Thursday, February 23, 2012

"Amazing Opportunity" In Detroit Real Estate Peddled To European Investors Nothing More Than 'Motown Money Pit' Of Looted Homes, Squatters, Tax Bills

In Detroit, Michigan, The Detroit News reports:
  • The sales pitch resonated during the depths of the recession: Detroit's dirt-cheap housing represented "an amazing opportunity" and "an ethical investment." So said brochures sent to European investors by Assetz International, an English firm specializing in international real estate investments, whose chief executive often is quoted in the British media. The sales pitches said the houses would be renovated, thanks to an alliance with Home Depot, and "quickly" filled by low-income residents.

  • But now at least a dozen overseas investors say their more than $2 million in investments have become a trans-Atlantic money pit. They are left with empty, unrepaired houses in Detroit and have tried to convince local law enforcement officials to take action. To date, none have.

  • Several investors said they have compiled evidence to show as many as 30 investors and 60 Detroit properties are involved in the alleged scam.

  • "It's ruined my life," said Les Young, 53, a disabled British military veteran, who bought two homes for $90,000 in July 2010 that are in foreclosure. He has spent an added $12,000, evicting a tenant and for other costs. "These were the investments meant to allow me to live a basic life. Now, I can't even afford all my medicine."

  • Assetz International blames British resident Mark Demby and local businessman Tom Smith, who was supposed to renovate the houses, for the problems. Smith said in an email through his lawyer that Demby is to blame. A Swiss couple have filed a lawsuit in Wayne County Circuit Court against Nuevo Skye/NSUK, a firm with offices in Detroit and England run by Demby.


  • The investors contend they are left with property tax bills, squatters and looted homes, according to the lawsuit and information provided to the Wayne County Prosecutor's Office.

  • At least 11 of the 13 houses for which the investors provided addresses appeared to be empty when The Detroit News viewed them during the past month. Between 400 and 600 Detroit properties were sold to European investors since 2008, said Stuart Law, chief executive of Assetz International.

For more, see Foreign investors upset by Detroit home sales.