsHub.com

        Comment


        • #5
          Marc asked me if I have heard of this crowd so here is my response:

          I have never heard of John Lowther nor his group of "blue chip" companies. I cannot comment on any of his business practices as I am unaware of him or his property investment or business techniques.

          But as a matter of interest I have undertaken a little research in publicly available records ONLY and found:

          1) John is a chartered accountant and has 45 companies and trusts. The large majority of these companies were established during 2003.

          2) The "blue chip" website at http://www.arpt.co.nz/
          Auckland Residential Property Trust Ltd (est 2002)

          Directors of this company include Evan Christian (Ex high public profile companies like "Flying Pig" dotcom bomb and "Advantage Corp" and "Eldercare NZ Ltd"). Evan also has a finance company called Numeria (read more from the NZ Herald here http://www.nzherald.co.nz/business/b...on=sharemarket)

          Arpt domain name created 2001

          Arpt appears to me to offer a similar service to "Harwood Pacific" i.e. hands off type investment. Not really suitable for the traditional property investor in my opinion.

          In the FAQs on the Arpt website it states:

          "Q. “Is the investment negatively geared?”

          A. NO. The investment is structured in such a way that is has a positive cashflow. The tax losses are accounting losses not physical cash losses. We create these losses in a number of ways. An accounting loss is when there are more expenses than income. This is done by lowering taxable income through the splitting of rent into revenue and capital. The expenses include interest, rates and insurance, accounting fees, property management fees and depreciation. The expenses are greater than the income, therefore, creating the losses. These losses are offset against other income earned by the investor is his/her personal capacity."


          Looks to me like these properties ARE negative geared but have positive cashflow after tax...

          I'm not sure how they achieve "the splitting of rent into revenue and capital" though? Certainly sounds odd to me because the IRD tells me rent is ALWAYS classed as revenue. Can anyone shed any light on this technique?

          3) The lowther website at http://www.lowther.co.nz/staff.html

          Domain name created April 2003
          John Lowther certainly appears to have some of the right credentials (degrees) but I'm unsure of his history in property investment.

          John seems to be unknown in the local property investment community?

          In summary I am unsure of whether we are all missing out on some fantastic tax benefit of splitting rent into revenue and capital or whether this is just another repackaged negative gearing spin?
          Kieran Trass

          Comment


          • #6
            Thanks for that info Kieran. I will do some reading up on those links tonight. Got "stuff" to do today.

            Got to fly.

            Now where has that damn superman cape gone?....

            Comment


            • #7
              Hi all,

              Have been reading all posts, and must say I am also extremely weary, I have recently had a call from the commerce commission, who are investigating similar companies, and have come to me in the hope I may be able to provide some information on the companies themselves or the individuals that run them. I will be speaking to them on Tuesday of next week and shall post a reply of Wednesday.

              Rae

              Comment


              • #8
                Thanks Rae,

                I look forward to your post.

                More on the topic.
                A friend where I work, and his wife, were taken to a Blue Chip seminar by a "good friend" of theirs. He knows very little about property investing, and is not what I would consider the "sharpest tack in the packet either". He has a high income (by NZ standards) and his wife works also. This coupled together with the fact they are trusting, own a few properties (occupied by family members) with only a small mortgage would qualify them as prime prospects.

                By the time I learned of his contact with the company they had completed a plan to purchase their first "Blue Chip" IP. I looked through the financial plan and there is a pretty nice brokers fee attached to it. I don't have the plan on me at present so I wion't attempt to quote figures.

                My biggest concern on questioning him about the whole "deal" was that he could not explain anything about what was happening. His only comment was that his "mate" would'nt lead him astray (he did'nt express it in those exact words).

                I told him to let his "mate" know that they need more time to consider things and that they will get back in touch. This will buy some time for him (probably via me) to do some research.

                Regards.

                Comment


                • #9
                  Blue chip are in the news again.

                  Stepping stone to Blue Chip listing

                  23.06.2004
                  By ANNE GIBSON
                  A property company aiming to unlock the $250 billion New Zealanders have tied up in their own homes is about to make its sharemarket debut.

                  rest of the story can be found at: http://www.nzherald.co.nz/business/b...toryID=3574184

                  There is a bit of detail about the background of the people behind blue chip too.

