Riding The MRI Construction Farcical - Bait and Switch Part 3

Hi Folks,

Hopefully (although unlikely) this will be the final episode in the Bait and Switch series. We say unlikely on the account that there appears to be no limit as to what gets said or done by the "Leading Overseas Property Company"

We have our Legal Beagle at the ready as you can see to carefully look at what we write and make sure we are being good.

Last week CaboVerde24 had a letter issued to its hosts by MRI's lawyers, demanding that they take down/remove content about them, not unusal one might think, being as almost everyone on the planet has been warned or threatened at some point for even mentioning their name.

It would appear the forum owner has had no choice but to move the content to a secure section of his site, and does express concern at free speech and the like.

One might presume that "that's the end of that" but no, just 3 days later, a new thread has come about regarding an "Urgent MRI Meeting" to save you racking your brains as to what the devil that could be all about, it is an invitiation to an "Absolutely must attend Director level meeting"

Hmm Director level eh? Could that be that all the other staff now work for Solutions Overseas, or DCC International Property, those companies that aren't related, in any way, shape or form, other than by address, offices, staff, directors and managers. Not to mention the pay per click campaign? (For those that aren't aware, when running a PPC campaign, you are not allowed to pay for trademark keywords that you do not own. For example, If we were to go and purchase the word "Microsoft" for a campaign, Mr Gates would be well within his rights to sue us to the grave. Type in certain MRI phrases and see what comes up on the sponsored ads, chances are though it will be disabled after a couple of days)

The basic premise seems to be, "Threaten everyone you can, and then start the switch program all over again" The same story seems to be the case over on the Tierra Del Sol Owners Forum who kindly posted some links to their plights, the main ones being,

Meeting with MRI thread, and,

MRI are threatening legal action against TDSO

MRI also amusingly threatened the owner of the domain investmentpropertyrumours.com who submitted the correspondance to us through the comments section which can be seen in the We Get Heat article in which we suggested that Mr Bulow and/or the MRI lawyers contact us. So far, not a peep out of them.

The latest correspondance we have had submitted from domain owner Mr Stevenson we can't directly publish, but our legal beagle says we can say that it wasn't very nice, but nevertheless amusing on the account of barking up the wrong tree, and that the letter repeatedly stated that the they (the lawyers) had been instructed that everything on the blog was untrue.

The letter itself reads as though it has personally been shouted at a secretary whilst her only copy of "Hello Magazine" is dangled over the shredder.

Mr Bulow cannot claim that he cannot contact us, he in fact runs a rather interesting blogspot blog himself, rather offensively titled "Letters From The Septic Land"

The first post on it back in march 2008 also has a very odd twist to it, the url for it is http://cjbulow.blogspot.com/2008/03/land-of-merkins-and-septics.html

On the post itself he suggests we use google to look up the title if one is not English. To save you the bother, a "Septic" is cockney rhyming slang for Yank, or American. (Septic tank = Yank)

Very nice Mr Bulow! Rather you than me writing things like that whilst living and working in the US.

As for the rarely used word "Merkin" in the url, here is a definition according to Answers.com

Noun. A pubic wig for women. [Alteration of obsolete malkin, lower-class woman, mop, from Middle English, from Malkin, diminutive of the personal name Matilda.]

Would you buy an investment from a man who talks about things like this?

The thing is though, as this new round of "Top Secret" meetings goes on, one has to question the validity of many of the "investment properties" that were offerred in the first place.

A certain Malcolm J Wright is/was on the books for American Leisure. Now that Tierra del Sol has filed for chapter 11 bankruptcy, a few things need to be asked.

Mr Wright had rather a lot of fingers in a very large number of pies, a full list of which can be seen here. Nothing really untoward about that one could say, (Apart from the Allen Stanford $8 Billion fraud case!) however.

A little more googling later and we come accross an excerpt of an SEC filing. (Securities and Exchange Commission) which is basically discovery litigation regarding securities fraud, violation of Florida Securities and Investor Protection Act, breach of their employment contracts, and claims for fraudulent inducement, against Malcolm J Wright.

