NVP
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Hey all I came upon this over the weekend on a Property forum I am part of ..........wow this guy is good and rants like I do about Forex vendors 
read and beware
N
New to Property (& Gurus) Then read this..
I make no apologies for what I say below... as with everything in life you, the reader, must make your own decisions, choose your own partners, write your own cheques and make your own bed...
but due diligence requires that you look at both sides of any equation and I have attended quite a few 'events' over the years and I have been to very few that I felt were 100% genuine - done with the perfect balance of integrity vs profit.
i.e. Genuinely set up to help people attain financial independence for the client rather than for the 'guru' to make an unreasonable windfall (at your expense).
It's often said that if you get nothing from a £20 event that it was a waste of money but if you learn 1 'cool trick' that makes or saves you £20,000 on a £2,000 weekend course - then that course was 'value for money' (it's a f**king great way to convince you that you should whip out £2,000 and hand it over with the level of due diligence you usually apply to the purchase of a loaf of bread!)
Bull****!
Yes, you might learn that money saving trick but you can learn it elsewhere anyway... for a fraction of the cost!
Trust me, I could just as easily tell you that by reading a certain book or property blog that you will find information worth £20,000 to you (should you be in a position to apply it).... and it would be true... but blogs can be read for free and books for pennies..
n.b. The odds that you will learn 'that' trick on your £2,000 weekend that can be directly applied to 'your' business is pretty remote.... you will either learn this lesson the easy way or the hard way...
(just google your question - any question - you'll find an answer - even if it takes you 2 hours that's still £1,000 an hour and you get the weekend free too!)
These courses exploit the laws of 'scarcity' and 'greed' - we all worry that there's something that we don't know... that if we just 'knew that one thing' our lives would be perfect and our business more profitable.... it's the 'what if' that nags you into handing over £2,000 to sit in a stuffy room for 3 days when you could have been at home with your family... instead you get NLP overload, warm coffee and some nice sandwiches (if you're lucky) and you'll come away hyped / tired but a week later wonder why your life hasn't changed - because (hard truth) is that if you weren't one of those people before the course, you sure as hell aren't going to have changed much by the next Tuesday
It's also called chasing rainbows!
There are books out there which can be bought on Amazon for around a fiver incl. p&p(used of course - usually in such good condition because they haven't been read)
For £100 you can buy all the training you need (as long as you can read)
If you join various online groups (such as this) - there are many, many others of course.. (some excellent, some good, some just a nest of vipers ready to entrap the novice and bleed your bank account dry).
Clue: Have an extremely generous pinch of salt ready if you receive a call or an email or visit a website where the 'pitch' is that you are promised to be told 'the secrets of....' (of 'what' the secrets pertain to is largely irrelevant - be it the secrets of NMD (no money down deals) or making money from Rent2Rent or Adverse possession etc. or building a £1million portfolio in 12months....
There are no secrets... all there are, are some good ways of getting over some of the hurdles... and there are people who can & will 'hold your hand' while you do it for yourself... but generally speaking these are not the people with the glitzy sales pitch and the promise of revealing 'secrets'.
If anyone promises to mentor you for £500 pcm or £5,000 or £10,000 a year or promises to 'personally' build your portfolio with you by their side.... in return for £20,000, £30,000 or £50,000.... (& that's just their fee by the way! - it doesn't buy you a single brick) - then for goodness sake, take a look at yourself... if you have that kind of money but are so lacking in confidence that you would willingly hand over huge sums of cash to somebody - then you really do need to reassess your strategy...
Take proper advice from 'real people' (not gurus - they are in business to build their portfolios with your cash.... everything else comes a distant second!)
You can and will get far better service, attention and professionalism by going to see the manager of a national chain of Estate agents.... but always, always, always.... DUE DILIGENCE... and then some MORE DUE DILIGENCE!! (please)
If you are a bit unsure about due diligence please contact somebody who can either do it on your behalf or at least point you towards someone who will help you ask the right questions.
