Service a response to burned investors

Dunn, who heads up apartment specialist real estate agency City Sales, said he was constantly picking up the pieces for people who lost money in schemes such as Blue Chip.

Choosing properties to invest in was something that a lot of people did not do well, he said. That was why he had started City Sales Investments (CSI), which launched today. “All I see all day every day are people coming to me who have made terrible mistakes.”

Interest in the offer had already been significant, he said. “We sent out 30,000 emails this morning and have already got 10 registered clients. I knew it would be a flashpoint in the market.”

Dunn had hoped to launch Dunn Funds, an investment vehicle that was to raise $7.5 million by offering shares at $1 each and buying 10 residential properties in Auckland.

But he said the process of getting through the FMA regulatory process was far too onerous and the scheme had been shelved for the time being.

Instead, CSI will act as an investor’s buyer’s agent. For a fee of 2.5%, or a minimum $12,500, it will help buyers find investment properties.

Investors will register and pay a deposit, after which they will be sent information outlining CSI's opinions of areas around the city and details of current values. It will indicate which investments might be a good buy and will offer tips on funding the purchase and tax issues.

CSI will then view and evaluate a property the buyer is interested in, and negotiate a price. It then manages the sale process for the buyer, finds tenants and manages the property.

Dunn said the properties targeted would be standalone houses costing between $450,000 and $700,000. But only about 1% of the properties available in that price range for sale would be suitable. “There’s a lot to a growing city that you have to understand. There’s a lot of stuff that you shouldn’t buy and a lot you should.”

He said buying existing homes around Mangere, Otahuhu and Beachhaven would provide better value than new homes in places such as Hobsonville Point.

“I haven’t set this up to help first-home buyers, although I will help if they ask me to, but for sophisticated people who know they should have further exposure to the Auckland housing market but either are too busy or it’s below them to do what I do.”