Today, there was an article on Straits Times that Brazilian property developer EcoHouse has been placed on MAS Investor Alert List.
The sales network manager of EcoHouse, Simon Dawson, did not respond to Straits Times calls or emails for more information. To my knowledge, Simon Dawson previously worked in Profitable Plots.
In my earlier article on EcoHouse back in March 2014, we knew that investors who took part in the 1 year plan that offered a 20% return were stranded.
They were given an option to extend their maturity to 3 years. In return, they would get an immediate 20% return.
Based on today’s article in the Straits times, it seemed that even investors who took up the extension option were not paid the immediate 20% that they were promised. This looks very bad indeed.
Anyone who invests in property related kind of projects should keep in mind that:
- Any projected returns will depend on the eventual selling price of the asset and the time frame taken to achieve the sale, thus there is no such thing as a guaranteed return.
- Any promises of returns should be taken with a pinch of salt as they would be backed only by the word of the company.
- If a promised return is high, ask yourself what is the margin of the project and whether this is sufficient profits to be made by all the parties in the upstream. From the contractors, the developers and the marketing agents. Is the deal too good to be true?
I could be wrong, but personally, I don’t think the investors will be getting any money back. They will probably be stuck with a title deed to a land in a far away place and an uncompleted property.
EcoHouse has come out strongly to say that they will deliver on their promises and that being place on the MAS investor alert list is not an issue.
EcoHouse : We will deliver (Property Guru)
Watch Listing isn’t a worry for EcoHouse says Chief Ops Officer (Property Guru)