This months Property Investment Magazine

[muppet]

Guess who is on the cover
of this month's Property Investment Magazine?

Yep that's right - Dean Letfus.

He is in an article about gurus that have fallen over.

Includes Don, Terry, and a couple of others.

I only skimmed the article while in the bookshop.

[Wayne]

how much of the article came from here I wonder?

[Shane D]

Can anyone whom has the magazine give us an overview of the article for those poor sods like me that are overseas and don't have access to the magazine?

Shane

[donna]

Just got it - will do....off to read it now

[eri]

certainly a lot to learn from other's experiences

i've just finished reading a book of how the saachi brothers lost control of saachi + saachi

basically the moral of their story was

"stick to your knitting"

even though that is such an old boring saying

it has great relevance every generation

as many people can't seem to help themselves

from over-reaching when the times are good

ie you can't keep playing double-or-nothing

[donna]

Here's my summary:

5 successful property gurus - Dean Letfus, Don Ha, Terry Serepisos, Patrick Fontein, Andrew Krukziener all made it big and all fell from a dizzy height.

'Overconfidence, Bank battles and the surprise downturn contributed to their downfall. Dean started his career buying 13 properties in 7 months and his final word was: "Start young, learn to buy one house a year and you'll be fabulously rich by retirement."

Andrew Krukziener's biggest regret was not accepting an offer on land he purchased a week before for a profit of $3million back in 1994.

Don Ha's wealthy living lifestyle may have damaged his relationship with the banks.

Poorly selected partners was the nail in the coffin for Terry and failed big development projects bought down Patrick and Andrew.

Other gems:

Dean says: "my advice now is to buy 20 % below, fund at 80 % meaning your effective gearing is 60% and never, never, never refinance.

"don't use buy and hold equity to fund trading or developing"

"get a mentor when you start out. If I was accountable to someone else with more years under their belt I would never have gotten into so much trouble".

[Shane D]

Thanks Donna,

There are some good nuggets of advice from Dean. I surprised he gave an interview actually.

Basically don't be in such a hurry. And don't stretch the finance so thin that there is no buffer/cushion against the bad times...which enviabily come.

Shane

[donna]

And Dean also admitted his ego got the better of him. Which sort of sums it it up - these chaps have big egos and took greater risks, ignoring the market signals, over-reaching themselves and some diversifying (which I believe happened with the Saatchi bros in eri's earlier post).

While Dean says a mentor would have pulled him in - I doubt it as his ego would not have allowed him to be mentored. It's sorting out the 'mind' first and foremost (knock the crap out of those with big egos and build up the confidence in those where its lacking) - once the mindset is sorted, then comes the goal setting, the plan, the learning, the practice etc.

....just my 2 cents worth of course

Cheers,

Donna

P.S. talking about it is part of the healing process I guess, whatever the reason is for Dean talking - others can learn from what he has to say about his experience

[Wayne]

I suspect they get successful and think they are bullet proof.

[TheLiberalLeft]

Whilst understanding why/how these guys went wrong is interesting (if only for some morbid fascination) and arguably has some level of relevance to the rest of us, even if that relevance is simply to confirm we're not making the same mistakes, I'd say that holds true only to those not directly burned by their failings.

For the creditors however, seeing these people given the time of day in the media, if even in some small, niche trade rag, gives them an outlet to say publically "we were great, but we went wrong and here's why, looking back" as if it's all ok now and in the past. I've not read the article so I'd be interested to know if any of them issued any sort of apology to those trades owed money, or any kind of plan as to how they will ever pay back what's owed, if any.

[donna]

Yeah agreed TLL - if you've been to jail for fraud and been bankrupted twice like Dean has - it's a very bitter pill to swallow for those burned by him.

Until Dean admits and believes that his situation is entirely his fault and his doing - not the market, not the partners etc and all the other external factors he says caused him to fail - I believe he will continue to do more of the same - and that's not a nice thought.

Cheers,

Donna

[Wayne]

Until I requested not to he was still spaming me with offers.

[ENP]

"The unexpected downturn" ??

Please!! Did they think property was going to increase at double digit prices forever?

And these people were montoring others?

[WaterfrontNZ]

I think it is pretty good for them to say "and part of the problem was my ego". it takes quite a lot to realise that, and i do feel pretty bad for these guys crumbling. I hope they can pick themselves back up, and carry on and possibly build it all back... If not, I hope perhaps some of us can take their place

[flyernzl]

For the creditors however, seeing these people given the time of day in the media, if even in some small, niche trade rag, gives them an outlet to say publically "we were great, but we went wrong and here's why, looking back" as if it's all ok now and in the past. I've not read the article so I'd be interested to know if any of them issued any sort of apology to those trades owed money, or any kind of plan as to how they will ever pay back what's owed, if any.

No.

learn to buy one house a year

I always cringe when I hear that said.

There is a time to buy and a time to sit on your hands and do nothing.

I went through 2007/2008 trying to buy, but nothing I could find would fit my criteria. Lying awake at night, I'd plot and scheme but nothing would fit.
These days, every night I give thanks in my prayers that I did not buy any of those deals at that time - they would have sent me broke.

There are times when the stars and planets align, everything fits and you can invest. These times come and go, sometimes lasting only a few months.
The time not to buy sometimes can last years.

To be compelled to buy an investment just because you must buy something this year is fatal.