Is that not a nasty, nasty picture and sign? It is pretty powerful stuff...
In the spring of 2008, flush with some extra cash from a better than average work year, I started looking at some alternatives for my RRSP. Now, I had been investing in mutual funds since I was 20, but thought it was time to branch out a little bit more. Knowing that I needed to put the money away (for tax reasons mostly, as I have 25+ years until retirement) it was just a matter of WHERE/WHAT I was going to do with it.
After a bit of research, I started looking at these private real estate investment plays. I looked at Platinum Equities, Genesis Land Development, FRPL ( Fairmount) and a Concrete Equities. Most of them were not really my thing, but I was intrigued by Concrete Equities. After all, I had heard their daily radio and TV ads. Also, they are the main sponsor on CBC's Dragons Den ( A favorite of mine) so I thought I would meet with one of their reps to see what they had to say.
The meeting was average at best and the rep ( who was a VP) did not seem to like all of my questions. I think he was insulted that I actually knew what I was talking about, which was my 1st clue to get the heck out of there.
The whole
Concrete Equities plan is
ridiculous in my opinion... In a nutshell it works like this:
- Concrete buys a building for say $10MM ( Market value is $10MM)
- Concrete buys TV/Radio Ads and becomes a big corporate sponsor, in an effort to LEGITIMIZE their company.
- Concrete sells partnership units, in $10,000 increments to hundreds/thousands of "investors"/marks.
- Concrete Promises 75-94% returns in 5 years (varies per property), by re-mortgaging the $10MM property (say at $13MM) and handing out the refinanced funds.
- Bottom Line...they use your money to pay the mortgage in the meantime.
Some further research showed me that one of the senior partners had some problems with an Alberta Real Estate licensing board. The biggest turn off for me was when I found out that the CEO of this company was Dave Jones. Now I have been hearing Dave Jones WealthStreet Wealth Watch reports for a few years on QR77 ( which is an advertisement, pretending to be the news.) and everytime I hear him, I puke a little in my throat.
Dave Jones's wealth must rival that of Warren Buffet's, because he always seems to have picked the winning stocks for the day. ( After the market closes of course...) Perhaps he borrowed Doc's DeLorean and brought back some stock reports? Its all smoke and mirrors. This Jones chap is not a stockbroker, he is an "alternative" investment dealer. ( Ie. Not Stocks, Not Bonds, Not Mutual Funds...perhaps a ATM syndicate or in pop bottle empties?) Lately, it appears Dave's biggest job as CEO was to push the Concrete Equity property syndications.
Well, it looks like the house of cards has fallen. Concrete Equities has been in the
news as of late as some of their partners are feeling duped!
If you want a really interesting take on all of this, from an Inside shareholder, check out the link here. Pretty excellent blogging on this matter!
Now, although I appear bitter at Concrete/Jones, I am NOT an INVESTOR...thankfully. I had reviewed all of their info/contracts and talked to my Father-in-law, who is the Buffet in my family about what I should do? He told me to stay away from these things and set up a Self Directed Stock account, which I did. Maybe the stock market had fallen and some investments are down 25%, but I tell you... its better than losing $10-20k with Concrete (crumbling) Equities!
Thanks Pops! I owe you a beer....
