My USA Property Scam Nightmare
Buying Property? Beware Of Property Sourcing Scams
I live in the UK and bought a buy to let property in Buffalo in the USA. The property was sourced by Ajay Ahuja and his Ahuja Group. It never made profit, as promised by the Ahuja Group and its preferred third parties in the USA.
In fact I - like so many others, soon lost many, many thousands of dollars because of Ajay the rogue property sourcer and bad landlord.
Still trusting Ajay and his staff, a few months later I purchased a second buy to let property - sourced by them - hoping to bail out the first. It also failed miserably. Just over one year later, both properties were threatened with foreclosure.
Stress Related Heart Attack?
Only days after paying a large sourcing fee to Ajay for the first property purchase I suffered a major heart attack.
Obviously I survived and elsewhere you can read about how I reversed my heart disease.
Otherwise my partner would have been left alone to deal with this financial disaster. My dream of extra retirement income turned into a nightmare. I feel I have a duty to share my story as a warning to others about trusting people like Ajay.
I trusted Ajay Ahuja, also known as Ahuja Holdings, Ahuja Group, www.ahuja.co.uk, www.propertysourcer.com/,etc. I did not consider myself naïve. Over the years I have worked my way up the property ladder and been a (good) landlord. I believed the claims on Ajay's website and in his literature that profits could be made by investing in US property.
More recently I have found the name Ajay Ahuja connected with terms such as conman, con artist, swindler, crook, etc. Thankfully, I even learned that Ajay has already been successfully prosecuted at least once already here in the UK.
The Ajay Contract
Notice that in his contract (see image below) Ajay promises properties yielding 20% or more. (My partner says Ajay forgot to put a minus sign in front of the figure of 20%)
Notice that the USA buying trip is crossed out. If Ajay's UK clients ever got to the USA and saw his specially sourced properties for themselves, lack of tenants, etc. then there would be far less Ajay victims, if any. Notice that Ajay didn't sign the contract.
- Video - Texas Man Gets House For 16 Bucks
Texas man gets house for $16 under obscure law...
Ajay provides what is known as a property sourcing service. I was required to pay £2,750 for details of the first property and £3,500 for details of the second property in Buffalo, USA.
Later I discovered such information is available for free at sites such as RightMove.com
At Rightmove I found full details of numerous properties for sale in Buffalo and other such areas. Many of these rental properties were already under stable management with long-term tenants, and other information.
The property sourcing fee I paid to Ajay could easily have purchased a rental property in Buffalo complete with tenants and a proven rental history.
Property Management In Buffalo
Ajay's recommended USA property management are located in Buffalo and there was no reason to suppose they would have any significant problems managing my newly purchased Buffalo property with its three tenants and Ajay's assurance of no void period.
When rental income failed to appear from the property I queried my Buffalo property manager. Initially they seemed unaware there were any tenants in the property. They eventually informed me the tenant in the back unit did not pay rent but maintained the property and collected the rents from the other two tenants. When the property manager told him he was now required to pay rent he departed the property. Next, the property manager informed me the unit had been vandalised and all the plumbing/copper had been taken. I was sent a bill for over $11,000 to make the unit tenantable again.
I deferred paying that amount. It seemed more cost effective to instead purchase a second tenanted property. I still believed Ajay in the UK and his preferred people in Buffalo - the real estate agent and the property management people. Obviously more rents would pay the damage bill faster - or so I figured.
Second Property Puchase
To cut a long story short, after reassurances all round, I went ahead with a second rental property purchase in September 2008. With four new tenants added to the remaining two, it promised to bring in enough rental income to turn the situation around.
After the deposit and paperwork went through I was informed that in fact there were no tenants in the second property. There was no explanation as to what happened to the four tenants.
In addition to paying for the required inspection, I also had both the Buffalo real estate agent and the property manager attend the property. (Remember, these were both recommended to me by Ajay Ahuja as his preferred third parties). They both assured me it was in excellent, rentable condition. I said I could only go ahead with the purchase if tenants could soon be put into the property. The property manager assured me this would not be a problem.
Months later there were still no tenants in the second property. The property manager suggested I form an LLC to allow me to have section 8 housing assistance tenants. The LLC cost me $817.
The property manager soon put in two section 8 tenants but then were unable to collect all the rent. In addition there is a $1100 plumbing bill for repairs required when the water was turned on plus $1,044.36 for City Taxes.
Meanwhile there are unpaid bills at the first property. These include recently discovered water bill of $3,556.84 plus $509.64
October 2009 and the property manager informs me it's necessary to begin eviction proceedings against the two section 8 tenants plus the two tenants at my first property who are no longer paying. Eviction costs are $480x4 for evictions = $1,920 plus $100 for each extra court appearance.
The above expense is all in addition to what I have already paid - 10% of all rents collected to pay for management, lawn-mowing costs, winterization costs, landlord's insurance (which didn't cover the damage to the first property because it was "vandalization"), etc.
- Video Interview - Ajay Ahuja Property Conman
Interview with Ajay Ahuja, property sourcer, prior to multiple court appearances in the UK
What About The Recession?