The truth is that property in itself is not difficult.... but the problem lies in YOU the individual... if you're a confident go-getter type with a bit of money behind you and a set of people skills then you will likely do well... you almost certainly don't need to go on a 'confidence building weekend' where you are bombarded with bull**** strategies, lots of loud music and faux applause at prize giving ceremonies for the latest 'didn't they do well' members of the 'club'
Most business type people just do some research, talk to a few people who have 'done it' and then go off and carry out proper due diligence - it's not difficult for even the novice to get started provided they read a few books and spend a few days online trawling the wealth of information that's readily available.
There are of course training providers who do actually provide a 'Ronseal' type service... they charge maybe £100 to £200 per person for a full day - on a specialist subject... but many of these aren't really courses for beginners, they are for people who have some experience but want to get more 'stuck in' be it tackling property conversions from single dwellings into HMOs or title splitting or buying at auction or how to manage your tax affairs etc etc..
Many courses are so dodgy the providers are one step away from being arrested (indeed, if my information is correct they might actually be arrested once various investigations have been completed)
If you are one of the many people who have a professional background, you have funds available and you want to 'get into property' you might want to consider if this is the best time to do so?
- Of course the Estate Agents will tell you it is...
- The guru will tell you that the best time to buy was 10years ago... the second best time is 'now' (such a convincing lie.. or line? I'm never quite sure?) - funny how the bull**** one-liners never change no matter what the economy is doing?
But any decent IFA / financial advisor will advise caution (as long as they aren't selling property investments as a commission earning agent).... they will advise that if you have less than £x available that you probably shouldn't touch BTL at all...
If you have £500,000 though... they might advise that you stick 20% into property and maybe gear that up with sensible mortgages (maybe 50% to 60% LTV)
Clue: Property prices in London are at historic highs and yields are very very low... interest rates can't go down so there is only one way for them to go... UP!
The global economy is weak... The UK is not in great shape... we have the worlds highest level of indebtedness... that does not suggest that any property boom can last.. and don't take my word for it... do some research... know absolutely for yourself what you believe will happen - and understand why you have come to that conclusion and then act on it...
DON'T LET ANYONE SELL YOU SOMETHING THAT YOU DON'T FULLY UNDERSTAND
Don't just take anyone's word for it - just because they've hired a nice Ferrari to impress you or because they appear to have 100s of properties (you cannot and will not know if they are all mortgaged up to the hilt and if they've been bought under other peoples names or if they are in arrears or have massive voids or are planning to emigrate in the night with a suitcase full of cash.... the Gurus sell a great story... it's what they do best, that's why they do it... Bernie Madoff was thoroughly convincing... he fooled everyone and there are 'little Bernie Madoffs' all over Britain touting their millionaire lifestyles and GRQ schemes... some will even offer to borrow money from you at generous rates... and lend it to someone else... who you've never met!
There are some good guys out there... but most of the straightforward people are just doing it for themselves... some of those are dedicating a bit of time to sharing their knowledge with others... they are passionate and of course, it's no secret that the extra money comes in handy... but there's no harm in that... you just need to make sure you're with the right ones...
Clue: Testimonials are at best worthless... shame to say it really because it spoils it for the good guys too. The truth is that the charlatans build a reliable client base on the one hand - usually the 'enthusiastic poor' clients who love all the courses and group hugs (they get the attention and in return they help build the gurus' reputation with glowing testimonials) and on the other hand - they bleed some clients dry (the quieter, wealthier ones of course)...
It's a very clever business if you like 'devious'?
But the other kind of 'wannabe' property 'millionaire' is the most commonly seen at the 'free' taster events... they usually have their own home (but not too much else) and are worried that they are nigh on the wrong side of 50.... or they are the young; 'can't afford to buy where I live but I could buy a BTL in a remote 'affordable' town' (so I can get on the property ladder) types..
And fair play to them all... aspirations should never be scorned..
