Overseas property debacles leave Hong Kong investors out of pocket
It’s a case of buyer beware when considering the purchase of an overseas home. Hong Kong has few protections in place when it comes to regulating agents promoting overseas property investment
When Liao Yiching spent years of savings on a property in Memphis, Tennessee, she’d planned to renovate it and sell it on for a small profit.
Six months and thousands of US dollars later, Liao has a house with still-incomplete renovations and a contractor that keeps disappearing.
Liao spent US$158,000 (HK$1.23 million) buying and renovating the Memphis property in March on the advice of her friend Sam Van Horebeek, a director at East-West Property Advisors, a Hong Kong-based firm that connects Chinese buyers with US realtors.
Horebeek introduced Liao to a contractor, Charles Alexander, president of Tennessee-based Heritage Properties. After the project was already heavily delayed, Alexander demanded the third and final payment, which was supposed to be paid on completion according to their contract. Liao paid the final amount to Alexander, who then “disappeared”, leaving the renovation unfinished. Other contractors have quoted Liao US$30,000 to complete the project, meaning she’s unlikely to make a profit when she sells it.
When people are making exuberant offers, it’s easy to get excited by them and not do all the homework that you should do. If it seems too good to be true, it probably is
Liao later discovered that another company managed by Alexander had bought the house four days before her, around the time she had expressed interest in buying it, and sold it on to her at a US$16,000 markup.
“I was very shocked,” said Liao, who is considering legal action against Alexander. “So they made a profit from the purchase and now he’s run away with the money.”