Surely Ajay - and his staff/agents - should and would have known more about the recession, downturn, economic condtions, whatever in 2008 than most. Despite this, his contracts promise properties yielding 20% or more.
As I say, one tenant at my 1st property had never paid rent at all! Iinstead he'd been maintaining the property and collecting rents from the other 2 tenants. Therefore Ajay's figures for it were completely false and misleading. There were no tenants - therefore zero yield at best - in the 2nd property until I finally got rid of the bad management. In fact any yield is way, way in the negative due to actual costs such as city taxes, water bills, vandalism, winterization costs, lawn fees,etc.
It's Not Just Ajay
It's not just Ajay in the UK. There's also something rotten in the state of Buffalo (or anywhere else) when -
1. Real estate agents can sell properties promoted as tenanted - without tenants.
2. Where property managers can promise to easily get (four) tenants and then fail to get any. (Especially when I made it very clear that I could only support a second property if it was quickly tenanted.), when they can suddenly discover bills unpaid for 12 months plus, etc. etc, ad nauseam
3. When compulsory landlord insurance refuses to pay out on property damage.
Operating from the UK overseas landlords are entirely dependant on the "preferred third parties" on the ground in Buffalo. These guys all know that!
They know better than anyone - certainly far better than novice would-be landlords from overseas - the huge amounts - city taxes, water bills, repair bills, insurance, winterization, lawn fees,etc. that must be paid. They knew I was already stuck with paying the $12,000 vandalization bill - now with 1 tenant less - for the first property. And now I had twice the commitment, but Instead of tenants I only get more and more of this -
"Dear Buffalo Property Owners:
The summer season is upon us, and the grass is growing! We will be charging $40 per month per property. This will assure a beautiful and violation free lawn all summer long!
We will set up automated billing which will deduct the monthly fee from your portfolio income beginning May 1, 2008. If we receive a check or credit card number before May 1, you will receive the entire season for $200 which is one full month off!"
As your property management in Western New York, it is our duty to make sure that your property is kept up. Lawn maintenance is an easy target for fines, which come to the property owner, and, worst case scenario, can land you in housing court."
Further Costly Mis-Management by Ahuja's Preferred Third Parties
"Charles, I have called the appropriate parties. Of course I have some wonderful news for you. The rear building at xxx Niagara also known as xxx Niagara has its own water meter/account. The balance is $3,556.84 and an unpaid user fee (garbage) of $509.64. These bills have not been seen by anyone since you purchased the property as I was unaware that they were separate bills/tax properties! Due to lack of funds, xx Duerstein city tax for this year is still unpaid of $1,044.36."
All of these horrendous costs with zero rents coming in!!!
I hope this page helps expose more of the goings on behind the hype and lies of property sourcing scams and people like Ajay Ahuja. Need I mention the sleepless nights and countless times of waking up not out of a nightmare but into one?
Have you had a similar experience? I soon discovered dozens of Ajay victims like myself - how many, I don't know. Your comments are welcome. Also helpful advice, etc.
First Property - Sold!
December 2009 - accepted an offer for the triplex on Niagara Street - sold for $18,500. Yes, paid $67,000 for it in March 2008. That's with ALL the bills paid, insurance, etc. completely up to date - and two tenants. Except of course the estimated $12,000 bill for repairing the back unit (which the insurance refused to pay because it was "vandalism").
Total loss from just this one property sourced by Ajay Ahuja - At least $50,000.
I hope to get a better offer for my quad on Duerstein St, Buffalo, which is in far better condition and fully tenananted. All bills now completely up to date except for the insurance which was cancelled earlier in the year.
Why was the insurance cancelled? Because the (Ajay recommended) property manager in Buffalo neglected to inform my insurer of their change of address. So the insurance renewal notice went to a previous address, along with all the reminders.
I finally managed to find another insurance agent and Duerstein is properly insured. Of course it was another nightmare explaining why the original insurer cancelled and was refusing to re-insure.
Why on earth management would not have arranged to have their own mail forwarded to their new address is beyond my comprehension. Until I got involved with Ajay's preferred third parties in Buffalo I never left bills unpaid. Incurring penalties, interest, etc. on overdue bills is a completely new experience for me.
I have finally found new, sane management for my remaining buy-to-let property. The saga continues on My USA Property Scam Nightmare - Part II
Thankyou everyone for your comments on this page . For sure, keep those comments coming but this page remains a bit depressing for me, so maybe let's take it over to Part II.
- Video Update - Texas Man Loses His $16 House
Well, how about that!
Property For Sale in Buffalo, NY
It's now 2012 and, thanks to saner management, the other Buffalo property is all fixed up, fully tenanted, etc.
Because I lost so much on the 1st property I'm hoping for a fair price on this one. All reasonable offers will be considered. If you know anyone who might be interested in a sound investment then please contact me via this hubpage.
Now - don't miss My USA Property Scam Nightmare - Part II
- USA Locations
UK based fully licensed Realtor
- Landlord Action UK
Need to recover money from Ajay? See how effective Landlord Action are - working with barristers and solicitors.
- The New York State Attorney General - Complaints
We welcome your complaints. For consumer type complaints, we offer a mediation service if we believe our intervention might assist in resolving disputes.