HomeNewsAre Overseas Property Investments Risky?
Are Overseas Property Investments Risky?

Are Overseas Property Investments Risky?

Overseas Property Investments Are Perceived To Be More Risky Due to Lack of Due Dilligence

Overseas property investments can be viable if investors do proper due diligence by seeking out credible professionals in that particular country such as the local real estate agents, purchase through reputable and financially sound property developers and engage a lawyer to conduct thorough checks. Be sure not to skimp on hiring decent professionals for these jobs. 

Most people would want higher returns of 10% to 20% for investing in overseas properties as they deem it more risky than investing domestically. Sure, there are opportunities everywhere if we look hard enough but can high returns be easily guaranteed?

If returns of 20% can be made so easily, those projects would not even be marketed in a small country such as Singapore in the first place, it should easily sell out in that foreign country itself. 

I believe this is why Singapore still remains the preferred choice for Singaporeans as they already understand the local housing market and they know that it is tightly regulated and the government is proactive in making appropriate policy adjustments when necessary. 

The Singapore property market is also transparent as caveat data is readily available and the property developers themselves are subject to thorough financial assessment by the lenders.

With excess liquidity, most people prefer to invest their funds to counter rising inflation. In both of the failed overseas property investment cases highlighted below, the consumers paid almost S$3,000 to attend a property training session conducted by the same marketer, Wendy Kwek. 

Imagine if there were at least 10,000 people who attended her courses over the years, the total revenue from the course fees would have totalled almost S$30 million alone. This is not even taking into account the large commissions she would have made from the property vendor for selling such dubious projects with promises of incredible returns. 

Overseas Property Investments With Huge Losses

Brazil Social Housing Projects Investment

A couple who invested close to $600,000 in two social housing projects in Brazil which turned out to be worthless have sued Singapore marketer Wendy Kwek to recoup their investments.

In their lawsuit, Mr David Haw and Ms Cindy Yee alleged that they were misled into investing in the projects through London-based firm EcoHouse, as a result of false representations by Ms Kwek.

They alleged that Ms Kwek said during presentations and in e-mails that the developments were approved by the Brazilian government, that she had done due diligence checks, and that investors would earn a return of 20 per cent within a year.

Since 2011, between 800 and 1,500 Singapore investors were estimated to have put in more than $65 million into three housing projects. It later emerged that EcoHouse did not own the land it was purportedly developing and was not working with the Brazilian government.

In October 2012, Ms Yee was invited to attend a presentation for the Bosque project. The invitation e-mail stated an “intention… to provide year-on-year 20 per cent returns”.

The plaintiffs alleged that the claims for the Casa Nova project were repeated by Ms Kwek at the presentation for the Bosque project, which Mr Poh did not attend.

In 2013, Ms Yee received an e-mail from EcoHouse asking all Casa Nova investors to extend their investments. The plaintiffs then signed two deeds to modify their original contracts.

They have not received any return on their investment or the return of their capital.

UK Hotel Investment

A doctor who invested in a hotel in the United Kingdom after attending a seminar on property investment lost money after it was sold at a loss.

He sued the seminar’s speaker – a woman who presented herself on the event brochure as a savvy property investor – and was awarded about S$85,000 (US$61,800) by a district court in Singapore.

Dr Lim was one of 85 plaintiffs who bought units in the Tillington Hall Hotel in Stafford, UK, during a series of property exhibitions in Singapore in 2013 and suffered losses.

The project had been introduced to them by Ms Kwek, who told them that it would be profitable. 

All of the plaintiffs except Dr Lim eventually withdrew their claims in the High Court, and his claim was heard in a district court.

According to Dr Lim, who is a ear, nose and throat specialist, he came across an advertisement in a local newspaper in January 2013, promoting a free two-hour “Property Riches Seminar”, which Ms Kwek conducted.

She was identified as “Ms Wendy Kwek, Spirit of Enterprise Awardee 2004”. 

Dr Lim regarded himself as someone with “zero knowledge when it comes to property investment”.

Around Jan 20, 2013, he attended the free seminar, which was organised under WK Events and fronted by Ms Kwek.

Throughout the seminar, Ms Kwek portrayed herself as an astute business owner and property investor with significant experience and success in advising others on investment properties as well as in her personal investments.

During the two-hour seminar, she talked about how savvy investors have been accumulating millions in the property market, how average people can also become rich by taking the right action, and how to identify good investment opportunities locally and internationally.

Ms Kwek encouraged the attendees to sign up for another two-and-a-half day course called the “Property Riches Program” which cost S$2,995.

Dr Lim said that Ms Kwek told the attendees that if they signed up for this programme, they would become members of her investment network and be offered exclusive investment opportunities that she had personally sourced and assessed using tried and tested investment methods.

Dr Lim signed up for the programme and attended it in March 2013, becoming part of Ms Kwek’s investment network.

She said the project would yield returns of at least 7 per cent in the first year, with returns increasing progressively each year.

By about the sixth or seventh year, the project would yield returns of about 14 per cent, and she would lead them to exit from the project and sell their investments at two times of their invested sums.

She also invited the director of the hotel’s developer on stage, who talked about the project and the projected yield.

Convinced that the project was sound and profitable based on what Ms Kwek said, Dr Lim placed a holding deposit of S$10,000 for a double room unit in July 2013 and completed the full payment of £52,000, worth about S$100,000 at the time, in August 2013.

However, the project was a failure. Dr Lim did not receive the promised returns as presented in the emails or exhibitions.

Over a five-year period, the investment did not even yield returns of 7 per cent annually, and did not reach 14 per cent by the sixth year in 2019.

In June 2021, the Tillington Hotel was sold at a loss, and Dr Lim received a mere £3,949 as his share of the proceeds.