Bob Jones sniffs out Dunn

[donna]

Hi All,

Great article by Sir Bob Jones on Martin Dunn (RE Agent who specialises in Apartment sales) and his speculative investment Dunn Housing Fund and why it's dumb deal.

This is so glaringly a bad deal it should be renamed Dumb Funds Ltd.

Source



cheers,

Donna

[gavinc]

Yes I saw that but had already came to the same conclusion.
The City Sails guy pushing this would do very well, commissions, set up fees, closing down fees, property management fees etc all for a dismal return to the punter.

[eri]

i wonder who this is?

Recently I ran across the best- known Auckland operator in this field.
Tellingly, he told me he had now sold everything
as he considers current price levels to be absurd.

iconicity?

[cube]

The promoter is a real estate agent specialising in apartment sales and seeks $7.5 million to buy 10 Auckland houses, hold them for 11 years, then cash up.

Hope he's factored in the appropriate tax on the capital profit.

[Anthonyacat]

Bob points that out further down.

I actually signed up for reading on this fund a couple months back, because I was interested in how it was expected to operate. Where is Bob getting this information? I haven't yet received anything and there wasn't anything publicly available last time I checked.

But my god that looks like a terrible investment opportunity based on the factors he describes. Especially a complete lack of gearing.

[gavinc]

Bob points that out further down.

Where is Bob getting this information? I haven't yet received anything and there wasn't anything publicly available last time I checked.

I think I saw an article in the Herald Finance section outlining the way this would operate. Described returns etc

[speights boy]

Where is Bob getting this information? I haven't yet received anything and there wasn't anything publicly available last time I checked.

Some details here.
The comments section is somewhat critical.

$7.5 mln sought for Auckland house scheme

[Damap]

Regarding leverage this could be very attractive to people who lost money through over leverage in the last few years fiasco's. I think this is very smart marketing on Dunn's part.

[elguapo]

Leverage is the main reason real estate investment is attractive! Without it, you may as well put your money in the bank.

[speights boy]

^ First sentence agreed.
Second sentence disagree.

Still higher returns in long term mortgage free property than in bank returns.

[elguapo]

Still higher returns in long term mortgage free property than in bank returns.

Higher, but not by much, you have quite a bit more work and on top of that your liquidity is very poor too.

[flyernzl]

Similar schemes were promoted back in the 80s.

They all died.

[Wayne]

Higher, but not by much, you have quite a bit more work and on top of that your liquidity is very poor too.

but the investment asset value will increase with inflation - money in the bank won't.

[PTILoveYou]

Similar schemes were promoted back in the 80s.

They all died.

People have short memories, I'm sure there are plenty of suckers out there to buy into the scheme...

[Damap]

Tell all the debt free retired residential investors that no leverage is bad. I am sure they would laugh at you if they weren't busy enjoying their lives :-)