But what of the risks?
Depending on whose course they attend they risk being 'mentored' into committing mortgage fraud (very common!).... just a few little white lies here & there...
Oh... you'll need to use our solicitors as they are the only ones 'who understand how our deals are structured'
(clue: if anyone ever tells you that... don't sign, just run away!)
Build a £1million portfolio with no money in just 12 months....
Just think about that for a minute... how does this actually work?
I don't know where you are in your life right now but I dare say that things are 'ok' (maybe not great because you're here... looking for ways to make it better)
Is that really going to be achieved by borrowing the best part of £1million with little equity in a climate where the downside risk is greater than the upside by almost any measure?
But let's look at the £1million portfolio... that's going to be made up of low value property (rather than 1 mansion) so that means you have to go from where you are right now - to a place where you carry on doing everything you already do... but on top of that, you now look after 10 properties... that's TEN properties... all (hopefully) with tenants - so that's the homes of 10 people (or maybe 25 people if they're a mix of family homes?)
So you are responsible for 25 peoples homes, and all the problems that come about in the course of that... drains, boilers, roofs, electrics, plumbing, white goods? etc...
Plus admin - insurance, safety certificates, contracts, rent collection, accounting, cash flow etc..
Then of course the mortgage payments... can you cover the mortgages if 1 tenant doesn't pay on time? what about 2?... what if there's a void and you can't relet because the tenant left the place in a mess and you can't afford the light refurb?
But of course it's all worth it... you're rich aren't you? you own ten or more properties and the cash flow looks good on paper - maybe even £1700 a month in your hand... until you hit a problem?
What problems?
Interest rates? - you're ok, you got a 2yr fix... ****!! is that 2yrs already? No worries, remortgage... ah!? you did a bit of a dodgy NMD thing didn't you? - not much equity is there? - stuck with your lender aren't you.... the SVR isn't very attractive but hell, you have £1700pcm to play with... or do you?
Oh.. the insurance was due this month... and no 36a needed a new boiler last month..
Getting depressing yet?
Don't worry, it gets worse... you made £150,000 on paper last year... your portfolio leapt in value thanks to the governments HTB scheme... but that has gone now... and the election went against the Con-Dems... Labour is back... house prices have stalled and interest rates have notched up 0.5% (even though base rates are still at 0.5%)
Doesn't bode well for next year... you're cash flow neutral already... now the lender is concerned about your LTV and wants to charge you an additional 0.5% for 12 months and then wants to see your LTV back at 80% or they will ask you to repay the loans... so you try to sell one or two of your properties... but the bank take all the proceeds and you're no better off!
Now it's looking like interest rates will rise again.. you're struggling to keep your own home now... you regret putting your own security on the line to satisfy your ego...
How many investors bought into the dream but ended up in precisely this scenario?
hundreds? no
thousands? no
tens of thousands? yes... Ireland bore the brunt of it... then Wales. NW, Scotland, NE and soon, I am convinced - London...
You come into this world with nothing and you leave with nothing... easy to say... but hard to live with when the 'nothing' hits you bang in the middle of your life!
And of course that brings me nicely to the next group - where the marketing is to those who, to all intents and purposes currently have nothing....
If you haven't the proverbial pot to p*** in, you can always spend £300+ on a CD package (and maybe a free talk thrown in) where you can learn everything there is to know about trespass, breaking and entering, taking possession and basically trying to steal somebody else's land or property....
That's generally known as squatting, attempted theft, criminal damage, passing off, misrepresentation, fraud etc.. and could see you at best; waste a good amount of your time and at worst see you with a criminal record...
But the gurus call it 'free property' via adverse possession (AP)....
(Clue: save your money and go online.... there's plenty enough information available for you to make your own mind up)
And Then there are all the other ways that 'poor people' can get their foot on the ladder (now, don't get me wrong... there are ways to make money here - but it's always easier to start with 'some money' in order to make more...
Lease Options: They have their uses... done properly they can work well for all sides.
