Buried in debt after property promises fail

DANIEL BOSTOCK’S foray into the heady world of property investing ended in bankruptcy at the age of 22.

Now he is left wondering whether the cards were stacked against him from the start.

Forced to declare bankruptcy … Daniel Bostock with his wife, Summer, and nine-month-old son, Izaiah. Photo: Michelle Smith

Mr Bostock was just 18 when he bought a $165,000 unit in Cairns sold to him by Jordan Myall, a family friend who owned one or two properties and was getting around in a Chrysler Crossfire. Mr Bostock, who lives in Brisbane, says he regarded Mr Myall as ”an older cousin that you wanted to be like”.

At the time of the sale in 2006, Mr Myall was working for Blue Pacific Realty, a real estate agent owned by companies linked to a Sydney property marketing firm, Sunshine Pacific, where his father, Alan Myall, and his father’s then wife, Faye Kotsis, were working.

Mr Bostock does not remember being told that the property he was sold was owned by companies linked to Sunshine Pacific. Nor does he remember being told Fast Loans – the company that provided him with the high-interest loan for his deposit – was also owned by parties linked to Sunshine Pacific.

Nor does he recall any discussion that the body corporate fees for the unit would be set by a company – you guessed it – also owned by companies linked to Sunshine Pacific.

What Mr Bostock remembers is the debts he was left with when he was made bankrupt after empty promises that the rental property would cover its costs.

Reading from the document confirming his bankruptcy, Mr Bostock recounts the money he, as an information technology trainee earning about $35,000 a year, had no hope of repaying. There was the $164,090 owed to National Australia Bank, the $20,346 owed to Fast Loans and the $21,884 owed to the body corporate.

So much for the dream of easily acquired property wealth in northern Queensland, extolled by Sunshine Pacific in newspaper ads stating ”10-year rental guarantees” and the ability to make ”no deposit” purchases.

Alan Myall is dismissive of problems encountered by property buyers when he and Ms Kotsis were selling properties for Sunshine Pacific.

”All [buyers] have cooling off periods. They all have a right to advice before signing or doing things,” he said. ”Nobody has approached me on this. I have no reason to believe these people have what you are saying they have.”

He also dismisses as ”pub talk” salaries of $200,000 a year for real estate salespeople using hard-sell strategies, despite Sunshine Pacific advertisements in 2006 reading ”earn over $250,000 per annum”.

For Mr Bostock, his bankruptcy has left him with a year to serve before he can take out loans in his name and another two years before he gets a sensible interest rate.

His attempts to build a photography business are made with the help of his mother.

”It was like a win-win,” Mr Bostock says of his purchase and Jordan Myall’s commission. ”He might have known it was kind of dodgy.”

Source: http://www.smh.com.au/national/buried-in-debt-after-property-promises-fail-20121028-28drp

2017-10-15T08:19:50+00:00