Now bearing in mind that the excerpt is from 2007, and it really wasn't the hardest article in the world to find, one has to ask why anyone would do business with someone under that kind of investigation? Granted MRI were not the only people to be promoting TDS, a now defunct Platinum Properties was also involved.

Given this track record though, it does beg the question of how much due diligence was actually done in the first place? The Stanford Group of companies seems to be turning into an ever expanding nightmare which will run for years, but at least the main crux of that has been frozen and closed down to prevent more cons and scams.

Was the "Due Diligence" in the form of large commissions? We don't know. What we do know though is that commissions received will have to be paid back under the chapter 11 proceedings. That should be an interesting one!

As for libel and more threats? There is a fantastic article written by Diarmaid Condon published on OverseasCafe.com which highlights exactly what goes on in this very corrupt industry.

We have invited MRI Construction (Or whatever they are called this week) to contact us, and we invite them again. Tell us exactly which bits you perceive as libel and why, and we and our legal beagle will go through each and every one.

We have not broken any laws in the way we write or report. Google quite clearly states its position on the use of its blog platform in the following quote from its help section,

"Please note that Blogger is a provider of content creation tools, not a mediator of that content. We allow our users to create blogs, but we don't make any claims about the content of these pages. We strongly believe in freedom of expression, even if a blog contains unappealing or distasteful content or presents unpopular viewpoints. We realize this may be frustrating, and we regret any inconvenience this may cause you. In cases where contact information for the author is listed on the page, we recommend that you work directly with this person to have the content in question removed or changed."

COMING SOON!

We take a look at more mysterious goings on in the Investment Property World after a tip-off from an anonymous poster, this time eminating from the investment advisory hotbed that is the Isle of Wight!

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Vila Verde - The Great Bait and Switch - Part 1

Well folks, at last we are able to deliver the first in probably what will be a multi part installment of the "Great Bait and Switch" being carried out by one of the most infamous overseas property promoters in recent times. You guessed it, MRI.

Now to be honest, we are a little tired of writing about them, a serious change of record is required, but whilst they will insist upon arguably questionable marketing to the public, strong-arming the industry and generally stirring up all kinds of stink, we hope this will be the last articles we need to write about them. Unfortunately, given the size of info out there on this particular subject, it will be broken down into a few parts, so please be patient with us.

The topic for this post is the Cape Verdean development Vila Verde, built by Tecnicil. Under the old guise of MRI Overseas and/or Macanthony Realty International, a substantial number units were sold to the general public via exhibitions and the telephone.

All seemed well to begin with, especially with the likes of Amanda Lamb waffling on about it at every opportunity, and the alleged promise of direct flights from every conceivable airport according to MRI, and the "tying up of rental agreements", (which of course could only be fulfilled if you took their furniture packages, and their lifetime after sales package) most of which clients were reasonably OK with spending the money on.

All of a sudden though, things seem to have got a little sour. It all started around the beginning of this year, we began to receive the odd e-mail and comment about meetings being arranged by MRI to discuss the future of their off plan properties.

Of course, these meetings were not publicized to the general public, unlike the overseas property expos of old, one has to wonder what's going on there?

Well, judging by the barrage of activity on the few forums that haven't banned the use of MRI, Macanthony Realty, or any of the other variations on names the company seems to have (that aren't connected in any way at all of course!) it would seem the following is happening from what we can gather.

Basically, MRI have been suggesting that Vila Verde will not be completed, even at best, complete with substantial delays, and that developer Tecnicil is in financial trouble and about to go bankrupt, as a result they have been suggesting to clients that they should forget the Vila Verde investment, and conveniently switch to a project on the Silver Coast in Portugal, or perhaps consider something in Bansko, Bulgaria, of course, offering a "substantial discount" in the process, as an apparent "goodwill gesture" BUT (and here is the real sting) it just happens that you need to add more money to the deal!