Sadly, done badly they will end in tears... they can be the ugliest, immoral and unethical tool out there.... I fear too many people enter this 'arena' too hungry and neglect to respect the vendor...
SARB (sale and rent back) also tended to take advantage of the vendor - some massive frauds committed - now pretty much illegal (and for good reason) they represented a huge transfer of wealth from the (distressed) vendor to the 'Spiv' buyer (& often it wasn't the investor buyer who made the money - it was commonly the 'agent' that negotiated the deal - buy low, sell high!)
Instalment contracts - tenant buyers... great idea (maybe?) as it fills the gap that the sub-prime mortgage market used to cater for... people with bad credit will buy a house from you at an inflated price, paying an inflated rate of interest to you... and you in turn (with your good credit) pay a low interest rate and you win both on the capital profit and the financing profit... unfortunately it's also illegal... there are very few exceptions... but I very much doubt your average 'investor' who has been on a weekend course and learnt the tricks... has also managed to get regulated by the FCA for the conduct of Home Purchase Plans?
Rent to Rent - the new way to make money... apparently?
I say apparently - only because there's nothing new about it... I rented my 1st house as a student in the 1980s and I sublet it so that I didn't pay any rent... clever? not really - it's simple maths - arbitrage... simple.
The value of some course providers (R2R gurus) is that they teach you at a sensible cost how to do it well... how to squeeze more money out, put less in, cover your **** legally etc..
But some propose that you use inadequate contracts, some suggest you take the property on yourself under an AST (but don't live there)... some propose that you enter into contracts that will ultimately back-fire and could get you sued or worse...
That said, there are some good courses among the dross.
Clue: search the property forums and Facebook groups - search for 'rent to rent' and read the threads - it should become apparent who is doing this well and who isn't
(that does go for pretty much all the property topics) but beware....
THE BIGGEST RISK (in my opinion) is the (Removed) property Networking industry!
There are groups up and down the country... some quiet little affairs with some serious business... some are rather more sinister to the uninitiated..
Beware the 'Guest Speaker' who may well have paid the organisers for the privilege of speaking at their event... or they will certainly be paying the organisers commission for sales made at / after the event...
This is ok in principle - depending on the principles of the organisers... there have been some speakers at events who have earned the organisers a pretty penny only to end up 'debunked' in court and bankrupt... along with many of the attendees nursing hefty losses as a result of their investment - entered into during that lovely warm feeling that 'crowd mentality' fills people with - the time limited offer, buy now or miss out deals... it's amazing how the cheque books and credit cards fly out... whether it be in the Excel Docklands or some Home counties Hotel conference suite...
Again... Due diligence... once, twice and then again... know what you are buying... don't splurge £500 just because 200 people were clapping at you.. it's an expensive way to feel good for a few minutes!
(removed) & his company (removed) were among the most talented at parting a fool and their money.... £35,000 investment made after a short sales pitch at Gatwick... and you wonder why they made high pressure time-share sales illegal!?
Land Scams.... very much a 90s and 00s problem... but there's still a bit of it about... and there are many investors who are currently holding a tiny portion of a farmers field wondering how on earth they were persuaded to part with £15,000 for a £600 patch of cow-pat covered turf?
Very sad... and disastrous for 1,000s of people who were cold called by the very slick boiler room outfits.
Clue: If someone you don't know contacts you and offers you a green belt land plot that is about to be rezoned for housing and 'you will get planning' within the next 3, 5, 10, 20 years.... then please smack them in the face with a brick - they are ALL scum (no exceptions - don't be fooled)
In fact, if you want to know where I stand on this 'Guru' business - this is something most people should relate to.... do you remember the "Time-Share" business?
... and you'd do worse than to think of all these gurus in exactly the same vein... don't spend or commit a penny until they have absolutely proven their worth to you...
On a positive note - there are good guys out there - but these are shark infested waters and some of the best known names in the business are also THE BIGGEST SHARKS!!!
