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Diary of a distressed property investor, Part I

Diary of a distressed property investor, Part I

It was a quick sale, and I fell for it. I bought the property. Now I’ve got the fourth installment staring me in the face and no financing. Now what?

December 24, 2008 9:42 by

I was the perfect candidate for her sale. I didn’t know enough about the ensuing credit crisis to suspect that there’d be trouble in Dubai, and I had enough faith in the economy to feel that even if there is trouble, Dubai would help its investors.

By the time summer ended, Ramadan began. Everyone in the Gulf knows that you’d be hard pressed to get anything done during Ramadan. So I waited until the end of September. And that’s when the crisis hit.

It’s been seven months since I bought the property. I have paid the third installment, and like many investors, I am dreading the fourth installment. As it turns out, the developer has not been approved by the bank, yet they continue to assure me that the approval will come through.

But, like other investors, I am exasperated by the developer’s answers to my questions. I don’t want to be placated. I don’t want them to tell me that “I don’t need to worry;” I want them to address the issues: they haven’t offered the financing they promised, and they are still expecting me to pay the installments. My last conversation with them ended with a “please be patient.”

I’ll be patient as soon as I know what will happen to the money I’ve ploughed into this cursed property.

And that’s when I decided to call a lawyer. I needed to know my rights, if I had any. He advised that I go to RERA since it’s the governing body that approved the development in the first place. I’m getting my papers in order and heading down to the land department in Deira next week. I don’t know who I’ll be speaking to, and I don’t know if they can help, but it beats waiting for the developer to do what it promised.

I was advised not to tell the developer that I’ll be visiting RERA, which is why I can’t mention their name or the name of the bank (apparently, it might make them angry). But as soon as I figure out my legal rights, I will.

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  1. TONY SALIBA on December 24, 2008 2:47 pm

    Serves you right , for being so greedy ! poeple from europe with flip flops come here and get rich and start living a tycoon life with endless partying ,,,this can never happen anywhere else and anyone with minimal amount of economic knowledge knows that he should not have a liability outweighing his net worth an at such an incredible difference .

  2. DG on December 24, 2008 3:11 pm

    Try asking for your money back from the developer and cancelling the sale ? or are you still out to make money flipping ?

  3. a on December 25, 2008 9:39 am

    Forget flippers; I have bought into one of the nicest apartments and can afford to make all my payments. But what is the point if the government takes away my freehold visa status? Surely they must be accountable.u cannot offer investors a certain right then turn around and say “well actually…” Also you cannot expect people to invest in your country as end users only; its an investment. A home is the single largest investment you will ever make. Are they expecting us to buy their apartments live here and if and when we leave get less than we paid for it? And if the laws change to my detriment what is the point; i am much happier back home thank you very much! atleast i have rights back home!

  4. TooBad on December 25, 2008 10:43 am

    You should have known your rights before plunging into the great property rush. Its very unwise to make business what like others do.
    Always remember, a person fails when he does business by looking at others, he would never fail when he does something of his own.

  5. Austin on December 29, 2008 10:07 am

    It’s difficult to feel any sympathy when the writers actions, of her own admission, were driven by greed.

    The property market in Dubai has enjoyed meteoric growth which was clearly unsustainable even without the global economic woes which are currently prevailing.

    The (unwritten) small print here is values can go down as well as up, and if it looks too good to be true then it probably is.

  6. Faith on December 29, 2008 10:14 am

    While I sympathise with you, you remain a victim of your own creation. Flippers like you bloated the market and created Dubai into an arena of greed. This whole thing has not only affected the property business, it has affected the lives of people who never invested and were simple workers around town.
    God has his ways of balancing things and this is an example of it!

  7. Jannat on January 4, 2009 2:39 pm

    The Higher you climb the bigger the fall

  8. nittoo on January 4, 2009 5:11 pm

    Bad luck the timing went wrong you should talk to the developer and ask him if he can move your money to property which will be ready soon so that you can rent it.

  9. rex on January 11, 2009 12:37 pm

    How can anyone sympathize with such ” investors”…Indeed as Austin says markets can go up and down. And the distressed investor had no plans at all to use the property for what its meant for : living in it. So it was purchased for only one purpose : speculation. And any speculator knows that one can win and loose, this has nothing to do with Dubai, its a worldwide truth. Its time for all the parasitic speculators in this country to take one-way tickets, leave their Lamborghinis, bought with financing they now cant pay off, at DXB longterm parking lot with keys inside, so normal working and producing residents can breath again.
    And compliments to the developers who managed to sell a drawing on a piece of paper for hard money.

  10. As if on January 14, 2009 9:21 am

    I have a suggestion for you, after discussing your rights, which are not going to the same as the developers obligations, with your lawyer, take him to the developer or better still send a notice through the lawyer stating a date by which you are willing to wait for a concrete answer in writing, after which you would take legal action, believe me all the developers have enough problems to deal with right now, they will cut you a deal.

    Better than sitting and doing nothing


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