Hmmm, so lets get this right, My deposit of 30%, (or whatever I might have paid in installments) is gone? Well according to MRI, yes.

And this new investment, it's a better deal? Well of course, flip now and we'll do you a huge discount, and no-one needs to say anymore about it!

Now it is unclear as to whether it has actually been stated beyond doubt by MRI that Tecnicil are filing for bankruptcy in a bid to get clients to conveniently forget about their investment with them, but according to the forums, it would suggest it is being heavily implied.

What is clear when you actually look around, is that Tecnicil are alive and well, keeping the public informed as best they can with a blog, http://vilaverde-resort.blogspot.com/ and have publicly stated a couple of interesting things;

"Mark Twain once had to write: "Rumours of my death have been greatly exaggerated" or even "This report of my death was an exaggeration" depending on who we believe had the original quoted properly.Whichever is true it must have been quite a shock for Mark Twain to have heard that he had been reported dead! Here at Tecnicil we were equally surprised to hear last weekend that we were going into liquidation, or was it that we had gone into liquidation...?Whichever of the rumours you have heard, we can assure you that Tecnicil is financially sound and Vila Verde Santa Maria will be finished."

followed by;

"With the disappearance of the larger real estate agents in the overseas property industry, we at Tecnicil have had to pick up the task of client communication. No small feat when you think that MRI alone had had dozens of customer service people to deal with the workload. Sadly these are no longer interfacing for us so we have to do it."

Good for Tecnicil, considering they are a fairly hefty developer to say the least, and are involved in infrastructure construction, hospital building and the like, as well as having various connections to the government through board members, on top of having connections with the national bank, are they really that likely to be going under? Slow, maybe, the next Bradford and Bingly they are not.

So where does all this leave everyone with deposits on Vila Verde?

Well, the suggestion that you should write off your deposit as a loss and wander into another development at a "discount" might sound attractive to start with. However, a few things to consider.

1. How real is that actual discount?
2. Is there any reason why the next development might not run into problems? After all, Vila Verde was the best thing since sliced bread!
3. Is there any chance of the Vila Verde contract coming back to bite me in the proverbial?

Well according to the forums, the properties in Portugal are being displayed as P.O.A. (we would link directly to them on the various MRI/DCC sites, but that isn't allowed!) to see what we mean, the thread in question can be seen on Caboverde24 (see the first post on the link)

The question has to be, how should a discount on something that has no price be perceived?

As for the new development being on offer running into problems, well there is absolutely no reason at all that they won't, or, that this same farce will re-emerge again in a few years time.

Lastly, the knock on effect of walking away from a contract? Well, lets take a logical approach to this one.

Lets say I am a developer that is well connected to the government, and you have entered into a a contract with me. I have sold something to you at a reduced price because you have shown faith in the project at a very early stage, and the contract you have signed states that I will pay you penalties if I am late finishing, and also, in that small print somewhere in return, you the buyer are obliged to complete the final payments to me when I deliver the finished project.

Granted, we have not seen one of these contracts from the developer, but we are going to hazard a guess that there is not a clause stating that the buyer can walk away and forget it all mid way through the build. It's a contract. There are sections that have to be appeased by both parties.

There are already a few cases of people walking away from off plan deals, thinking "that's the end of it", only to find they end up being chased by developers, and potentially having embargoes issued against their home residences for property they don't even own yet!

It goes without saying that MRI have been known to blackmail clients into paying fees for things they thought they had already paid for as we covered in our furniture scam article a while back. Macanthony are well known in the industry for demanding their commissions at the point of deposit by the client, so they lose nothing by spreading rumours of developer bankruptcies, only to gain on the other side by flogging some heavily overpriced "bargain".

Oh, and guess who builds these overpriced bargains? MRI Construction.

Now who would have thought that?

For the regular readers you will notice we haven't bothered with the usual disclaimer, readers should make of this as they will, and base their judgement on actual facts, and the risk they are prepared to endure. (as opposed to go to a dog and pony show seminar and be pressured into spending more money)

As for rumours and libel? Well, We are not suggesting that any developer is in financial trouble, nor are we trying to manipulate the forums we can't control, or threatening people that say nasty things with huge lawsuits.