Good luck and be careful ;-)
read and beware
N
New to Property (& Gurus) Then read this..
I make no apologies for what I say below... as with everything in life you, the reader, must make your own decisions, choose your own partners, write your own cheques and make your own bed...
but due diligence requires that you look at both sides of any equation and I have attended quite a few 'events' over the years and I have been to very few that I felt were 100% genuine - done with the perfect balance of integrity vs profit.
i.e. Genuinely set up to help people attain financial independence for the client rather than for the 'guru' to make an unreasonable windfall (at your expense).
It's often said that if you get nothing from a £20 event that it was a waste of money but if you learn 1 'cool trick' that makes or saves you £20,000 on a £2,000 weekend course - then that course was 'value for money' (it's a f**king great way to convince you that you should whip out £2,000 and hand it over with the level of due diligence you usually apply to the purchase of a loaf of bread!)
Bull****!
Yes, you might learn that money saving trick but you can learn it elsewhere anyway... for a fraction of the cost!
Trust me, I could just as easily tell you that by reading a certain book or property blog that you will find information worth £20,000 to you (should you be in a position to apply it).... and it would be true... but blogs can be read for free and books for pennies..
n.b. The odds that you will learn 'that' trick on your £2,000 weekend that can be directly applied to 'your' business is pretty remote.... you will either learn this lesson the easy way or the hard way...
(just google your question - any question - you'll find an answer - even if it takes you 2 hours that's still £1,000 an hour and you get the weekend free too!)
These courses exploit the laws of 'scarcity' and 'greed' - we all worry that there's something that we don't know... that if we just 'knew that one thing' our lives would be perfect and our business more profitable.... it's the 'what if' that nags you into handing over £2,000 to sit in a stuffy room for 3 days when you could have been at home with your family... instead you get NLP overload, warm coffee and some nice sandwiches (if you're lucky) and you'll come away hyped / tired but a week later wonder why your life hasn't changed - because (hard truth) is that if you weren't one of those people before the course, you sure as hell aren't going to have changed much by the next Tuesday
It's also called chasing rainbows!
There are books out there which can be bought on Amazon for around a fiver incl. p&p(used of course - usually in such good condition because they haven't been read)
For £100 you can buy all the training you need (as long as you can read)
If you join various online groups (such as this) - there are many, many others of course.. (some excellent, some good, some just a nest of vipers ready to entrap the novice and bleed your bank account dry).
Clue: Have an extremely generous pinch of salt ready if you receive a call or an email or visit a website where the 'pitch' is that you are promised to be told 'the secrets of....' (of 'what' the secrets pertain to is largely irrelevant - be it the secrets of NMD (no money down deals) or making money from Rent2Rent or Adverse possession etc. or building a £1million portfolio in 12months....
There are no secrets... all there are, are some good ways of getting over some of the hurdles... and there are people who can & will 'hold your hand' while you do it for yourself... but generally speaking these are not the people with the glitzy sales pitch and the promise of revealing 'secrets'.
If anyone promises to mentor you for £500 pcm or £5,000 or £10,000 a year or promises to 'personally' build your portfolio with you by their side.... in return for £20,000, £30,000 or £50,000.... (& that's just their fee by the way! - it doesn't buy you a single brick) - then for goodness sake, take a look at yourself... if you have that kind of money but are so lacking in confidence that you would willingly hand over huge sums of cash to somebody - then you really do need to reassess your strategy...
Take proper advice from 'real people' (not gurus - they are in business to build their portfolios with your cash.... everything else comes a distant second!)
You can and will get far better service, attention and professionalism by going to see the manager of a national chain of Estate agents.... but always, always, always.... DUE DILIGENCE... and then some MORE DUE DILIGENCE!! (please)
If you are a bit unsure about due diligence please contact somebody who can either do it on your behalf or at least point you towards someone who will help you ask the right questions.
