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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

We know property investors are struggling, and for the most part, we know why. But what most us don’t know are the everyday struggles they’re going through. One investor agreed to write a journal of her experiences for Kipp. We asked her to be ruthless: she obliged.

We’ve withheld her name for legal reasons.

I’ve been living in Dubai for over five years. I already own a property here, and its value has sky-rocketed over the years. So I wanted another one. I was being greedy, I know, but if I didn’t want to make money fast, I wouldn’t have moved to Dubai in the first place.

So I met with a property consultant from Remax Associates in April 2008. She told me all about flipping. She showed me a property that, she said, would flip easily.

She explained that the developer (which I won’t name. I’ll explain why later) has an escrow account, and that they offer home loans through an Islamic bank. She then leaned over and said the magic words: “There’s one apartment left. I have another client who’s interested in it, but I want you to have it. But I can’t hold it for you unless you pay the booking fee. It’s only AED10,000. Then keep the property for a month or two and sell it.”

And that was it. I was sold. I wanted to flip a property and make a little money. I had done it before, and I was ready to do it again.

As soon as I booked it, and as soon as I paid the first installment, the property consultant advised that I wait until after the summer to put the property up for sale. She said that the summer is a bad time to sell, and that as soon as everyone is back from their vacations, there’d be a buying frenzy. So I waited.

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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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