These days, you can’t go five minutes on Facebook without being spammed by an “Own 20 properties with no cash down” ad.

Is it an outright scam? The answer is no (at least not outright) – but there are serious financial risks to consider.

Also, it’s something of a legal grey area. Here’s how it works:

Note: Special thanks To Douglas Chow for his help; you can call him the Chief Enlightenment Officer (CEO) of Empower Advisory.

What do the ads mean by “owning 20 properties”?

When the ads say “own”, what they really mean is co-ownership of several managed properties.

These schemes rely on getting a group of investors to pool their money together, and buy up a range of properties (mainly commercial, for reasons we’ll explain below).

The money from investors is then handled by a manager (or group of managers), who choose which properties to buy with the