A recent headline article published in the latest Financial Mail written by Ian Fife called "The big property clean-out" is causing ructions in the residential investment sector. The article identifies a number of property companies, trusts and individuals who were casualties in the current property market. Included in the article on-going court case of the liquidators of a particular property trust called the Surf Trust with a particular Werner Britz as trustee which held 5 investment properties.
Treoc has been identified as the culprits of the downfall of the Surf Trust and have been accused of fraud by the liquidators namely a particular Mr Olivier representing the liquidators. Werner Britz held a property portfolio worth R2,9 million with a monthly income of R17 000 and a monthly shortfall of R33 000. Treoc apparently handled the bond applications for the trust and are now asked to justify the application based on Werner Britz's personal income. Many people forget prior to the implementation of NCA in June 2007 banks were throwing credit cards, loans and refinance at all and sundry to get their numbers up.
Coert Coetzee chairman of Treoc decided that enough was enough in his "Coert is nou gatvol" and in his blog on lightminded.com he lambasted the people who he believes has destroyed his reputation and challenged his methodology. This has created a wave of approval from many but also a lashback on those that disapprove of his methods.
The general media is now using one negative case to disprove a property investment methodology which has also made many people extremely wealthy on the other hand. This is sensationalism in its purest form. The general media will do anything to get readers and they know that good news does not sell but bad news does. The more dramatic it is the better it sells.
Treoc as a property education company along with other education companies like P3, YDL, Hannes Dreyer have a successful track record in creating many new property millionaire's. Robert Kiyosaki of 'Rich Dad Poor Dad' fame has been doing this for over 30 years in the US and elsewhere in the world. Essentially these educators have found legal loopholes in the system to allow investors fast track their property investments in achieving financial freedom within a 5 year period in the last boom. They have also got investors to embrace property as a powerful investment vehicle particularly in South Africa where only an exclusive wealthy few were privy and beneficiaries to property wealth. Many people became millionaires through property from the last property boom. South African's invested in poor performing RA's, unit trusts, endowment policies that robbed investors of millions. Property was the one vehicle that could put cash into your pocket and grow in capital value.
Property investing like any business has to be run and managed well by the investor and also has its risks.Yes you can lose money if you invest without the proper education, grounding and perserverance. While there have been many successful investors who applied various types of methodologies in growing their portfolios legally there is also others who allow their emotions to run away with them. Not all investors are successful and many investors do lose money and learn many lessons along the way. Some that lose feel that there is no way back and that it is easier to play the blame game than take responsibility for their own investment future. They give up and never invest in property again and then blame the investment vehicle.
How can licenced financial planners sell you dud investments while investors and not take responsibility? The question is who is responsible for your financial freedom and future? Is it your financial planner, your accountant, your attorney, banker or estate agent? Bottom-line no matter who you take advice from you are the only person you can point a finger at ? It seems that Treoc situation will be an on-going debate and a lesson to those who probably did not take responsibility for themselves...