RESPONSE

The man behind this mob is Nigel Kibel. He's been around for years. He bobs up every now and again in some new role.

Kibel claims to have a passion to show people how to become financially independent through property. He tells us that 88 per cent of people will struggle financially when they retire.

And, of course, Kibel wants to save them from being old and poor. Yea, yea.

Like many of his kind, Kibel claims to give the best advice on where to buy properties which give the greatest capital return. Pay him a fee and he'll find a great buy for you. So he says.

But, like many of his kind, the person who gives Kibel the greatest praise is Kibel.

If you are thinking of dealing with Nigel Kibel, I suggest you ask for evidence of his success as a property advisor. By evidence, I mean people whose retirement is looking wonderful thanks to the advice of Mr Kibel.

Back in 2001, I watched Kibel dispense his advice to an audience of hopefuls. It was a woeful performance.

I wrote about him in my book, Don't Sign Anything! and have reproduced an edited extract below.

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Beware of Property "Sourcerers"

Be wary of companies that offer to "source" properties in return for a fee. As with the investment scammers, these companies will have safe sounding names. Names like "The Investment Institute".

The Investment Institute places large advertisements in major newspapers with the heading, "PROPERTY INVESTORS BEWARE – Never pay full price for your investment properties" The advertisements promise to show you how "to purchase well below the true market value" and to use an approach that makes it "impossible not to succeed".

And then, in bold type, this promise:" We are regularly saving our clients between $10,000-$50,000 by locating and negotiating properties on their behalf. We can do the same for you." "With our help, you could make a profit of up to $50,000 immediately."

The advertisement also claims, "You can buy at such a low price that you can quickly "on-sell" your property for an immediate profit. We can even handle the resale for you."

Let's take that more slowly. The Investment Institute says it will find a property for you for up to $50,000 below its value. It says it will then resell this property for you. And give you $50,000 profit. If true, this is the best real estate offer of all time. You could stop work and become rich as a client of The Investment Institute.

But why would they find you a property which gives you an instant $50,000 profit? Why wouldn't they just make the $50,000 profit for themselves? Nigel Kibel, a speaker at their seminars, explains the reason: "I do this because I care about you. It might sound corny, but I really do."

According to Kibel, some of the ways to buy properties for less than their value are: "death, divorce, distress, developers, dealing directly, disenchanted owners, debt problems." To show how easy it is, Nigel says, "Go to a solicitor and see if Aunty Bess has died."

Kibel ends the seminar with the words, "You can't afford not to use our services."

Inside The Investment Institute
"I beg you not to use my name," said one 'client' of The Investment Institute who told what happened to her and her husband. In respecting her wishes, we will call her Jane.
In 2001, Jane signed up for their four-day course. During one of the breaks she asked the presenter about another company that charged two per cent of the purchase price to find properties. The presenter said the Investment Institute charges a flat fee of $2,500. He told Jane about some apartments where the owner, a development company (Westpoint Corporation), had been persuaded to take $55,000 off the price.

Jane and her husband were taken to inspect an apartment in Melbourne. When they were asked to sign a contract, Jane said she wanted more time to check everything out. The director of The Investment Institute, Mr Paul Murphy, said they should "trust his judgment". He said he was "staking his seventeen years reputation as a financial planner/adviser," on this apartment.

The listed price was $633,000. A valuation was produced showing the apartment as being "worth" $630,000. But Jane and her husband could buy it now for only $570,150, with a "guaranteed rent return". With such "proof" that they had "picked up a bargain" and made an instant "profit" of $63,000, they paid a deposit of $50,000 and signed the contract.

Later, she employed a valuer who valued the apartment at $515,000, almost $60,000 below the price she was paying. "I had been conned," she said, using words such as "fraud" to describe what happened.

Jane was distraught. A businessman from her local Church wrote to the owners of the apartment building saying that Jane and her husband were the victims of "a scam that must be exposed".

Jane's husband received a call from an outraged Paul Murphy demanding that the sale proceed. According to notes made by Jane's husband, Murphy said, "I am warning you, I am ruthless and I will fight you to the end. And I will win." Jane was told that she could lose her family home as well as her $50,000 deposit and more, if she resisted. Terrified, she and her husband proceeded with the purchase. They even signed a "letter of apology", withdrawing their complaint and allegations.

A Not-So-Obvious Experience
You may think this could not happen to you. Such a scam seems obvious. But it's rarely obvious, at least not at first. Many well-educated and otherwise intelligent people get caught.

Most of our biggest mistakes in life are obvious only when we look back on them. When you make these mistakes, you get swept along by statements designed to trap you. The people who want to cheat you are experienced at cheating. As the saying goes, "When a person with money meets a person with experience, the person with the experience gets the money and the person with the money gets the experience."

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FOOTNOTE: On July 4, 2003, the apartment which had been purchased from Westpoint for $570,150 was resold by Jane and her husband for $497,000.

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