                  Comment


                  • #10
                    Newcall Group Limited
                    Delayed 20 minutes - Login for live data



                    NGL
                    25/06/2004
                    ASSET

                    REL: 1040 HRS Newcall Group Limited

                    ASSET: NGL: Acquisition of Blue Chip New Zealand Limited approved

                    A Special Meeting of Newcall Group Limited (Newcall NZX:NGL) shareholders
                    this morning approved the acquisition of Blue Chip New Zealand.

                    As a consequence, the following events will now take place on 30 June 2004:

                    oThe consolidation of existing Newcall shares with one new share replacing
                    every 71.8 existing shares. (If a shareholder held 71,800 shares before the
                    meeting he/she now holds 1000 shares). Following this consolidation, Newcall
                    will have 2,500,015 issued shares.
                    oThe settlement of the acquisition of Blue Chip New Zealand Limited,
                    resulting in:
                    o50 million new Newcall shares being issued to Blue Chip New Zealand Limited
                    shareholders.
                    oThe changing of the company's name to Blue Chip New Zealand Limited.
                    oFollowing these events the renamed Blue Chip New Zealand Limited will have
                    52,500,015 issued shares.
                    oNick Wevers, John Walters and John Lowther will become Directors of the
                    renamed Blue Chip New Zealand Limited
                    oJohn Walters will be appointed Chairman of the renamed Blue Chip New Zealand
                    Limited.
                    oDavid Sun will resign as a Director.

                    Share trading
                    From now until close of trading on Wednesday 30 June 2004, Newcall shares
                    will continue to trade on a pre-consolidation basis.

                    From 1 July 2004, the shares will trade post-consolidation, that is with
                    52,500,015 shares on issue.

                    From 1 July 2004, the company's NZX trading symbol will change to "BCN".

                    Newcall director and CEO Jim Bracknell said he was pleased with the Newcall
                    shareholders' positive vote. The Newcall Board had put considerable effort
                    into finding a strong, new direction for the company and it was satisfying to
                    have shareholders endorse their proposal.

                    Mr. Bracknell believes Blue Chip New Zealand Limited is an exciting company
                    which has already achieved strong and encouraging results in its relatively
                    short history. He and David Stubbs will remain as independent directors,
                    providing continuity of representation for Newcall's shareholders.

                    "Newcall shareholders have been through a frustrating time," Mr. Bracknell
                    said. "We are delighted they have supported the acquisition and can now look
                    forward to the company's future with confidence and enthusiasm".

                    For further details contact Jim Bracknell
                    Ph +649 917 6573
                    [email protected]
                    End CA:00101824 For:NGL Type:ASSET Time:2004-06-25:10:40:48
                    Until everyone notices that the emperor has no clothes, I will remain Cashed4crash

                    Comment


                    • #11
                      Blue Chip

                      Does anyone know anything about Bluechip. They have recently list on the NSX (via backdoor listing).

                      http://www.nzherald.co.nz/property/p...ection=general

                      A couple of interest articles I have found. the first about an interesting tax structure they have:

                      http://www.sharechat.co.nz/features/...e.php/2eeac45b

                      and todays news about them buying Auckland CBD property:

                      http://www.stuff.co.nz/stuff/0,2106,3101084a13,00.html

                      Has anyone had any dealing with them? First there tax structure interests me and second, they are buying property which unless they plan to resell them, seems to be an extension of their existing business.

                      Further research and I just answered some of my own questions:

                      http://www.bluechip.co.nz/Default.aspx Especially the press release.

                      Also forgot about all the info on this site:

                      http://www.propertytalk.co.nz/posts1...blue.html+chip

                      All questions answered now unless anyone has had recent dealings.

                      Comment


                      • #12
                        I believe there has been a post or two on Blue Chip previously.....umm we have a few posts now in fact over 10,000 so it may prove a wee bit difficult to locate. Try the 'search' in the menu bar above.

                        Cheers,

                        Donna
                        SEARCH PropertyTalk, About PropertyTalk

                        BusinessBlogs - the best business articles are found here

                        Comment


                        • #13
                          Blue Chip Investments

                          Could anyone pls tell me if they have any involvement with the Blue Chip Investment company and their thoughts pls

                          Comment


                          • #14
                            Hi Karol

                            Welcome to Propertytalk.

                            The subject of Blue Chip has arisen before.

                            I suggest you look do a search for Blue Chip.

                            Regards
                            "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

                            Comment


                            • #15
                              Hi karol

                              A warm welcome to PT.

                              Muppet, unfortunately the Search functiion does not seem to work yet. I did a search and could not find the discussions we had before.

                              Comment

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