This is an email I received through Tan Kin Lian newsletter, just to share for the benefit for all seminar graduates....
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I received an e-mail from this concerned citizen of Georgia. I am posting the e-mail with all reference to the land banking promoter removed, but indicated below as X. Those who have invested in this project will know which is X. If you have been misled into investing in this project, and you wish to take join a group to lodge a complaint collectively, please send an e-mail to
kinlian@gmail.com.
For other people, do read the statements presented below carefully. Most land banking schemes follow the same pattern, i.e. the land plots are offered at 10 to 20 times of their actual value.
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Dear Mr. Tan Kin Lian,
I live in Jackson County, state of Georgia, USA. This is a small, very rural county about 60 miles from the city of Atlanta. X has been buying up some big tracts of land here and is proposing to develop them for housing and industrial sites, but the land CANNOT be developed -- it's against local zoning laws, and there is no water or sewer service available.
I recently learned that X sells fractional interests in these tracts of land to small investors in Asia through sales offices in Singapore, Tokyo, Kuala Lumpur and Hong Kong. These sales are at crazy prices!
As you probably heard, we had a housing and property bubble here up till 2007, but the bubble popped. Jackson County now has about a 20-year supply of building lots available, and they can be bought for $6000 - $10000 per acre. A 37-acre piece of land next to mine recently sold for $4000/acre. From a brochure I found, it says X is selling these lands to small investors in Singapore, etc. for the price of over $82,000 per acre!
In Georgia, it's hard for us to believe people would pay stupid prices like this, but here is the data from our county's own tax records showing that over 1,600 Asian investors bought this land at the price of $82,500/acre:
Here is my question: How can X do this? How can these buyers be so stupid? They will never get their money back. If these investors pass this land on to their grandchildren, it will still never be worth what they paid for it--the county has huge amounts of land that is already zoned for housing and has water and sewer available. These lands are available for MUCH less than the Asian small investors paid.
What is X telling these people, that they will be able to sell at a profit in a couple of years? Or is this a Ponzi scheme, where money from new investors is used to pay off prior investors?
In Georgia, we would like to hear your reply because we are afraid X's landbanking schemes are very harmful to our community, and they may also be harming small investors in your country.
Thank you for your help,
James
Tan Kin Lian
), to retail investors in Singapore. The amount totalled up to $23.5 million, involving 229 compliants as of today.