Tax Lien/ snake oil is back?

[spaceman]

Lol

Couldn't they come up with a better deal??????

......... Our instructor was a man named James.......... A foreclosed property which he bought for $713,000 five years ago had recently been appraised at $1.6 million.



http://www.landlordpolitics.com/foreclosures.html

So the property has apparently more than doubled in value over 5 years ... sounds ok on the surface.

But any decent guru will tell you to by at a 20% discount ...which means the value of the property was (roughly) $891 .... which means the value hasn't quite doubled in 5 years .... a bit less ok especially if you belive the mantra that property will always double every 7 - 10 years which would mean most of the growth in value is natural and has nothing to do with it being a good deal.

But on the other hand if you believe this.

In advertising for the event, Eckelman promises that those who attend will "learn how to acquire real estate for only 25% of the value of the property", which Letfus admitted was a direct reference to investing in US tax liens.
http://www.stuff.co.nz/business/3929...does-US-u-turn

Well that would mean a 75% discount (which I would say covers the risk of buying mortgagee/foreclosure property quite well) .....so the value of the property 5 years ago was (again roughly) $2.85 million and now 5 years later it's worth $1.6 mill ........ all of a sudden that deal isn't looking quite so flash as the value has dropped by $1.2 mil or 42%.

Don't know about you guys but if I was trying to prove my course was value for money I think I would want to provide a better example of a good deal than that.

Cheers
spaceman

[muppet]

Property guru does US u-turn
By ROB STOCK - Sunday Star Times Last updated 05:00 18/07/2010
"They are snake oil, complete with white shoes and wagons :-)"
That's what self-styled New Zealand property guru Dean Letfus wrote in March last year on Propertytalk.co.nz, when describing the US tax lien investments being promoted by rival Phil Jones.
Letfus also posted this note: "And if you troll (sic) the various USA web sites they all say only to do it if you are an expert in an area and you can view the property prior. Doing it long distance is specifically warned against again and again."
Fifteen months on, Letfus is spruiking the very same system.
Dan Eckelman, the US expert Jones brought over to teach Kiwis about US tax liens and sell them the system used to invest, is one of the gurus presenting later this month at a seminar offered by Letfus's company, NZ Property Gurus Ltd.
In advertising for the event, Eckelman promises that those who attend will "learn how to acquire real estate for only 25% of the value of the property", which Letfus admitted was a direct reference to investing in US tax liens.
Letfus told the Sunday Star-Times his position had changed on tax liens. "We looked at it at the time [in March last year] and we couldn't find anybody doing well out of it," he said.
His earlier opposition had, he said, been partly based on his personal antipathy for Jones, as well as other factors such as exchange rate risk and what he saw as excessive costs.
But Letfus said his new view was based on a changed exchange rate position, as well as the tax lien education being sold at the seminar being delivered by Steve Goodey in New Zealand rather than out of the US.
"Because Steve's involved and people are making good money out of it, and the world has a totally different look to it, it is a good opportunity for some people."
Tax lien certificates are a product of US local authorities. When a household fails to pay local property taxes (the equivalent of our rates), the local authority may recover the debt by auctioning it off to investors. In return for paying the debt, investors buy the right to recover the money and levy penalty interest, sometimes as high as 25%. The tax defaulters are often struggling families hit hard by America's housing and jobs market crashes. The debt is entered as a lien against their homes, and should they not pay, the certificate holder can force the sale of the property.
In his March 2009 attack on US tax liens, Letfus agreed with other doubters that they were "high risk, money could be tied up for years, no guarantee of profitability, etc" going on to voice his concerns over the potential for hidden costs and investors finding the profits they end up with are "paper only equity, which may equate to zero in real dollars".
Not all critics from last year have been won over, however.
David Whitburn, the president of the Auckland Property Investors Association, was concerned about the high risks and costs of the tax lien investment systems being sold to Kiwis for thousands of dollars.
He lists 14 concerns on his website, including the costs of US accountancy services, difficulties enforcing liens and complying with US and New Zealand tax law. He also notes just how hard it is to buy the liens, which are being sold as a quick way to get rich.
Whitburn said some investors had told him of their experiences.
"Eight months later of genuine trying and they told me still no tax liens. Other investors trying every couple of days for three months have not been able to secure any deals either."
The unwitting, he said, could find themselves accidentally buying a lemon.
"You could purchase a piece of swampland, a landlocked property, a road, a tiny section with a tree on it, a footpath, etc, if you don't do your due diligence properly."
Whitburn added: "If it [tax lien investments] were so good, why can't more of the 305 million Americans purchase tax liens, rather than getting 4.3 million New Zealanders to purchase them?"

http://www.stuff.co.nz/business/3929794/Property-guru-does-US-u-turn

[David_W]

Why invest in US tax liens and deeds?

