Recently in the news:
Doris Tan Stephenson, a Singaporean, came up with the scheme in 2013. Formerly known as Clara Tan Lisin, the 43-year-old helmed real estate investment firms CTL Group and CTL Global Holdings between March 2011 and December 2015.
Money from the investors were pooled together for CTL Global to buy a group of properties in the US. Investors were promised returns from the profits generated by CTL Global Holdings, which rehabilitated, sold, or leased the properties to tenants in the US.
However, when the investors failed to receive their promised returns, they filed a total of 10 police reports against CTL Group.
The companies collected S$1,055,000 in total from 29 investors for the scheme in July 2013.
For their returns, they received only S$342,340, leading to a loss of S$712,660."
Full report:
With many restrictions and cooling measures imposed on the residential property market , more property buyers are looking at "alternative ways" to avoid paying taxes.
From a business point of view, it is enterprising for many seminar providers to tap on this demand pool of potential buyers with enticing advertisement claims.
Having spent more than 2 decades in sales with a majority of that in direct sales, I’ve known and used every 101 sales tricks in the book.
If you’ve been to free seminar previews, you would’ve known what I meant.
Some speakers are in fact no more than salesman than the ‘expert’ they claimed to be.
From my personal wealth background and experiences, I’ll share and debunk 4 popular outrageous investment claims by property ‘experts’.
Claim#1:
Own Multiple Properties in Multiple Countries
I suspect the real reason these speakers are saying to invest in multiple countries is to make themselves sound like a jet setting international tycoon.
They advocate ordinary folks to invest in multiple foreign countries, although they give no reason for doing so other than their contention that it is easy.
Fact:
You would’ve to learn the real estate portions of the income tax code of each country, numerous real-estate laws and customs and, worst of all, how to value properties in each country.
It’s amazing to know how these speakers know so much of many different countries they claimed to invest in… when they don’t live or born there.
Some local major developers have decided to “conquer the world” by doing their thing outside Singapore. Not everyone is successful.
About the only property investors who should be in multiple countries are owners of hotel chains and theme parks like Disneyland.
Claim #2
Own Multiple Overseas Properties with Little or No Money Down
Fact
The main reason the mass market gurus push nothing down is to overcome the objection “I don’t have any cash to invest” when they try to peddle their expensive “boot camps” or “mentoring” services.
Gurus do not push little or no money down because it makes sense for an investor. Rather they push it because it helps them market their products and services.
This is nothing more than a gimmick designed to separate broke people from money they don’t have. Yes, such techniques exist, but they are not in any way suitable for beginners — even ‘trained’ ones.
The scam would work forever because there is an endless supply of potential victims willingly to ignore the risks.
From experience, “no money down” is not the bed of roses most people think, especially for foreign investors. Just because it’s possible, does not make it probable.
Unfortunately, many local gurus have made buying overseas properties with no or little money down more important than buying a quality property.
Ordinary folks would be better off in most cases spending the extra time working a second job and saving money for a down payment instead.
Instead, ask yourself,
“How can I save or work harder for that down-payment?”
Claim #3
"Buy 2 private properties without paying ABSD", among other examples.
It is irresponsible to coach and mislead buyers, especially HDB owners into believing that there are ways to avoid paying ABSD and own more properties.
Avoiding paying taxes is a CRIME.
Fact:
In reality, the typical Singaporean cannot just count on the removal of cooling measures to invest in real estate for retirement or wealth building. There’s a degree of tunnel vision among current property buyers with cash savings and property being the “Get-Rich” investment of choice.
All asset classes’ performance will rise and fall as the current softening of the global economy and low deposit rate environment show us.
Real estate is long-term (decades) and requires much more effort and sweat to see it “happen” than just betting on price speculation and cooling measure removal
“Have I acquired enough financial education to know when that opportunity comes along?”
Often, the answer lies in your own backyard.
Claim #4
Anyone Can Play the Property Game, Become Rich or Millionaire
When property gurus peddle their expensive “boot camps” or “mentoring” services to the masses, this would make a very compelling sales pitch.
Fact:
The Wealth Wheel of Asia’s Rich and Super Rich Asset Allocation:
(Source: Fortune)
• 42% private holdings
• 35% public common stocks
• 19% cash and others
• 3% real estate
• 2% luxury assets
The overwhelming source of wealth for these millionaires was their business or high-flying career.
Millionaires that were born wealthy are more likely to invest in real estate.
Millionaires that were born rich are more likely to wish to maintain rather than grow their wealth.
The findings took out all those people who have barely scratched into millionaire status, just leaving the actual rich folks.
And as you can see, most don’t have much real estate at all, even though most probably own their own homes.
So do millionaires come from real estate?
Perhaps, but that’s only if you count those people who barely scrape in by counting their principle residence. If you exclude those people and count those are truly wealthy, the answer is really simple.
No, majority of millionaires do not come from real estate.
I’ve not know of anyone attending those expensive “boot camps” or “mentoring” services become rich or millionaire ever. Have you?
All you ever need as an ordinary investor is learn to acquire one or two really good quality properties that will put money in your pocket every month that will help pay off your home mortgage and daily expenses.
Bottom Line
The more important problem is that the novices these gurus target cannot tell which one idea in a sales pitch is a bad idea or a good idea.
There’re NO magic formulas, secret techniques or fanciful investment strategies claimed to be used by gurus to bring you from rags to riches.
For Property Wealth, as in any successful business ventures, there’s only YOUR hard work, constant education and an entrepreneurial mind-set with deep learning curves to successes and failures.
I hope you’ll discard sales advice, get sound advice on property investment through proper education, and follow that.
I welcome your comments if you’re one of those who have been ripped off with these over-claimed myths disguised as wisdom.
Dear Gerald, thanks. I have asked Singapore and Malaysian lawyers. They told me to continue paying. There is no other way.
Seek legal advice. It will cost you money temporarily but may help alleviate your long term pains paying for something that is no longer there.
I have bought a Malaysian property in johor in 2013. It has been abandoned since 2016. I am still serving the monthly mortgage instalments and will pay for next 27 years for a non existent project. There is no other way to avoid the loan? Kindly advise.