Here's a good one for you. In Feb07, I negotiated a block purchase of 20 apartments in the Canaries. Four of my investor colleagues each stumped up €6K per apartment. I did the diligence visit and met the broker, lawyer, banker and site re-developer, who was throwing new fitted kitchens into the deal. €50K purchase price, €54K mortgages @ 70% of bank valuation. Funds were xferred from lawyer escrow account to broker. Broker passed on deposits to re-developer, and all was going well.

I went back negotiating for a further 12 apartments on behalf of 4 more of my investor colleagues. Here's where the mistake happened. They all sent their funds directly to the broker, who never forwarded them to the re-developer. Total out of pocket: €72K.

Nobody blamed me, but I felt responsible for having intoduced them to this opportunity. It was advertised on MoveChannel, so I talked to their marketing director, who shut down the ad. I found out there were also another 11 parties who had lost their deposits.

I vowed to spend my time for the rest of 2007 in a quest to somehow return my colleagues funds, by any means. Two court cases pending against the villain, but he's still resident in Gran Canaria. During presentation of the court case, I met a very honest multilingual translator, and by that stage I had become very friendly with our lawyer. Both these guys introduced me to some other great folks and, lo and behold, I found that we could procure these apartments at such a cost that I may have an opportunity after all.

Fast forward to October. Part of the plan is that we had to register a Spanish company, which completed in August. Next week, we complete and flip on the first two apartments for our first out-of-pocket investor, and we'll be able to retrieve 87% of his losses. End of October, we'll cycle our funds again and complete on another two, on which our investor will not have to fork out any further funds. In fact, with slightly higher mortgages, they will actually get cash back in account equivalent to their higher mortgages, and will be able to fund from mortgage a healthy bank balance to use against voids.

I am now convinced that any situation can be looked at in a different way. The whole experience has cost my wife and I about €30K in trips, incorporation and incidental costs, but we now have a business plan to be able to entirely recover our clients' €72K, and our initial overspend associated with correcting this injustice. We now plan to spend 1/4 of our business time over in the Canaries (with better weather than the UK), promoting a new business that was never on the cards before 2007, and one we expect to cash flow positive by July 2008.

Moral of this story is: Never Give Up.

good story. Would be interested to get more info on the new business you are setting up.

Hi, here's an update. we completed the next two in November, and then six in December, thereby achieving our 2007 objectives for all investors (one guy didn't want to proceed anyway, and chose to lose his €12K investment).

Now I have orders for another 10 apartments on same complex. But the banks have changed the goalposts, first saying they can only lend 70% , then 65% then 60% in the event an investor wanted more than one unit (they all wanted 2s or 4s). So after two postponements of trips (too busy with stuff in the UK), I am flying out again next week to catch up with a bank directly and two brokers for other products.

Project is now about six weeks behind original schedule, but there are plans in place to catch back up. We now have to take on board one full time and one part time employee, and the hard part is it's almost impossible to do constructive business over the phone. These guys are face to face people, not teleconference savvy.