Thanks for posting Rob Stock's article in the Sunday Star Times. Rob is one of New Zealand's leading financial journalists and I was delighted that he also read my blog cautioning investors on US tax liens and deeds.

I do feel strongly against US tax liens & deeds for fellow New Zealanders, and would submit that the Securities Act should be broadened to require a prospectus and investment statement to give 100% full and final disclosure of the risks and issues surrounding US tax liens and deeds. Whilst I am aware of Kiwis over in the US doing well with US tax liens and deeds, the product is being pitched to Kiwis who have no desire to go over to the US. As Dean Letfus said on 9 March 2009 in the US Tax Liens thread last year at http://www.propertytalk.com/forum/sh...276#post168276

"I've spoken to people here and in the USA, they are snake oil, complete with white shoes and wagons".

Well said Dean as I couldn't agree with you any more.

Therefore I was surprised when I attended NZ Property Gurus in March 2010, that US tax liens and deeds were part of a hard core sales pitch by Steve Goodey (ex Richmastery Wellington franchise owner and the man who picked up the failed Blue Peak property reselling & financing venture), and plugged by Shaun Stenning (MC). I note that next weekend (24th July as the information day, 25th July as the hard core selling day) has US tax lien investing guru Dan Ekelman presenting. This is clearly a major part of the self proclaimed "Gurus" strategy, and if you purchased a $20,000 mentoring course in March's NZ Property Gurus you would get the US$6,000 tax liens and deeds course for "free".

I note that NZ Property Gurus Limited is a New Zealand registered company (company number 2394550) with Dean Nicholas Letfus as the sole director and shareholder.

With so many investors feeling the pinch still and next year depreciation claims are being slashed, the search for the next magical silver bullet is there. Promoters with admittedly very slick marketing are taking advantage of Kiwis appetite to earn more money and go into the next new thing. Therefore my advice is that if you decide to go to NZ Property Gurus, good for you as you may potentially learn something that is correct; but please don't take your credit card along. Wait a few days so you can research the product that you may feel you need after being told in a smooth sales presentation that you need it. Then assess whether you actually need it, the pros and cons of it, and ensure that you talk any decision you make over with a few knowledgeable people firstly.

DISCLAIMER: Note that this blog constitutes my personal and honest opinion of a US tax lien and deed product, and any offence caused to any person promoting these high margin educational products or US tax lien or deed acquisition system is not intended. I am not representing the Board or Membership of the Auckland Property Investors' Association (Incorporated) {"APIA"} with this post, however I have encouraged members not to purchase any educational products or packages on US tax liens and deeds for the reasons set out in Rob Stock's Sunday Star Times article today and my Blog linked in paragraph 1. This post is not intended to be or constitute legal advice, and I would encourage prospective US tax lien or deeds purchasers to speak with a suitably trained US and NZ lawyer, and also a suitably skilled US and NZ tax accountant about the full impact of their decisions prior to incurring any costs in relation to any proposed purchase.

[Commercial Dan]

All nonsense, snake oil salesmen, buyer beware!

Leftus is a very strange last name, does anyone know which country it comes from? I cannot find anyone in the world with this last name, seems very strange.

[whitt]

All nonsense, snake oil salesmen, buyer beware!

Leftus is a very strange last name, does anyone know which country it comes from? I cannot find anyone in the world with this last name, seems very strange.

Very few but there are some in world Czech Republic

http://lastnames.myheritage.com/last-name/Letfus

[Xav]

His earlier opposition had, he said, been partly based on his personal antipathy for Jones

But Letfus said his new view was based on a changed exchange rate position, as well as the tax lien education being sold at the seminar being delivered by Steve Goodey in New Zealand

Nice of Dean to confirm what we all suspected.

(ps. Having never had a post deleted before I am not sure of the protocols, but perhaps next time the mods feel it necessary to do so they could have the courtesy to send an explanatory PM, particularly as I don't see how my previous post could be in breach of the rules given Dean's own comments).

