Whistleblower: Minnesota investors caught up in a 'shell game'

  • Article by: JAMES ELI SHIFFER , Star Tribune
  • Updated: November 2, 2009 - 10:05 PM

The collapse of DBSI, an Idaho company that specialized in supposedly worry-free real estate investments, has left hundreds of Minnesota investors struggling to recover massive losses.

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earthlingNov. 2, 09 9:17 PM

But with the current decline in residential real estate, and the decline to come in commercial real estate, this type of investment is a sure loser. While I feel sorry for Ms. Dykstra, there is no easy money in real estate investing. It's hard work..AND..you have to perform due dilligence. I don't know what DBSI promised and disclosed to buyers (it would be nice to know...some vital facts) but there is no protection in real estate to assure the value of your property will go up or down. You can't regulate that no matter what.

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bradtheissenlaNov. 2, 09 9:43 PM

The only reason why real estate was going up 10%, was because Banks, Mortgage brokers and Real Estate traders artificially manipulated the marketplace, until the house of cards collapsed.

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BrewmanNov. 2, 0910:32 PM

Any investment that "guarantees" a 6 to 10% return should be sending up huge red flags to any potential investors. Especially if it's got anything to do with real estate. Bradtheissenia nailed it. The real estate run up was phony from the get go. Demand for property pushed up prices. Unfortunately the demand was fake- created by those ridiculous mortgages that were made to those without the income to make the payments. A vicious cycle if ever there was one. People really need to watch out for themselves and question any kind of guaranteed investment- nobody is out there watching out for you.

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jusmeeNov. 2, 0910:58 PM

This is alot of money!!!! Why gamble with this? Just be happy with what you have!

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twkjosNov. 2, 0911:50 PM

The only reason why real estate was going up 10%, was because foolish home buyers and greedy investors kept bidding it higher and higher, thinking it was a fast buck, then treated it like a personal bank borrowing against false equity to buy their snowmobiles and other toys, until the house of cards collapsed. Now they want to blame everyone but themselves. (There, I fixed that for you, bradtheissenla.)

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Jim2005BeamNov. 2, 0911:51 PM

Dig a little deeper and you'll find that the real estate bubble was possible because the Federal government kept interest rates low for a long time (also known as the "war on savers" or "the war on the little guy") and demanded that banks make loans under the Community Reinvestment Act (CRA). Acorn, that cute little group of "community organizers" didn't help with protests against banks that didn't make bad loans. So that accounts for banks. Credit unions, mortgage brokers and speculative real estate traders have no excuses.

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amsennyNov. 3, 0912:29 AM

100% right. The price of homes was being driven up artifically. I also think real estate agents had their hand in this mess. I don't think the prices have yet corrected themselves and will continue to drop. Now for the real reason that red warning lights should be flashing...no investment can "guarantee" a return. They can guestimate only. Unless it was a ponzi scheme.

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wingfootNov. 3, 09 5:05 AM

Financial advisors have been saying NO to commercial real estate for the last four years. I asked my advisor last year about CRE and he just laughed saying it is pretty well known this is a bad investment.

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ifarmectosNov. 3, 09 5:36 AM

I would hope a financial advisor would steer a person away from a gimmick investment. The fact is not many of htem said NO over the last period of years. Thats why many of them are jobless now because their employer either got bailed out, acquired and they were cut through redundancey or they quit because their clients stopped investing money and thats how they make money. If you are wise, reader, do not trust financial advisors. Let them recommend investments to you, and YOU research them. Don't just take someones word that its a sure thing and throw your money in the pot. If thats your style then just buy a ton of powerball tickets for wednesdays drawing and get your grief over sooner rather than later.

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BudweisercsNov. 3, 09 5:40 AM

And you give you nest egg to a "snake oil" salesman? In less than an hour or 2, you could have done enough research on the internet to see this was most likely a very risky investment. You could have bought gold, and had it in your possesion and had a similar earning.

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