CityLivingA seminar on property investment failed to impress Jane Suiter

Fancy becoming a property millionaire and never working again? If so, look no further than Russ Whitney, or so the flyers claim. Thousands of people in the Dublin area have had one of these flyers in their letterboxes recently. Here's the spiel: come to our seminar and we'll teach you the secret of successful property investment. City Living went along to find out how it works.

The session at the City West Hotel kicked off with a promo video full of delighted UK investors who have made a fortune through taking Whitney's rather expensive three-day courses. Whitney is an education company - not an estate agent or syndicate firm - and it soon became clear that getting you to sign up for this weekend was the goal of the so-called seminar.

Questions were not allowed but time promised at the end. It never materialised. A US-style hard sell followed. Our salesman had been broke, sitting in at one of these seminars 18 month earlier but now, he said, he is well on his way to being financially independent. Why he had to spend his time traipsing around hotels in four countries in the meantime was not clear.

There was lots of hand raising, building the atmosphere and a few homespun truths thrown in for good measure. Some of the 50-plus audience - mostly men between 40 and 60 - appeared to lap it up. The speaker was English, as were all the examples. We saw great little investments where the house cost less than €20,000. The trick, it seems, is to buy the home with the minimum investment and maximum yield using "creative finance techniques".

Want to invest in property but have no money or even a bad credit history? No problem, use the "passbook signature loan technique". Simply traipse along to four or five banks and buildings societies, opening accounts with €1,000 a piece, take out a loan for the €1,000 and pay if off. All five will then be willing to lend you €3,000 each when the time comes for you to pay your deposit!

Or how about interest-free periods on credit cards? Our salesman had financed his investment in Nelson, Lancashire with two credit cards. Luckily, capital appreciation kicked-in and he was able to pay them off within the interest-free period. And despite claims that nothing in the seminar depended on capital appreciation, he did not explain how he could have managed this feat without it. Or if something else had gone wrong? What does the investor with €20,000 on a couple of credit cards do when interest rates of up to 17 per cent kick-in? No doubt there will be answers at the weekend seminar. Certainly it seems you will leave with a mountain of checklists. Checklists to quiz your accountant, your lawyer, your estate agent, and potential sellers. Simply tick the boxes and all will be well.

So how do you find this property? You need a "motivated seller". Divorcing couples and people who have recently inherited are ideal, according to Whitney. They are in such a rush that they are willing to take a lower price and avoid the estate agent. All you have to do is place an ad in a newspaper or what Whitney calls the "gold mine classified advert" - "houses wanted for cash, any condition, tenanted considered, tel" and wait for the calls to pile in. As one unimpressed attendee said afterwards, that may work in other countries but it's hard to see it in Ireland. The market is too small.

That was also true for some of the examples. Maria in Hastings found a motivated seller from whom she bought a dilapidated €150,000 home that was producing rent of €3,500 a month. She managed to do it up, paint it, put in a gravel area and a barbecue for just €1,650. You could almost hear the gasps of disbelief. After she paid her mortgage and expenses that left her with €2,369 a month. And the value had increased to €190,000 within months! Quite why the seller sold his property for so little was unclear.

Or take Marcus. He was in a big hurry to become "financially independent" and wanted only two-bedroom homes. But a great five-bedroom from a motivated seller came his way. For reasons unexplained, this seller was willing to tie up his home in an option with Marcus who would have the right to buy it in a certain time period. The crafty Marcus was able to use Whitney's website to offload that for cash to another investor! There was some confusion here. We were told the house was worth €500,000 and thus Marcus made €25,000 or 5 per cent on the deal. In his letter that was flashed up the price was actually €180,000.

It's all so easy in Whitney land. See a dilapidated building on the street? Don't walk past it, put an option on it and then sell it on. Those owners are just waiting to tie themselves to you with little prospect of reward. Or maybe City Living is one of the "naysayers" the good people at Whitney are so keen to warn about.

Even the upbeat Whitney salesman had to almost admit that yields in Ireland will simply not allow this kind of return. After all a general rule of thumb now is that you need 40 per cent of the value of a property before the rent will fully cover the mortgage. The answer? "Invest at a distance." In other words, you too can go along to the seminar, find out where the latest property hotspots and rejuvenation areas are in the UK and invest there. And in a special once-off deal, it will only cost you €1,495. But that includes CDs, videos and other promotion materials worth even more! The seminar is on the first weekend in April.