The truth is that property in itself is not difficult.... but the problem lies in YOU the individual... if you're a confident go-getter type with a bit of money behind you and a set of people skills then you will likely do well... you almost certainly don't need to go on a 'confidence building weekend' where you are bombarded with bull**** strategies, lots of loud music and faux applause at prize giving ceremonies for the latest 'didn't they do well' members of the 'club'
Most business type people just do some research, talk to a few people who have 'done it' and then go off and carry out proper due diligence - it's not difficult for even the novice to get started provided they read a few books and spend a few days online trawling the wealth of information that's readily available.
There are of course training providers who do actually provide a 'Ronseal' type service... they charge maybe £100 to £200 per person for a full day - on a specialist subject... but many of these aren't really courses for beginners, they are for people who have some experience but want to get more 'stuck in' be it tackling property conversions from single dwellings into HMOs or title splitting or buying at auction or how to manage your tax affairs etc etc..
Many courses are so dodgy the providers are one step away from being arrested (indeed, if my information is correct they might actually be arrested once various investigations have been completed)
If you are one of the many people who have a professional background, you have funds available and you want to 'get into property' you might want to consider if this is the best time to do so?
- Of course the Estate Agents will tell you it is...
- The guru will tell you that the best time to buy was 10years ago... the second best time is 'now' (such a convincing lie.. or line? I'm never quite sure?) - funny how the bull**** one-liners never change no matter what the economy is doing?
But any decent IFA / financial advisor will advise caution (as long as they aren't selling property investments as a commission earning agent).... they will advise that if you have less than £x available that you probably shouldn't touch BTL at all...
If you have £500,000 though... they might advise that you stick 20% into property and maybe gear that up with sensible mortgages (maybe 50% to 60% LTV)
Clue: Property prices in London are at historic highs and yields are very very low... interest rates can't go down so there is only one way for them to go... UP!
The global economy is weak... The UK is not in great shape... we have the worlds highest level of indebtedness... that does not suggest that any property boom can last.. and don't take my word for it... do some research... know absolutely for yourself what you believe will happen - and understand why you have come to that conclusion and then act on it...
DON'T LET ANYONE SELL YOU SOMETHING THAT YOU DON'T FULLY UNDERSTAND
Don't just take anyone's word for it - just because they've hired a nice Ferrari to impress you or because they appear to have 100s of properties (you cannot and will not know if they are all mortgaged up to the hilt and if they've been bought under other peoples names or if they are in arrears or have massive voids or are planning to emigrate in the night with a suitcase full of cash.... the Gurus sell a great story... it's what they do best, that's why they do it... Bernie Madoff was thoroughly convincing... he fooled everyone and there are 'little Bernie Madoffs' all over Britain touting their millionaire lifestyles and GRQ schemes... some will even offer to borrow money from you at generous rates... and lend it to someone else... who you've never met!
There are some good guys out there... but most of the straightforward people are just doing it for themselves... some of those are dedicating a bit of time to sharing their knowledge with others... they are passionate and of course, it's no secret that the extra money comes in handy... but there's no harm in that... you just need to make sure you're with the right ones...
Clue: Testimonials are at best worthless... shame to say it really because it spoils it for the good guys too. The truth is that the charlatans build a reliable client base on the one hand - usually the 'enthusiastic poor' clients who love all the courses and group hugs (they get the attention and in return they help build the gurus' reputation with glowing testimonials) and on the other hand - they bleed some clients dry (the quieter, wealthier ones of course)...
It's a very clever business if you like 'devious'?
But the other kind of 'wannabe' property 'millionaire' is the most commonly seen at the 'free' taster events... they usually have their own home (but not too much else) and are worried that they are nigh on the wrong side of 50.... or they are the young; 'can't afford to buy where I live but I could buy a BTL in a remote 'affordable' town' (so I can get on the property ladder) types..
And fair play to them all... aspirations should never be scorned..
But what of the risks?
