Impact of Dinna Revilla’s arrest on foreclosed property business
February 20, 2008
The renowned guru of foreclosed property investing in the Philippines, Dinna Revilla, was arrested three weeks ago and her supposed fraudulent schemes were featured last week on GMA7′s Imbestigador.
The arrest was based on estafa complaints by her investors, after Dinna allegedly continued collecting funds although the real estate properties were already foreclosed by the bank. In addition, several of the checks she previously issued as payment to investors bounced.
This development caused several people to believe that the foreclosed property investing venture espoused by Dinna and Think Rich! Pinoy author Larry Gamboa was a fraud.
Personally, I don’t think there is a problem with the business model. Investing in a foreclosed property is a time-tested strategy of real estate investing, along side the strategies of buy-and-hold (where a property is purchased and resold after value has appreciated) and flipping (selling the property at a higher amount right after construction was finished or right after it was purchased).
Several people not just in the Philippines have made millions from foreclosed property investing so the problem is not with the business model. The flaw lies with the people managing such businesses.
In Dinna’s case, according to complainant’s allegations, she diverted company funds for personal use, failed to inform investors about failed projects while continued to collect additional investments, and registered some of the properties under her name and not under the company.
If those were true, then if Dinna is guilty of anything, she is guilty of greed.
The current political buzzword applies here: Hindi na-moderate ang greed.
Discuss Dinna Revilla, her arrest, and her book Riches in Foreclosures in the Dinna Revilla thread in the PMT Forum.
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