EcoHouse is a company that offers real estate investment opportunities in Brazil.
One of their investment projects offered a 20% return for a one year duration.
A couple of days ago, there was an article in the Business Times which reported that investors who invested in the EcoHouse scheme were still waiting for their money back.
The investors were offered an option to extend the maturity to 3 years. In return, they would be able to get a immediate payment of 20%.
Personally, I will usually not be interested in any investment that can offer me any kind of guaranteed payout based on some underlying investment. Whether the investment is linked to land, property, oil, agriculture, precious metals or anything.
I have seen too many of such schemes crash and burn. Yes, there will always be some explanation about why payouts are delayed. While some of these explanations could be legit, the fact of the matter is that almost all investments have many variables that are beyond control of the company. Thus I always treat any form of promised payout as something that might or might not happen.
For the case of EcoHouse, even though the company has mentioned that they do some form of currency hedging, the collapse of the Brazilian Real is probably one of the factors that has impacted their ability to repay the Singapore investors.
At the end of the day, any promise is only as good as the credit rating and reputation of that company.
More reading on EcoHouse
Investing in Brazilian social housing (Q & A on why EcoHouse is a good investment)
Singapore Investors Pour Money into Ecohouse (March 2013)
EcoHouse Refutes Get Rich Quick Claims (Jun 2013)
EcoHouse Frustrations Start to Surface (Nov 2013)
EcoHouse Stops Selling in Singapore (Jan 2014)