Depending on whose course they attend they risk being 'mentored' into committing mortgage fraud (very common!).... just a few little white lies here & there...
Oh... you'll need to use our solicitors as they are the only ones 'who understand how our deals are structured'
(clue: if anyone ever tells you that... don't sign, just run away!)
Build a £1million portfolio with no money in just 12 months....
Just think about that for a minute... how does this actually work?
I don't know where you are in your life right now but I dare say that things are 'ok' (maybe not great because you're here... looking for ways to make it better)
Is that really going to be achieved by borrowing the best part of £1million with little equity in a climate where the downside risk is greater than the upside by almost any measure?
But let's look at the £1million portfolio... that's going to be made up of low value property (rather than 1 mansion) so that means you have to go from where you are right now - to a place where you carry on doing everything you already do... but on top of that, you now look after 10 properties... that's TEN properties... all (hopefully) with tenants - so that's the homes of 10 people (or maybe 25 people if they're a mix of family homes?)
So you are responsible for 25 peoples homes, and all the problems that come about in the course of that... drains, boilers, roofs, electrics, plumbing, white goods? etc...
Plus admin - insurance, safety certificates, contracts, rent collection, accounting, cash flow etc..
Then of course the mortgage payments... can you cover the mortgages if 1 tenant doesn't pay on time? what about 2?... what if there's a void and you can't relet because the tenant left the place in a mess and you can't afford the light refurb?
But of course it's all worth it... you're rich aren't you? you own ten or more properties and the cash flow looks good on paper - maybe even £1700 a month in your hand... until you hit a problem?
What problems?
Interest rates? - you're ok, you got a 2yr fix... ****!! is that 2yrs already? No worries, remortgage... ah!? you did a bit of a dodgy NMD thing didn't you? - not much equity is there? - stuck with your lender aren't you.... the SVR isn't very attractive but hell, you have £1700pcm to play with... or do you?
Oh.. the insurance was due this month... and no 36a needed a new boiler last month..
Getting depressing yet?
Don't worry, it gets worse... you made £150,000 on paper last year... your portfolio leapt in value thanks to the governments HTB scheme... but that has gone now... and the election went against the Con-Dems... Labour is back... house prices have stalled and interest rates have notched up 0.5% (even though base rates are still at 0.5%)
Doesn't bode well for next year... you're cash flow neutral already... now the lender is concerned about your LTV and wants to charge you an additional 0.5% for 12 months and then wants to see your LTV back at 80% or they will ask you to repay the loans... so you try to sell one or two of your properties... but the bank take all the proceeds and you're no better off!
Now it's looking like interest rates will rise again.. you're struggling to keep your own home now... you regret putting your own security on the line to satisfy your ego...
How many investors bought into the dream but ended up in precisely this scenario?
hundreds? no
thousands? no
tens of thousands? yes... Ireland bore the brunt of it... then Wales. NW, Scotland, NE and soon, I am convinced - London...
You come into this world with nothing and you leave with nothing... easy to say... but hard to live with when the 'nothing' hits you bang in the middle of your life!
And of course that brings me nicely to the next group - where the marketing is to those who, to all intents and purposes currently have nothing....
If you haven't the proverbial pot to p*** in, you can always spend £300+ on a CD package (and maybe a free talk thrown in) where you can learn everything there is to know about trespass, breaking and entering, taking possession and basically trying to steal somebody else's land or property....
That's generally known as squatting, attempted theft, criminal damage, passing off, misrepresentation, fraud etc.. and could see you at best; waste a good amount of your time and at worst see you with a criminal record...
But the gurus call it 'free property' via adverse possession (AP)....
(Clue: save your money and go online.... there's plenty enough information available for you to make your own mind up)
And Then there are all the other ways that 'poor people' can get their foot on the ladder (now, don't get me wrong... there are ways to make money here - but it's always easier to start with 'some money' in order to make more...
Lease Options: They have their uses... done properly they can work well for all sides.
