The tutoring video encourages investors to target deceased estates, divorcees and "dummies" who don't know the value of their own home. Cash-strapped families whose properties are being sold in mortgagee sales, "motivated sellers" facing tight deadlines and developers on the brink of bankruptcy are also considered prime targets.
The video was made by Auckland property tycoon Ron Hoy Fong to promote his company Ronovationz. It has been distributed free to members of the Auckland Property Investors Association (APIA).
Today's revelations about the video's content have sparked a review of sponsorship arrangements by APIA's major commercial partners.
ANZ said it was "appalled" by the tactics being advocated, which did not align with the bank's core values.
Barfoot & Thompson said it would review the video footage with directors on Monday and "and consider our sponsorship once we have all the facts".
Maintain To Profit general manager Mark Trafford said he did not condone or agree with Fong's comments.
"Our company has high ethics and moral standards and subsequently we will review the DVD in full and a decision will be made in regard to our ongoing support and sponsorship of APIA."
Keith Hay Homes marketing manager Barry Walker said the company did not condone the content.
"We have a long standing relationship with APIA, and find it an ethical and trustworthy organisation."
Walker was confident APIA management would remove the material from distribution and ensure the same thing to not recur.
APIA president Andrew Bruce apologised today "for any offence" the video may have caused.
He had now watched the video and it was being immediately withdrawn.
"Clearly we don't want to see people being taken advantage of. Clearly we don't condone that sort of behaviour.
"Now that we've actually seen what is in that material we'll stop that immediately and an email will be going out to our members."
Bruce said APIA was a non-profit education and networking provider which relied heavily on the support of sponsors, including Fong's Ronovationz company.
"We are also reviewing that relationship, having had the content of the video drawn to our attention.
"APIA's mantra is to build long term wealth slowly and steadily through property as well as provide excellent accommodation service to tenants. We believe in high ethical standards and do not endorse unfair exploitation of our business counterparts."
NZ Property Investors Federation boss Andrew King said the organisation did not condone the tactics advocated by Fong and the material should not have been distributed to association members.
"We'll be contacting other associations telling them to have a look at their sponsors' material because it may not reflect the value of the association. It's a bit of a wake up call for us."
In the video, Fong tells a property investment tutoring seminar that investors should look for the "seven Ds", which include "deceased estates", "divorcees" and "dummies", in order to secure cheap deals and maximise wealth.
"Some places are already a bargain. That's simply because the vendor's a dummy. He doesn't know what it's worth."
He also advocates operating in packs to drive down prices by getting mates to put in other low offers, and giving vendors false names when making repeat offers on a property.
Labour's housing spokesman Phil Twyford said in his opinion the material was a training handbook for APIA members on how to exploit and deceive homeowners.
In his opinion the video was "a con man's charter".
He called on APIA to "publicly condemn and repudiate" in writing the messages distributed to its members.
"It is not enough for them to say they're withdrawing the video. They need to publicly repudiate all the things said and make it clear to their members that not only do they not support those messages but condemn the kind of deceptive and exploitative approaches that were used in this training video."
Fong has denied exploiting people and blamed real estate agents for advertising properties with "motivated sellers".
He said he encouraged people to "look for opportunities" but his members did not set out to deceive.
"I'm a JP and I'd never promote taking advantage of little old ladies or people who are on their death bed. I think that's disgusting."
Ron's Top Tips
Look for the seven Ds
- Deceased estate - dead people don't need property
- De bank (mortgagee sales) - can often be picked up cheaply
- Deadline - "motivated seller" facing looming deadline to sell house
- Divorcee - Ex-partner selling home cheap to prevent former spouse making money
- Dummies - doesn't know the true market value of their home
- Developers - may sell for below cost if facing bankruptcy
- Desperate - anyone desperate to sell their house before the bank steps in
