Property deals turn sour for rugby star

[muppet]

Cancer-stricken rugby star Kurtis Haiu has escaped punishment for assault and has been discharged without conviction.

Haiu was sentenced this morning at Pukekohe District Court after last month pleading guilty to assaulting property developer Glen Cooper when deals between the pair soured.

In the first of the transactions, Haiu bought 11 Billah St in Tokoroa on December 22, 2009, for $350,000. Three weeks earlier, the same property had sold for just $92,500. That earlier transaction was not shown in a valuation prepared by now bankrupt valuer Michelle Tierney for Greenfield Developments Limited, a Cooper company now in liquidation. Another deal saw Haiu buy 64 Tonga St in Taupo for $395,000 on January 21, 2010. Less than a week earlier, the property had sold for $218,000. The previous owners of the property included Greenfields Developments.

http://www.stuff.co.nz/sport/rugby/news/5531733/Kurtis-Haiu-escapes-conviction

Ouch.
Kurtis obvisiously had not done his due diligence.

[Shalodge]

http://www.stuff.co.nz/sport/rugby/n...pes-conviction

Ouch.
Kurtis obvisiously had not done his due diligence.

Hmm .. Like most Councils South Waikato has rating information available free online .. When I put 11 Billah in I get a 2009 Valuation of $175K.. I guess Kuris was relying on "proffesional advice" when he paid $350K and I note it is a block of flats so it was probably sold as a cashflow investment..

Given it was a willing buyer and willing seller and no lies were told ... at what point does the level of profit to be made from a deal become illegal? Is 100% markup too much profit and therefore can be unwound by the courts?

[The Property Store]

Tonga street is one of two streets in Taupo we find very hard to tenant; it's a lot better than it was 10 years ago but nonetheless it's bad stigma still remains. Properties will sit empty for quite a bit longer than is the norm and rent for less.
No. 64 was on the market for over 2 years, starting off at 285k until sold in January '10.
6 days later it was sold for $395k.............sold again in July last year for $185k!!!

This appears not to be just a story of a property trader making a profit; but looks like from the outside a property trader making a huge amount of money by hydraulicing the price to make themselves a profit. A property trader who goes in and negotiates a great deal and then on-sells a good deal to their client is a different story.

Though of course it would be good to hear the traders side of the story, perhaps there is more to the story than meets the eye.

[NovInvestor]

Ouch.... those prices for Tokoroa is crazy!

[The Property Store]

11 Billah sold for $92,500 and then sold for the 350k amount 20 days later;
One and a half years later sold for $108,000.
There's a bit of a pattern showing.

[Shalodge]

Now I might be wrong .. cause I have been wrong before. (When I got married I found out I could be right or happy but not both!)

I always believed that a profit had to be earned. That anyone who bought and sold commodities had to add value. I accepted that speculation was adding value by accepting risk which made it less risky for others but that the profit had to be in proportion to that risk if no other value was added.

If that is not so then there will have to be winners and losers (like in gambling).. except that we dont accept there has to be losers (especially the losers!) and therefore we try to claw it back from the winners..

But I have probably got it wrong again .. I will stick with being happy!

[speights boy]

Given it was a willing buyer and willing seller and no lies were told ... at what point does the level of profit to be made from a deal become illegal?

That is what the SFO will make a determination on.

A lie of omission is still a lie in my opinion...in this case a fraudulent valuation omitting the most relevant data.

[Wayne]

I think the issue is that there were valuations but the valuations didn't mention the previous low purchase price but highlighted what other properties sold for. Other properties in the same scam!

[Ivan McIntosh]

It would make a big difference if the vendor concerned was actively holding themselves out as finding great deals for the purchasers...providing them "advice" that was in fact utterly self-serving to the point of fraud. Note I'm not alleging that any such thing happened here, just that the bare facts as outlined could cover a very wide range of conduct.

[Shalodge]

A "great deal" is very subjective? The vendor could argue that it was and is a 'great deal' probably based on the rental income from the flats. How often have we seen that sort of formulae used in these forums?

If you looked at it from a capital gain point of view may it isnt such a "great deal".

Isnt the value of a property based on what a willing buyer will pay therefore the previous 'valuation' was way under valued? Where is the rule that says making 100% on a property deal by finding a 'mug', (I mean willing buyer), is illegal? Does the vendor have to disclose how much profit they are making?

[speights boy]

Where is the rule that says making 100% on a property deal by finding a 'mug', (I mean willing buyer), is illegal?

SFO targets dodgy valuations

In most cases, the valuations had been commissioned by the owner of the property, or property-related company, who had an obvious financial incentive to inflate valuations beyond what was commercially realistic.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10737211

[Shalodge]

I read that article thanks.. It looked and sounded like a bit of sabre rattling to me?

So valuations obtained by vendors are likely to favour them? Wow I didnt think of that! Valuations are just someone's opinion after all.

Imagine if I someone were to get a legal opinion that said they were right but then subsequently a Judge said they were wrong? Wait that happens every day?

OMG where is the SFO when you need them!

[Wayne]

So valuations obtained by vendors are likely to favour them? Wow I didnt think of that! Valuations are just someone's opinion after all.

Supposed to be a Profesional Opinion and should include relevant info not just what suits the valuation outcome desired! This has gone further with the suggestion that there be a valuation clearing house where the valuer doesn't actually know who they are working for (buyer or seller or bank) and just values as accurately as they can (as in Australia I believe). Smaller valuers are up in arms about it.

[spaceman]

.....It would make a big difference if the vendor concerned was actively holding themselves out as finding great deals for the purchasers...providing them "advice" that was in fact utterly self-serving to the point of fraud. Note I'm not alleging that any such thing happened here, just that the bare facts as outlined could cover a very wide range of conduct.

LOLZ ....You might not be alleging anything..... but IMHO from what I've read you hit the nail pretty much on the head ....$92K => $350k in 3 weeks and $218K => $395K in less than a week from the guy that's supposed to be finding you deals and helping you invest your money.

To the question of where does taking a profit cross the line into rip-off/fraud ..... I'm not 100% certain but again IMHO the line has been well and truly crossed in this case.

Cheers
Spaceman

[Shalodge]

A "registered valuation" (RV) is provided by a registered valuer? Therefore one would assume it is a straightforward process to deregister the valuer in this example? You would make a complaint to the Valuers Registration Board?

Related item here: http://tvnz.co.nz/business-news/rogu...ck-off-4293546

Its the same old problem as the real estate Agent sector faced. Self regulated industry with no balls and no integrity operating under a veil of secrecy until they were made to buck up their ideas.

Time to deliver the same medicine to the Valuers?