Sadly, done badly they will end in tears... they can be the ugliest, immoral and unethical tool out there.... I fear too many people enter this 'arena' too hungry and neglect to respect the vendor...
SARB (sale and rent back) also tended to take advantage of the vendor - some massive frauds committed - now pretty much illegal (and for good reason) they represented a huge transfer of wealth from the (distressed) vendor to the 'Spiv' buyer (& often it wasn't the investor buyer who made the money - it was commonly the 'agent' that negotiated the deal - buy low, sell high!)
Instalment contracts - tenant buyers... great idea (maybe?) as it fills the gap that the sub-prime mortgage market used to cater for... people with bad credit will buy a house from you at an inflated price, paying an inflated rate of interest to you... and you in turn (with your good credit) pay a low interest rate and you win both on the capital profit and the financing profit... unfortunately it's also illegal... there are very few exceptions... but I very much doubt your average 'investor' who has been on a weekend course and learnt the tricks... has also managed to get regulated by the FCA for the conduct of Home Purchase Plans?
Rent to Rent - the new way to make money... apparently?
I say apparently - only because there's nothing new about it... I rented my 1st house as a student in the 1980s and I sublet it so that I didn't pay any rent... clever? not really - it's simple maths - arbitrage... simple.
The value of some course providers (R2R gurus) is that they teach you at a sensible cost how to do it well... how to squeeze more money out, put less in, cover your **** legally etc..
But some propose that you use inadequate contracts, some suggest you take the property on yourself under an AST (but don't live there)... some propose that you enter into contracts that will ultimately back-fire and could get you sued or worse...
That said, there are some good courses among the dross.
Clue: search the property forums and Facebook groups - search for 'rent to rent' and read the threads - it should become apparent who is doing this well and who isn't
(that does go for pretty much all the property topics) but beware....
THE BIGGEST RISK (in my opinion) is the (Removed) property Networking industry!
There are groups up and down the country... some quiet little affairs with some serious business... some are rather more sinister to the uninitiated..
Beware the 'Guest Speaker' who may well have paid the organisers for the privilege of speaking at their event... or they will certainly be paying the organisers commission for sales made at / after the event...
This is ok in principle - depending on the principles of the organisers... there have been some speakers at events who have earned the organisers a pretty penny only to end up 'debunked' in court and bankrupt... along with many of the attendees nursing hefty losses as a result of their investment - entered into during that lovely warm feeling that 'crowd mentality' fills people with - the time limited offer, buy now or miss out deals... it's amazing how the cheque books and credit cards fly out... whether it be in the Excel Docklands or some Home counties Hotel conference suite...
Again... Due diligence... once, twice and then again... know what you are buying... don't splurge £500 just because 200 people were clapping at you.. it's an expensive way to feel good for a few minutes!
(removed) & his company (removed) were among the most talented at parting a fool and their money.... £35,000 investment made after a short sales pitch at Gatwick... and you wonder why they made high pressure time-share sales illegal!?
Land Scams.... very much a 90s and 00s problem... but there's still a bit of it about... and there are many investors who are currently holding a tiny portion of a farmers field wondering how on earth they were persuaded to part with £15,000 for a £600 patch of cow-pat covered turf?
Very sad... and disastrous for 1,000s of people who were cold called by the very slick boiler room outfits.
Clue: If someone you don't know contacts you and offers you a green belt land plot that is about to be rezoned for housing and 'you will get planning' within the next 3, 5, 10, 20 years.... then please smack them in the face with a brick - they are ALL scum (no exceptions - don't be fooled)
In fact, if you want to know where I stand on this 'Guru' business - this is something most people should relate to.... do you remember the "Time-Share" business?
... and you'd do worse than to think of all these gurus in exactly the same vein... don't spend or commit a penny until they have absolutely proven their worth to you...
On a positive note - there are good guys out there - but these are shark infested waters and some of the best known names in the business are also THE BIGGEST SHARKS!!!
Good luck and be careful ;-)
