Property investment seminars
Property investment promoters, or spruikers, invite people to their ‘wealth creation’ seminars, often for free, with the promise of investment tips or opportunities. They typically promote a property investment system or market a specific property development.
The seminars are often promoted through letterbox pamphlets, on social media and by email. At the seminars the spruiker may urge you to buy investment courses or materials such as books and DVDs. They may also offer to provide the finance to buy a property or arrange this through a third party.
Property spruikers are motivated to gain money at your expense. Don’t risk your money and assets because of their misleading advice. Always get independent, professional advice before making any investment.
Journalist, Annabel Hennessy, went to eight seminars for her investigative report "Home truths of Perth’s property investment pitch from the homebuyer seminar circuit". Watch this video for her take on property spruikers and their tactics.
What to watch out for
Be wary of:
- high pressure sales tactics rushing you into decisions, signing contracts or paying fees (including discounts offered to seminar attendees who sign up on the day)
- property deals where the spruiker supplies mortgage broking, settlement or tax advice
- the suggestion the spruiker’s scheme or system is ‘government approved’ by frequent reference to the Australian Taxation Office (ATO) or Australian Securities & Investments Commission (ASIC)
- spruikers offering personal loans or credit to help you pay the enrolment fees for training courses
- property investment strategies that put your current home at risk by using the equity to borrow significant money to invest
- claims of capital growth rate that may not be independent or credible
- spruikers who side-step questions or downplay the risks and costs involved
- the promotion of a particular property development as the spruiker may be receiving a commission or have an undisclosed interest in it
- offers to buy properties interstate which you have not seen, or off-the-plan properties which do not yet exist.
Fair trading agencies across Australia have found many property spruikers cannot substantiate the success stories and claims of profits they promote.
While the Australian Consumer Law (ACL) prohibits misleading, deceptive and unconscionable conduct, you should not rely on a property spruiker’s advice. Many consumers have had to take legal action to try to recover losses after relying on deceptive claims.
Australian regulators recommend you don’t attend these seminars. If you do go, do your own research and get independent financial and legal advice from licensed professionals (such as lawyers, accountants, financial advisers and real estate agents) with their own professional indemnity insurance. If you’ve been to a seminar where there was no indication goods and/or services would be sold there you may be eligible for a 10 business day cooling-off period for items valued at more than $100. Your right to cancel any commitments made may be extended to six months if you weren’t told about this cooling-off period.
ASIC's MoneySmart website has more information on its investment seminars page.
Be wary of financing methods property spruikers often push to encourage investment.
Self-managed superannuation funds
Some spruikers sell information about investing in property using a self-managed superannuation fund (SMSF). While some experienced investors may benefit from this kind of arrangement it is not to be undertaken lightly. Some of the considerations and costs are outlined on ASIC’s SMSFs and property page.
Some spruikers promote potentially risky land banking schemes where blocks of land are offered before the land has been approved for development. If the land is not rezoned or approved for development buyers may be left with an unsaleable investment worth less than their original purchase price.
Vendor terms property sales
Spruikers often promote these transactions to buyers and sellers who are unable to obtain bank loans due to their poor credit history or unstable employment record.
The buyer pays a relatively small deposit for the property and must pay the balance of the purchase price to the seller in regular instalments. Sellers are effectively locked into an extended settlement period during which the property may increase in value.
A buyer’s name only goes on the property title when the final payment is made; only then do they have access to the equity their instalments have created in the property. Conversely, a buyer with a mortgage from an authorised lender is likely to have much greater security with the finance offered to them.
This is a high-risk scheme for buyers because their name only goes on the title of the property when they have purchased the property outright. Some rent-to-buy contracts may indicate the buyer will lose all payments made and have no claim over the property if even a single payment is not made on time. More detail on this type of scheme is on our rent-to-buy page.
Previous warnings and legal action
Consumer Protection and other agencies have released warnings about, and taken action against, individuals and companies when consumer and property laws have been flouted, listed below.
Consumer Protection – WA
- 23 May 2016 - Warning for investors about dodgy property spruikers
- 5 Nov 2015 - $70,000 consumer compensation over rent-to-buy property deals (Ms Rowan Lines / Presto Property Solutions)
- 12 Jun 2014 - Property spruikers must offer a cooling off period
- 5 Mar 2014 - Penalty and injunctions for rent to buy property promoters (Patricia and Bryan Susilo)
- 10 Sept 2013 - WA ban for property investment promoter (We Buy Houses Pty Ltd / Rick Otton)
- 27 Aug 2013 - We Buy Houses and Rick Otton - Enforceable undertaking
- 10 Jun 2013 - Supreme Court injunctions against rent to buy property promoters (Susilo)
- 16 May 2013 - Beware property investment spruikers
- 21 Feb 2013 - Legal action against rent-to-buy property promoter (Ms Rowan Lines / Presto Property Solutions Pty Ltd)
- 15 Oct 2012 - Legal action against rent to buy property promoters (Susilo)
- 31 May 2012 - “Deceptive” promoters of ‘rent to buy’ property deals acted illegally
- 9 Aug 2011 - Promoters of 'rent to buy' property scheme named – No Loan Home Pty Ltd, Filip (Fil) Butkovic and Nikola (Nik) Butkovic
- 20 October 2016 - Federal Court declares 21st Century land banking schemes to be unlawful and bans Jamie and Dennis McIntyre for 10 years
- 12 May 2016 - Sunbury man pleads guilty to $600,000 fraud – Barry Patrick
- 18 April 2016 - Former Company Director sentenced to 2 years and 9 months jail for fraudulent misappropriation – Steven William Hill
- 24 March 2016 - ASIC obtains permanent injunction against Macro Realty Development and other orders against companies associated with Jamie McIntryre
- 17 March 2016 - Liquidators appointed to 21st Century land banking companies associated with Jamie McIntyre
- 18 Dec 2015 - ASIC takes action to freeze assets and wind up companies associated with land banking schemes – Hermitage Bendigo and Foscari
- 7 Dec 2015 - Failed land banking company Midland Hwy to be wound up following ASIC action
- 20 Oct 2015 - Property spruiker found to have provided unlawful advice – Park Trent Properties Group Pty Ltd
- 19 May 2015 - ASIC bans convicted finance broker – Shashi (Sashi) Kanta Prasad
- 6 Mar 2015 - ASIC cancels Australian credit licence of property spruiking firm – Heritage Financial Solutions / David Parry Finance
- 11 Nov 2014 - ASIC review prompts Equanimity into enforceable undertaking and the enforceable undertaking
- 15 November 2018 – Property spruiker Rick Otton and We Buy Houses fined record $18 million
- 11 August 2017 – Property spruiker made false or misleading representations (We Buy Houses and Rick Otton)
- 3 Mar 2015 - Coordinated investigation results in ACCC taking action against We Buy Houses and Rick Otton regarding property strategies
Consumer Affairs Victoria
- 16 Jan 2015 - Accrue Property Pty Ltd enforceable undertaking
- 15 Aug 2014 - Real Wealth Australia Pty Ltd and Helen Connie Collier-Kogtevs - Enforceable undertaking
Fair Trading – Queensland
Requests to view enforceable undertakings arranged between Fair Trading (Queensland) and The Seminar Group Pty Ltd (13 April 2015), Dymphna Boholt (13 April 2015), and Ian Joseph Ugarte can be made from its Enforceable undertakings register page.
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