Selfstyled real-estate expert Ozzie Jurock and two associates have been named in a proposed class-action lawsuit by investors in a condo development in Williams Lake.
Brian Stachniak of Delta, who bought one of the 76 units in the Crestwood Estates development, alleges that Jurock and his associates, David Barnes and Ralph Case, failed to report major repair work that needed to be done, misrepresented the value of the units and failed to upgrade the units as promised.
Stachniak is asking B.C. Supreme Court to certify the lawsuit as a class action, which would permit him to pursue it on behalf of everybody who purchased units.
This is the second proposed class action filed against Jurock and his associates in the last 16 months.
In March 2010, Gregory Bosworth of Bowen Island made similar allegations with respect to his purchase of a unit in the Roosevelt Apartments in Prince Rupert.
A hearing to certify that lawsuit as a class action was held in May and a decision is pending.
Jurock – who is the public face of this business – uses his folksy charm and extensive real estate knowledge to generate publicity in mainstream media outlets.
Until 2008, he wrote a weekly column in The Vancouver Sun. Radio and television business commentator Michael Campbell has also heavily promoted him. Campbell regularly features him as a guest on his Money Talks program on CKNW radio and at his annual World Outlook Financial Conference.
On his conference website, Campbell describes Jurock as “one of Canada’s leading business motivators” and says he routinely attracts audiences of more than 700 people. “There is only one reason,” he asserts. “Ozzie Jurock delivers more than he promises.”
These sorts of endorsements provide Jurock with name recognition, credibility and the platform he needs to attract people to his Real Estate Action Weekend.
This is a weekend seminar billed as “two days of inspiration and insight from Ozzie Jurock.” Topics include how to build and maintain a rental portfolio, and how to buy an apartment building with no money down. Cost is $797.
Taking the two-day course entitles you to join the Real Estate Monthly Action Group. These monthly meetings include guest speakers and reports on market activity. They also provide the opportunity for members to pitch their own real estate deals, and – not incidentally – the opportunity for Jurock and his associates to pitch their deals.
It costs another $300 to join this group, plus $177 per month for a minimum of 12 months, but Jurock provides deep discounts for people who make an upfront commitment to buy the whole package.
The bottom line is that he ends up with a monthly audience that includes relatively unsophisticated but very attentive people who are heavily motivated to invest in real estate.
And what better real-estate deal for a student to invest in than the teacher’s deal, especially if the teacher is offering it at what he claims is below appraised value?
As a further inducement, Jurock offers a $500 referral fee to every member who convinces a friend or family member to invest in one of his deals.
He also peppers members with sophomoric sayings designed to spur them into action. Some examples are “life is in the doing,” “the road to hell is paved with good intentions,” and “it’s never too late [to] attract that great passive income we all need for a self-actualized life.”
I personally do not like this sort of hype, which is exactly what it is. It appears to me that Jurock’s overall marketing strategy appeals to financially unsophisticated people who have limited funds to invest and know little or nothing about real estate investing, but want desperately to get into the real estate market.
One of his answers has been for these people to buy apartments and condos in remote communities such as Williams Lake, Prince Rupert, Prince George and Merritt, and place them in rental pools to generate so-called “passive income.”
But of course, such resource-oriented locations are often subject to wrenching economic downturns, and these markets don’t enjoy the same sort of boost from immigration as the Lower Mainland does. Also, unforeseen expenses (such as leaky condos) can turn the most conservative cash flow projections into wishful thinking.
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These kinds of cases almost exclusively occur in falling markets. In soaring markets, even bad investments are bailed out by price rises. Expect there to be similar cases in the LML once the market here turns. How many here ‘invested’ in RE under ‘guidance’? – vreaa