[Andrew]

Rob Stock is a great journalist with an inquisitive nature and a great deal of integrity. He is one of the few in NZ Journalists who investigates and produces stories such as these.

I have always thought that people like Phil Jones are pretty easy to see through and avoid, and yet so many don't. An even bigger worry are people that ingratiate themselves into peoples lives and portray themselves to be morally clean and full of integrity. The fact is that they are narcissistic and only interested in satisfying their own wants and desires.

I don't know Dean personally having only met him briefly a couple of times, but his actions have always put me on guard. To me this situation clearly demonstrates the type of person he is.

Peter Aranyi tried to warn people about him and took quite a bit of criticism for doing so. I actually don't blame these critics as it is very difficult to recognise the true colours of people like Dean. I worked with one for quite a while and thought he was fantastic. I defended him to others and didn't even realise when I had outlived my usefulness and the knifes were out against me. It came as quite a shock and I imagine some of the people who believe in Dean will be shocked and disappointed by this as well. I just can't see Peter getting the same level of criticism this time and I hope he in fact gets some thanks.

If you are in this camp, then start to question the denials and explanations that he will no doubt make. People like Dean will always have an explanation to justify their actions. I think we need to look through the talk and judge him on his actions.

It is great to have independent journo's like Rob Stock and independent forums such as Property Talk to get this essential information out into the public domain.

(Reading David Whitburn's excellent post previously I don't have a disclaimer, so ditto that this is my personal opinion etc)

[Baywatcher]

If you are in this camp, then start to question the denials and explanations that he will no doubt make. People like Dean will always have an explanation to justify their actions. I think we need to look through the talk and judge him on his actions.

These are some of the deals he has sent to those on his emailing lists and at his seminars over the last 4 or 5 years.

1) sections in Fiji, he had a large number under contract with huge profits to be made to on sell when the subdivision was complete. Does anybody know the outcome? The sales pitch was trust me I have bought some for myself.

2) Sections at Sponge Bay Gisborne. Again quick profits to be made before titles issued. We all know the outcome there. I was chatting to a builder from Gisborne the other week,
he said Sponge bay was very well marketed because the talk around town was only one section was ever bought by a local. Interesting i thought, the developer with a business relationship with Dean must have known this. Who was going to be buying these sections off Deans clients and students?

3) Apartments on the Gold coast where Dean had a great deal from the developer. Any feed back on the outcome?

4) Storage units in Auckland at one of his trading seminars. A table was set up in the corner of the room with the best deals available today before you leave.
How have they performed ?

This is when I stopped listening to these people as educators.

[NovInvestor]

"1) sections in Fiji, he had a large number under contract with huge profits to be made to on sell when the subdivision was complete......."

A Canadian customer that I sold land to told me there are huge profits to be made in Belize, maybe he should go there if the Fiji deal falls over.

[WBuffett]

Warning! Warning! Warning!

Before purchasing products from someone in this industry, look at their track record, research their previous product sales and how has the result for the purchaser compared to what was promised by the seller, do your research even if you have no doubts whatsoever, with the amount of money being spent and the extravagent promises being made; that little warning bell in your mind ..pay attention to it.

[whitt]

Is this a typical outcome?

http://www.propertytalk.com/forum/showthread.php?p=224511#post224511

[gateway]

2 cenrs

Yes please be aware of property educators whom oversell and overpromise. They should have a solid track record and a good & long history. If they dont give it, then run the other way. How can a person give financial advice without a good record?

A property educator who now claims to be a self internet guru is dangerous. Trust the numbers, not the person. Repeat this: Trust the NUMBERS, NOT the person.

If its too good to be true.... then walk the other away, and live another day.

[whitt]

Neil Janman did a report on buying in USA recently
http://www.jenman.com.au/news_alert.php?id=109

An extract.....

A deadly trap for Aussie investors.

by Neil Jenman

Here's a confident prediction: Hundreds (probably thousands) of Australian investors are going to lose millions of dollars in the American property market.

Right now, it seems to be all the rage, the latest fad. Buy real estate in the United States. It's easy. Prices for American homes are so low and our dollar is so high that an investment in 'the home of the brave and the land of the free' seems like a really good idea.

Unfortunately, it's not a good idea. For the average mum-and-dad Australian investor, buying real estate in America is a very bad idea. Never mind what the Aussie spruikers tell you, never mind how good it sounds, it really is too good to be true.