Directors contribute their own money to buy land. They invite people to buy off-plan. Few people show up because the firm isn’t reputable and the construction process proceeds flawlessly. Investors in phase 1 get exactly what they bought. This news is highly publicized.
In phase 2, many investors show up. Directors overcharge them and collect money in hundreds of millions or billions. They pocket most of it leaving a financial hole.
Phase 3 is launched before completion of phase 2. The reason is to use money from new investors in phase 3 to complete phase 2 and fill that hole.
Once phase 2 is completed and handed over, the pyramid scheme emerges as directors pocket more money and launch bigger projects successively to fill deeper financial holes. Each phase is bigger than the former, is sold off plan, and is launched before completion of the previous phase. The cycle continues until a time when directors can’t fill the big hole they created after pocketing working capital. At some point they run out of new buyers na hapo ndipo investors hulilia choo. As you can see, most projects begin with honest intentions before greed takes over and directors begin playing around with investor’s money.
In such projects, the biggest red flag is when a developer launches a new off-plan project before completing the previous one.
Si you, first finish hiyo thread iko hapo chini ? Ama you are just itching to post shit hapa ?
Have you just realised, you haven’t satisfied you 2019 Ktalk threshold ?