If you have an opinion about this situation, or any other that we write about, please feel free to comment on the relevant post. We do read them all, but please do not post personal details or insults, we cannot publish them.

COMING SOON!

More of the same, Bulgaria this time, apparently again, another string of clients has been told their constructor has gone under, and that investing in a shiner yet strangely more expensive property on the other side of the country is a far better bargain.

If you are reading this though a feed reader or on another site and would like regular updates as they happen, click here to get to our Investment Property Rumour home page, look for the feedburner box on the right hand side of the page, enter your e-mail and confirm and then with the appliance of science you will receive updates by e-mail as we publish!

To see a very active forum about Vila Verde and other developments in the region, go to CaboVerde24.com

To see info about Tecnicil, pop along to their blog, Vilaverde-Resort

Brazil Boom and an End to the Emirates?

A very quick post here tonight folks! It would appear some of our suspicions here at the Investment Property Rumour Mill are starting to gain some momentum after a conversation last night with some good friends in the industry, and also a few phone calls that has bought a couple of things to light.

We received a call earlier from someone working at one of the largest developers in the Emirate state (and beyond) claiming mass lay offs of staff were underway! We won't name the company specifically at this point, but it really is rocket science to figure out who. (The developer in question is known for its culinary expertise amongst other things, we have written about them in previous posts)

Infamous for starting, cancelling, restarting, doing the hokey-cokey and no end of other things besides, the rumours from within from 3 separate sources so far would suggest that mass downsizing is going on, culling of staff is at rate of knots only seen at old peoples homes when the reaper is in town. Rest assured, the moment we have independent confirmation of this from somewhere, we will post it for all to see.

The conversation with old friends last night threw up a couple of points which make a great deal of sense, as well as confirm what could be the end of a very short era for the Emirates as a whole.
A bit dis-jointed as it's going to look here, we will try to convey the point as best we can.
The discussion itself was about Dubai and the Emirates in general, my friends had been in conversation with some very prominent banker types in the middle east recently. The bankers when asked where the future of property was and was not for the foreseeable future.

On the positive side, Brazil came up. Now we know that a lot of peoples eyes are going to roll at that one, and cries of "that old chestnut" can already be heard. However, consider this.
Brazil is somewhat larger than just Natal and Fortaleza. (The only places that most of the west has heard of.)

Brazil has long been a producer and user of Ethanol, importing little oil of any kind. In the past 18 months it has discovered one of the largest oil fields and one of the largest gas fields ever recorded. This puts them in a position to export heavily and given the price of oil and the lack of it, the last man with a pot of oil will be a wealthy one!

Brazil has an enormous populous, infrastructure although crude in places, is nevertheless in place and scalable.

Brazil has now made 100% mortgages available to nationals. Granted they are not for high amounts, but the increase in commerce internally, and rapid expansion needed soon internationally for export and tourism, the country finds itself with a very large and expanding middle class with money.

On the negative side of where the future of investment property lay, Dubai and the Emirates was the response.

Why? Several reasons.

Infrastructure. Understand that the Middle East is still classed for the most part as a desert. Sand gets everywhere, nothing lives there primarily because it can't survive. Putting a bunch of shiny revolving buildings on it doesn't make it a great place to live, nor does it ensure the future of entire country.

We could put the office cat in a spacesuit. It does not however mean that the cat can firstly fly a rocket, nor does it mean that he can survive in space. Regardless of how much money we throw at him.

With all of the engineering skills and advancement in the world, subsidence happens. You build on sand, you will get some sinkage. Fact.

Attitude and/or ignorance. You only need to read the statements made to the press that we reported on from one developer saying there was no recession and prices would never fall.

Like it or not, and the Rumour Mill will go on record here, Property prices in the Emirates are going to drop. Hard and fast.

