Dear Sir,
This project was brought to my attention and is currently being sold in Singapore as a land banking project in Hawaii financed by a company in Singapore.
My question is, is this project a legal one? I have been told the company selling the land to investors is not governed by the MAS and does not need to meet any of MAS guidelines. Is this possible? Is this project a scam?
I have some URL's below which show information on the project.
REPLY
Read my blog. This type of investments should be avoided. Do not invest in them.
You can ask MAS or the Ministry of Law on whether this company breaks the law. I am not the person who decides on such matters.
I remember seeing in newspapers Reform Party offering free legal service. Those affected land banking investors might want to gather and seek advice from them.
ReplyDeleteCDCs, Legal-Aid and Singapore Women's Lawyers Association also offer free legal aid.
ReplyDeleteI find this advice from a financial consultant on a cnbc weekend programme useful:
ReplyDelete"it is better to do nothing then to invest in something that you do not understand."
I understand there are differences:
ReplyDeleteBe advised that Pre-Development Land Investment is different from those so called LandBanking companies who market Plots of land commonly in the UK.
Research, Research!!!
Anonymous March 23, 2010 11:13 AM:
ReplyDeleteYou're wrong. Land banking IS buying pre-development land. Investors hope to make money when local authorities give permission to develop the land e.g. commercial and/or residential purposes.
The scamming comes in because of huge information asymmetry --- the land banking company knows a lot of info and truths which it will not tell investors. The company will not open its books to investors. How much they initially paid for the land? Do they have their own interest to see the lands acquire development rights? Do they know local authorities information that is prejudicial to the land? Etc etc.
So land banking companies will mark up the prices of the land by 20-50 times when selling to you. They hide info given by local authorities who already said no chance to develop the land (especially UK). They cherry-pick the results of some previous projects to show how good they are. Is it for ALL their previous projects? HAVE YOU EVER THOUGHT OF HIRING A LAND SURVEYOR TO DETERMINE THE MARKET VALUE & MARKET POTENTIAL OF THE LAND? COMPARE TO THE PRICE THE LAND BANKING COMPANY IS ASKING.
What is the current market cycle for land in that region of that country? Are land valuations rich now? What drives the local economy in that region? What are the local laws pertaining to land use and development? Are good results merely due to increase in local economy? Just like rising tide lifts all boats. Just like Canadian land around Edmonton doing well from 2003 to 2008 due to housing boom in US (major supplier of lumber) and later due to escalating oil prices (canadian oil sands).
Land banking companies will NOT tell you all these. They are basically marketing & sales companies. They buy cheap land and sell you stories and hype, in order to sell you at 20-50 times what they paid for the land.
Make no mistake. It is all about real estate know-how, in that particular country's region. Seasoned real estate investors will NEVER buy from these land banking companies.
The LandBanking companies see their BOOM$$$ when marketing their land which they paid for peanuts & they are the ones laughing all the way to the Bank, whilst the new LandBank investors who paid inflated prices, will carry the Baby & proudly calling themselves 'LandBanking" investors!...........some are now crying foul and coming to this Blog for HELP!
ReplyDeleteWe need expert LandBanking Consultants to rebutt on this issue before we come to conclusion!
ReplyDeleteThere are some genuine LandBanking companies and there are investors who have benefitted and have re-invested in some of the earlier land Exits!
BTW lots of "sourgrapes" too!
I received a call on land banking recently.
ReplyDeleteMy point: there is a big marketing push for land banking now. So beware while it is quite tempting when your good friend recommends it to you.
This may be the next bomb and investors ended up in Hong Lim Park cursing MAS...
Dear Anon 3:40 PM
ReplyDeleteWhat is "genuine"? From what I understand, the co receiving alot of complaints is "genuine". People do get back $$ as read from the forum in HWZ but it was after all sorts of hassle...
Y go thru so much trouble when there are simple investments in the market?
I would like to hear the FACTS from expert LandBanking Consultants too but not salesman.
There are some genuine LandBanking companies and there are investors who have benefitted and have re-invested in some of the earlier land Exits!
ReplyDeleteThere were some Madoff investors chose to re-invest all their "profit" as well. They were extremely happy and rich on paper right up until they lost all of their money.
While I agree some regulation is needed by MAS, the individual should also perform their due diligence to research on the investment product.
ReplyDeleteIt is afterall your own money and it is not a small sum. Don't invest if you are not sure.
I call them The-Merry-Go-Round Industry......................
ReplyDeleteThe problem in Singapore is that Job Hopping is common these days
eg.
Insurance Agents to Property Agents to Oil&Gas (Ex-Oilpods)Agents to Financial Consultants to
MLM Agents to Marketing Agents to LandBanking Consultant/Agents....
all in the name of SALES!
Anon March 23, 2010 3:40 PM says:
ReplyDelete"We need expert LandBanking Consultants to rebutt on this issue before we come to conclusion!"
Land banking experts do not work for land banking companies selling plots and acres to retail investors. Experts work in reputable property consultancy firms or property developers like DTZ Debenham Tie Leung, Savills, Capitaland, CDL, SC Global, Jones Lang Lasalle, Ascendas, Singapore Land Authority, even JTC and some say HDB also.
All others are just MARKETING & SALES PEOPLE, whether their name card says consultant, or executive, or manager, or senior manager, or managing director, or director, or CEO, or Chief Investment Officer, or Chief Property Officer.
There is an article in BBC that retirees kidnapped their FC for losing their savings in property investment.
ReplyDeletehttp://news.bbc.co.uk/2/hi/europe/8583273.stm
LandBanking in Hawaii?........No thanks as Earthquakes /Vaolcanic Eruptions and Tsunamis will haunt your land investments!......Better in Sentosa.
ReplyDelete