tip off

When is a property expert not a property expert?

Move over Henry Kaye. Step aside Bruce Yardney. There’s a new property expert back in town. With a huge banner advertisement in The Age last week, self-styled real estate millionaire Dymphna Boholt is offering her revolutionary real estate investing system to 200 “lucky” people over two Melbourne sessions (as well as others being held across the country from Perth to Parramatta).

According to Boholt, similar full-day “trainings” usually cost $1000 to $1500 — but “because this information is far too important”, Boholt was “not even going to ask for $1000 a ticket” — instead, she would give them away free.

Boholt’s main pitch appears to be that she went “from virtually zero to $3.5 million of real estate wealth in just 18 months”. That appears to be an impressive claim. Of course, a closer look at Boholt’s website indicates that apart from the fact that there is no factual backing for the bold claim, it’s not even true anyway. Boholt’s website stated that “within just one year she had accumulated a $3.5 million property portfolio, boasting $1.55 million in equity”.

So in fact, Boholt didn’t have $3.5 million in wealth at all, she had $1.55 million (if her claims are to be believed) — and that was in 2000, when the property market was bubbling away. One wonders whether Boholt is in a position to be giving advice given she doesn’t appear to understand the difference between an asset and a liability. (If someone borrows $10 million and buys a property for $10 million, they certainly haven’t generated $10 million in wealth).

Boholt then started impressing readers with some bold facts.

First, the advertisement claimed that “even during the last recession in the ’90s where unemployment went from 6% to 12%, interest rates at a crazy 18%, the real estate market held firm”. That isn’t quite correct. In real terms, property prices fell by almost 10% between 1990 and 1993. For a highly leveraged asset, that is a substantial decrease.

Boholt then stated that “despite shocking retail figures, fears of euro debt crisis, fears of Australian property prices being overvalued, there were areas in Australia that increased by 35% in 2011 (However, there were areas that also dropped by 30%)”. Boholt’s claims seem somewhat misleading. RP Data reported that prices fell in 2011 in every capital city — with Perth prices down 4.3%, Melbourne down 6.1%, Brisbane 6.8% and, nationally, prices fell by 3.6%. While very small suburbs may have delivered large gains, they were for tiny sample sizes of usually fewer than than 10 sales, so the results were not meaningful.

Boholt’s organiser sent to Crikey a list of suburbs with alleged price gains above 30%. Crikey cross-checked that data and RealEstate.com.au figures (sourced from RP Data) appeared to contradict those claims.

This isn’t the first time Boholt has targeted Australian investors. Property expert Neil Jenman warned of Boholt as far back as 2005. Jenman shrewdly stated that “for several years, Dymphna has been spruiking property in America. She tells Aussie investors that they can get ‘phenomenal returns’ and that ‘returns of 20-30%’ are not uncommon” and that “investors should do extra due diligence whenever Dymphna Boholt is speaking”.

It’s no different this time, with Boholt advertising that “investors” can “discover how to create [their own] mini property boom in the next 12 months, regardless of the economic climate” and “discover how to get 25% yield and a potential return of 200%”. Given residential property tends to yield about 2-3% at the moment, Boholt must have some pretty impressive strategies.

Boholt later described herself as a “multimillionaire property investor … nationally recognised as a leading expert adviser and mentor in property investing, asset protection and effective tax planning”. Boholt is certainly recognised — typing her name in Google comes up with “Dymphna Boholt Scam” with more than 3000 hits, including a reference to a High Court ruling in which Today Tonight was found to have breached trade practices laws after running a story that contained false claims about Boholt’s wealth.

5
  • 1
    Flat tyre
    Posted Tuesday, 7 February 2012 at 3:05 pm | Permalink

    Property spruikers should be subject to same regulation and scrutiny as financial planners.
    My favourite line is “capital gain assured”.

  • 2
    michael matusik
    Posted Tuesday, 7 February 2012 at 4:25 pm | Permalink

    Adam

    Here is a summary of my presentation to members of the Victoria UDIA last Friday. Crikey readers might be interested.

    A fuller report will be out tomorrow out http://www.matusikmissive.wordpress.com and most likely via the Property Observer website too.

    Keep swinging

    Cheers

    Michael

    The new housing market will remain tough across Australia and especially in Victoria for some time.

    Whilst we do not expect the market to crash, it will be increasingly difficult to make new sales.

    People will, of course, purchase new property, but the property on offer will need to be better tailored for, and marketed to them.

    The development industry has become quite sloppy in recent times. Sales down south (Victoria largely) have been too easy and the attention to service/detail limited at best.

    Things are now changing. Melbourne is past its peak and is at 1 o’clock on the property clock. The Victorian market is now oversupplied with both new and existing stock; confidence is low and there are fewer jobs being created today than in the recent past.

    End prices are also high and somewhat unaffordable. Rental growth, whilst still positive, is now sluggish and is likely to remain so, with the city having the highest vacancy rate of any Australian capital, at over 4%.

    Brisbane, my home town, in contrast is at the bottom of the cycle and is about to experience a recovery. As noted above, Brisbane was in the same position as Melbourne was in mid-2007.

    It has taken four years – last year’s flood did delay Brisbane’s upturn by about a year – for Brisbane to start showing signs of improvement. It could take Melbourne this long too – at best two to three years – to recover. History supports our claim.

  • 3
    Meski
    Posted Thursday, 9 February 2012 at 5:15 pm | Permalink

    Unusual. Con-artists usually change their name by the time there’s stories out about them.

  • 4
    Edward
    Posted Wednesday, 15 February 2012 at 10:31 pm | Permalink

    My first time on Crikey and I think this article is very negative
    with selective facts of its own.
    I was looking for some factual data on the success or otherwise of
    this program but I don’t see it here.
    Perhaps because it’s easier to criticise than praise. If it doesn’t work
    you can say I told you so and if it does you can just forget you spoke
    against it.
    Anyone know how I can get some real data?

  • 5
    Meski
    Posted Thursday, 16 February 2012 at 12:13 pm | Permalink

    @Edward: google Dymphna Boholt scam - Lots of material there. Also lots of sockpuppets defending her.

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