By: Lily Leung

As Published in the San Diego Union-Tribune, October 12, 2012

“My reaction?” said Brent Lindberg, a 60-year-old local who invested in vacant land in Nevada. ” ‘ Hey, they’re talking about my investment. Is the owner doing less than what they promised they were going to be doing?’ I don’t know. Maybe it’s just been tough years.”

The U-T San Diego interviewed three people who said they invested in undeveloped land endorsed by Western Financial within the last 10 to 15 years. All three saw the opportunity as a way to diversify their investments and get better returns after learning about the firm’s expertise in this field. One was referred by a friend, one heard about the deals through a media ad and the third doesn’t recall.

In fact, all three consumers had trouble recalling basic information about their investments because they were made some time ago. It appeared to be a set-it-and-forget-it mentality.

“I was told they have the land and they sell the land for a profit hopefully,” said David Reiter, a 46-year-old software engineer who invested with Western Financial. “I don’t remember being given a timeframe … I was not too worried. I felt that they should keep (the land) and wait for the prices to go back up.”

All of the investors the U-T spoke with said they had gotten periodic updates on the land deals and then heard nothing for a long time. They finally received some correspondence this year. None of them knew how much Western Financial paid for the land or that some of the parcels were being financed with mortgages, as the SEC alleges. All of them understand that sometimes investments just go bad.

Gary London, who runs a real estate consulting firm in San Diego, said land investors, like any type of investor, must do their research. The advantage of real estate investing is that “you can kick the dirt,” he said. He advises people to never buy site-unseen and to always find out the history of the land.

Potential investors can learn a lot about properties by visiting city or county offices requesting public documents. Records can shed light on crucial details like land-use rules and previous ownership.

Also, if salespeople claim that the land for sale is in the path of potential growth, don’t just take their word for it, said London, president of the London Group Realty Advisors. You can access documents by agencies that project growth, such as the San Diego Association of Governments.

Above all, be doubtful.

“Always ask, ‘What’s the downside?’ ” London said. “What if their representation is not correct or they are less optimistic (now?) Then what’s being projected?… If you do that kind of thing yourself, that’s the best way to protect yourself.”