DESPERATE AND DATELESS

Desperate investors hoping to recoup losses made here in Australia are looking at the sometimes miraculous returns being achieved in the depressed real estate markets of the United States of America.

I’ve been fortunate to have lived and travelled right across the US of A and whilst it’s an amazing country with great people it’s not a place for out-of-towners to buy real estate just at the moment.

Scammers are working out of the United Kingdom, all over Europe, South America and right here in Australia, successfully liberating millions of dollars from unsuspecting punters who believe their intricate web of lies.

Great advice from Uncle Sam!

 

I’ve friends in the USA who’ve bought some very cheap property but they’re very experienced investors who’ve bought with cash.  They either live in the immediate area, or have travelled to and inspected for themselves before parting with their hard-earned cash.

They know who to talk to in Government to find out how much is owed in back taxes and to whom, just how far in arrears the utility charges are and who else may have an interest in the property.  They also ensure their target property is in a quality area sadly hit by bad times and they’ll have good, solid tenants giving them a 10-15% plus return.

Anyone from outside the US who hasn’t got access to this kind of local knowledge and expertise is just asking for trouble.

The Spruikers, and you can Google them for yourself (no names here – don’t want my legs broken thank you!) are selling some properties for $120,000.00 that are worth $18,000.00.  The so-called “rent income” is subsidised by the grossly overinflated price paid and many unsuspecting punters are being caught by unpaid taxes, utilities and other charges peculiar to some areas of the United States.

Use the Google search term “Buy property USA” and see for yourself.

If you think these schemes are just fine and dandy I’d suggest you give the Australian Securities & Investments Commission (ASIC – see http://www.asic.gov.au) a quick call.  They’ve been inundated with complaints from people who’ve been flown to the USA for a round robin tour of areas that contain “rich pickings” for investors and magical returns of 15 to 20%or more gross.  Many companies offer a one-stop-shop of so-called advisers, financial gurus, lawyers and others as a convenience to potential buyers.

This is not a convenience – it’s a scam!  They don’t want you to speak to the locals, other realtors, lawyers, Banks (especially Banks as they will have their own foreclosed properties they could sell you direct for a quarter of the price!) or anyone else for that matter.

Many of these charlatans will tell you that the ONLY WAY the US Dollar can go from here is UP and as a result, you’ll make a fortune just on the arbitrage or “the possibility of a risk-free profit at zero cost.”

What they don’t tell you are the risks associated with this strategy and those risks could rip large holes in your back pocket.

Who would’ve known a few years ago that the little ol’ Aussie dollar would be worth more than the mighty US dollar?  Very few saw that one coming and if they did, and you cornered them, they’d more than likely admit to wishful thinking rather than any real science.

The United States is facing a so-called “Fiscal Cliff”.  With tens of trillions of dollars in debt and a policy of just “printing” more money to try and solve its structural problems, there is a real risk that the US Dollar could weaken further.  The Aussie dollar could end up buying USD$1.20 or more, much more.

For example in January 1974 the little Aussie was buying USD$1.49.  From 1971 to mid 1979 it rarely dipped below USD$1.10 – USD$1.15 so all things are possible.

The Aussie dollar once had this ignominious tag but some think the US Dollar may well be the next “Pacific Peso”.

Bottom line.  Unless you have a trusted friend who’s lived in the USA for a long time and has first class trusted contacts in the real estate game, don’t be desperate to go there.

You date with destiny could be Bride-Zilla!

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