Friday, March 29, 2013

The International Appraiser in the Media, 1st Quarter 2013

New construction in Natal, Brasil
A couple of posts from this first quarter have resonated in the media, as follows:

My concerns about real estate “crowdfunding” ( attracted questions from reporter Adrienne Jeffries for The Verge (an on-line publication about the intersection of technology and culture) about, a new Microsoft-incubated venture given publicity and an award in the recent SXSW 2013 conference in Austin, Texas. The CEO of this new venture, 26-year-old Jilliene Helman, has seized on what has been labeled as a novel idea – attracting multiple investors to pool their money into a single real estate deal. Amazing! Why has no one come up with this idea before?

Actually, this concept has been used many times before, but its name keeps on changing, but perhaps Ms. Helman is too young to remember the billions of dollars lost by investors in the real estate syndications of the 1980s or the TICs of the 2000s. The problem is not so much the concept as the sponsors these crowdfunding ventures attract, as the soundest deals have no need for crowdfunding. The only thing RealtyMogul has done is to put the investing process on to a web site, but wait, haven’t I’ve seen this before on, where I’ve bought and sold REITs for years? has assured the investment world, though, that all of its investments will have been carefully vetted by their team. Take a look at the team in the following video:

Wow. None of them appear to be any older than her, and it appears that one of her partners did not even feel the need to put on long pants for their press conference; another partner felt the need to compulsively drink bottled water even though he didn’t say anything. How parched could a closed mouth be?

If I was to take real estate investment advice, I would want to see white hairs on the heads of my advisers, enough to show that they’ve been through one or two real estate cycles and know how real estate investments work over the long term. Then there are REITs, which have been vetted by the SEC, as opposed to crowdfunding ventures aimed at so-called “accredited investors”, in order to escape SEC scrutiny.

Any way, this is the resulting article written by Adrienne Jeffries:

Meanwhile, my article on purchase contract scams ( has been reprinted in several appraisal publications and blogs, including Ann O’Rourke’s Appraisal Today, Joan Trice’s Appraisal Buzz, after appearing first on These are all publications aimed at U.S. appraisers, but the message is global – purchase contracts are often constructed to be misleading and can therefore be unreliable indicators of market value.


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