Vern Gowdie – The Gowdie Letter (Australia) – In 2006, a Spaniard named Miguel thought he had hit the jackpot.
His daughter had just married Jorge, a successful bank manager. Miguel’s new son-in-law was bursting with failure-proof ideas on how to make him money.
The timing was ripe, or so Miguel thought. Spain was booming like never before, and obtaining credit was cheap and easy.
Soon enough, Jorge gave Miguel his first investment suggestion. Miguel put his faith — and his money — in it.
His recommendation: Buy an apartment in a residential macro complex. The new development was just 30 minutes from Spain’s bustling capital, Madrid.
Jorge assured him that, given the growth rate of Madrid, the small town would soon become one of Madrid’s neighbourhoods. The value of the apartment could double or even triple.
It was touted as the opportunity of a lifetime — until 2008, when the Spanish property bubble burst. The developer built the development. Yet, the macro complex never came anywhere near the outskirts of Madrid. In fact, it became a ghost town.
It currently looks like this: