Foreclosure funds: Sunbelted

Foreclosure funds are tempting — until you ask questions



From the November 2008 issue of the magazine.


You may have seen sales pitches for investment funds that hope to make money by swooping in on foreclosed properties in the U.S. sunbelt. At least half a dozen of these foreclosure funds have sprung up across Canada.

Our advice? Be wary.

A typical case is Arizona Acquisition Fund of Alberta, offered by CBI Group Investments of Calgary. It plans to buy homes in the Phoenix area, rent them out, then sell them when real estate prices rebound — which the fund figures will happen within five years. The fund promises to pay investors 6% a year on the money they invest, as well as give them 60% of net profits when the homes are sold.

Problem is, the returns aren’t guaranteed. In fact, the fine print in CBI’s marketing material states that “the funds [sic] actual results performance or achievements could differ materially from those expressed by us.”

“That’s a red flag,” says Mark Dickey, senior communications adviser for the Alberta Securities Commission. “It’s easy for them to say, ‘It didn’t work out the way we thought.’ If that happens, you could lose your money.”

Before investing in any fund make sure it’s registered with the securities commission in your province. If not, that’s a red flag. If it is registered, see if it’s been involved in any violations you should know about.

For instance, if you look up CBI’s executives on the Alberta Securities Commission (ASC) website, you’ll find that Keystone Real Estate Investment Corp., owned by the same group that manages CBI, recently ran afoul of regulators. This past summer Keystone reached a $250,000 settlement with the ASC after the company admitted that Keystone advertising included untrue claims about past projects and that it provided investment advice when it was not registered to do so. (CBI says this was because of faulty legal advice.)

Even if a fund’s background checks out perfectly, investors should ask questions. The biggest question, of course, is whether U.S. real estate prices will quickly rebound.

Many observers think not. “The Phoenix market in particular still has 20% to 30% to fall,” says Robert Campbell, a real estate economist in San Diego.

Tsur Somerville, director of the UBC Centre for Urban Economics and Real Estate in Vancouver, is also skeptical. If you still want to bet on a rebound, he suggests you simply buy a house or condo in an area of the U.S. that your family enjoys. “You’ll need a 30% down payment but you’ll have control,” says Somerville. “And your family can enjoy the property for a few years, even if real estate prices don’t bounce back soon.”

46 comments on “Foreclosure funds: Sunbelted

  1. Thanks for your sharing ,I like this topic. It’s very interesting.


  2. How to handle the Bailout I’m against the $85,000,000,000.00 bailout of AIG. I’m also against the $700,000,000,000 bailout being proposed in Congress right now! Instead, I’m in favor of giving $85,000,000,000 to America in a We Deserve It Dividend. let’s assume there are 200,000,000 bonafide U.S. Citizens 18+. Our population is about 301,000,000 +/- … So 200,000,000 might be a fair stab at adults 18 and up.. So divide 200 million adults 18+ into $85 billon — that equals $425,000.00. My plan is to give $425,000 to every person 18+ as a We Deserve It Dividend. it would NOT be tax free. let’s assume a tax rate of 30%. Every individual 18+ has to pay $127,500.00 in taxes. That sends $25,500,000,000 right back to Uncle Sam. means that every adult 18+ has $297,500.00 in their pocket. A husband and wife have $595,000.00. What would you do with $297,500.00 to $595,000.00 in your family? Pay off your mortgage ? housing crisis solved.. Pay off credit card debt. Repay college loans ? what a great boost to new grads Put away money for college ? It’ll be there for Junior. Save in a bank ? create money to loan to entrepreneurs. Buy a new car ? create jobs Invest in the market ? capital drives growth Pay for your parent’s medical insurance ? health care improves Enable Deadbeat Dads to come clean ? or else As for AIG ? liquidate it. Let American General go back to being American General. Sell off the real estate. Let the private sector bargain hunters cut it up and clean it up. Here’s my rationale. We deserve it and AIG doesn’t. Can you imagine the Coast-To-Coast Block Party! Kindest personal regards, T. J. Birkenmeier, A Creative Guy & Citizen of the Republic


  3. I cling on to listening to the news bulletin speak about receiving free online grant applications so I have been looking around for the most excellent site to get one. Could you advise me please, where could i find some?


  4. Howdy! First I’d like to say, I adore your great content so much that I have link this page to my website. Take a peek: Yet here’s my actual comment: I am aware this is certainly kinda away subject matter on the other hand I’d calculated I’d check with. Your site is common! Would you be considering swapping web links or maybe guests authoring a weblog article or vice-versa? Because My web site explains much of the exact same topics as yours and I believe that we could drastically gain from one another. Should you be interested you can blast me an e-mail. I anticipate hearing from you! Excellent blog by the way!


  5. What business is the best wholesaler to the public?


  6. Couldn’t be written any better. Reading this post reminds me of my old room mate! He constantly kept talking about this. I will forward this article to him. Pretty sure he will have a fantastic read. Thanks for sharing!


  7. We appreciate you another perfect post. I get a powerpoint presentation next monday, and I will be on the look out for this sort of facts.


  8. There are certainly a variety of details like that to take into consideration. That may be a great point to convey up. I supply the thoughts above as normal inspiration but clearly there are questions like the one you convey up where crucial thing will probably be working in sincere good faith. I don?t know if best practices have emerged round things like that, but I am certain that your job is clearly recognized as a good game. Both boys and girls really feel the impact of only a second’s pleasure, for the rest of their lives.


  9. I’ve bookmarked, Dugg, and I joined the RSS subscription. Thanks! .


  10. Youre so cool! I dont suppose Ive learn anything like this before. So good to search out any individual with some unique ideas on this subject. realy thanks for beginning this up. this web site is something that is wanted on the net, somebody with a little originality. helpful job for bringing one thing new to the internet!


  11. I’ve truly been looking towards checking out this approach as well. Brilliant read.


  12. Hi there are using WordPress for your site platform? I’m new to the blog world but I’m trying to get started and set up my own. Do you need any coding knowledge to make your own blog? Any help would be really appreciated!


  13. Pingback: Check out my FB profile

  14. Pingback: Another Blog Title

  15. Pingback: Janome 8077

  16. Pingback: Married Dating

  17. Pingback: Solar Power For Homes

  18. Pingback: Quiet Treadmills

  19. Pingback: Does Drinking Water Help You Lose Weight

  20. Pingback: Colpurin Reviews

  21. Pingback: Colonic

  22. Pingback: Remanufactured Transmissions

  23. Pingback: Better search engine placement

  24. Pingback: Mauritius Self Catering villas

  25. Pingback: Villas in Mauritius

  26. Pingback: Louer Ile Maurice

  27. Pingback: Mauritius Villa Rental

  28. Pingback: Location Vacances Ile Maurice

  29. Pingback: Mauritius Villas

  30. Pingback: Components of Quality Management

  31. Pingback: Mauritius Holiday Villas

  32. Pingback: property and casualty insurance exam

  33. Pingback: The Best Diet Plan

  34. Pingback: Languages

  35. Pingback: Credit Card Consolidation

  36. Pingback: Fly Agaric

  37. Pingback: Acne Ebook

  38. Pingback: stop sexless marriage

  39. Pingback: וילונות

  40. Lately, I did not give lots of thought to leaving feedback on site page posts and have positioned feedback even much less. Reading through via your nice content, will support me to do so sometimes.


  41. Pingback: Help Marriage

  42. Pingback: relationship Problems

  43. Pingback: עבירות מס

  44. Pingback:

Leave a comment

Your email address will not be published. Required fields are marked *