We believe by as much as 60% in the next 12 months or less. Sound like a wild prediction? maybe, but remember, we don't publish anything we haven't researched well, cannot prove, haven't heard on good authority or don't actually know.

If you have invested in the Emirates, stay for the long haul, it should recover. If you are in for the get rich quick, you've done your money. Expect to here the phrase "Enchala" (Arabic for "God Willing") when it comes to expected completion times, rental projections being met, and re-sale opportunities.

COMING SOON!

Shiny pictures of yet another Costa del Sol behemoth agent closing some of its offices and downsizing.

A report on investment property forums. Are they worth the web space they occupy? Can you trust the opinions in them? We take a look at some of the best and the most notorious and ask if they serve a real purpose and if the owners are being responsible with them or have an ulterior motive.

New services designed to help the investment property owner as opposed to relieve them of all their money.

Ocean Estates - The Poseidon Adventure?

This week we take a look at what Ocean Estates is (or perhaps isn't) up to. As the title would suggest is a tale of much peril and trepidation.

Ocean Estates has been around for some 22 years under different owners and guises, of late though, it all seems to be coming to an end with their application for voluntary liquidation of the main business.

A different story from that of Viva Estates that we reported on last week with Ocean having had the foresight to spread its wings into the international market much quicker than its main rival of the times.

The problems that have finally bought it all to a head of late however are interesting to say the least. Earlier this year, there was talk of a takeover of Ocean Estates by none other than Hestiun, "Official Leisure Property Development Partner of Manchester United" under the name of "Royal Resorts"

After much negotiation and book checking however, this threw up a little problem, an outstanding tax bill dating back several years, as a result Hestiun quite rightly pulled out. Well done Hestiun. What has been left behind though is a bit of a mess to say the least.

Ocean still has its' Thai operation running. This was a separate entity from the very start, does very well and provides a fantastic service for clients in Thailand. On trawling around the forums, speaking with a number of agents and ex employees, Ocean Estates Spain does seem to be in rather a pickle.

In a nutshell, Ocean has filed for voluntary liquidation after the outstanding tax bill having been thrown up be the Hestiun/Royal Resorts audit prior to the offer to buy out. The tax bill in question is apparently in the realms of 200k or so. (Not a lot in the high flying world of international real estate!)

Whilst the proposed buy out was being drawn up, much of the Ocean data and sales material was moved over to the new operation, along with a number of members of staff all smiling as they went. At the same time, all of Oceans referring agents (Lead generators) were all being told "All is good, commissions will be through shortly, send us your invoices and we'll get them paid"

Needless to say the situation now for many of those agents is not good at all. The initial filing for liquidation took place around April time this year. To date there is still no resolve. Some agents were asked to "keep sending leads, they will get dealt with" When pushed for payment by agents, Ocean eventually declared the liquidation filing (After requesting invoices for payment) and simply threw up their hands saying it "Was all in the hands of the courts now" Of course, you can't submit the same invoice for payment to another company whilst it's being held up by the courts, so many agents are not thrilled at all.

The Public have not been amused with Oceans antics either, looking at the very popular forum on Eye on Spain there are a number of very unhappy folk, some of which are also ex staff.

Will Ocean survive? Unlikely. As slow as Spain can be in processing paperwork and filings for this kind of thing, if they were able to trade out of the hole, they would have done by now. Ocean is down to one main director as far as we are aware, Paul Blagden who busily fields the calls from agents wanting payment. The Banus office is still there (just) but really just waiting for the final wave to crash over it and drag it to the bottom of the sea.

Why has this happened? The tax situation in Spain is open to much interpretation to say the least having several loopholes in it. What you cannot do though is just say "Oh we didn't know" and expect the tax man to say "Oh that's alright then"

Next week The number of stories out there are extensive to say the least, we still have Red Hot Homes to cover, (We are awaiting confirmation on a couple of things before we bring you that story, please be patient) Polaris is being looked at as we write, and we are compiling something about the various forums out there concerning the real estate industry, both public and insider. Can they be taken seriously? We shall see!