Landlord Products / Services
Someone posted this in my forum and I found it rather interesting, so I thought I would write about it since there’s a lesson to be learned.
I became a member of the Property Association in June 05 at a cost of £1600 plus VAT. The Property Association make deals with house builders and sell the off plan flat/houses to their members. They do various deals around the country and overseas. Their usual trick is to tell their members via very convincing emails about various developments, and leading people to believe that there is an instant equity. I was foolish enough to believe them and purchased an off plan 2 bedroom flat near Newcastle, in June 05, to be completed in July 06. There was 12 flats for sale and all were bought by members.
The initial info from them was also mentioning that a similar flat had sold in the area for £134,000, so I thought we were getting a very good deal with our purchase! Because there was no Post Codes I could not research anything on the Internet. We were also told that the flat was 4 miles from Newcastle and in a regeneration area.
When I made my 1st trip there shortly before completion, I had a shock. The flat was nearly 8 miles from Newcastle, not 4, and in a dump and depressing area.
Our flat has now been on the market since completion, and is now on the market for less than the purchase price!!! Furthermore, in order to purchase through the Property Association, there is also a ‘finders’ fee of 2%. All in all, we paid nearly £5000.00 in fees to purchase a flat that is not worth today the price we paid 2 years ago!
**SOME CONTENT REMOVED**
(If there are any TPA Members who have purchased a property through TPA, I would be glad to hear their views)”
My sympathy goes out to Dan, the guy who wrote that. There’s plenty to be learned from his tragic experience.
I’ve noticed a lot of those property association companies merge from under the woodworks over the years and I can safely say that they’ve never appealed to me. Not because I thought they were a dodgy outfit (although, I do now), but more because I wanted to have a more in-depth involvement with property myself, as opposed to getting someone else to do the work for me for a shit load of money. What these property association companies basically do is approach developers, and strike up an agreement. They usually say, “we’ll sell 20 apartments for you, if you give us a discount on each flat”.
If you plan on going down the route of using a property association, just be careful, especially with off-plan proposals, as you never know what you might end up with. And don’t be fooled by the “instant equity” bullshit; equity can NEVER be guaranteed. If they’re so positive of instant positive equity guarantee, tell them to put it in the contract. I’d like to hear their responses to that… The fact is, you can’t actually value a property accurately until it’s been built.
Disclaimer: I'm just a landlord blogger; I'm 100% not qualified to give legal or financial advice. I'm a doofus. Any information I share is my unqualified opinion, and should never be construed as professional legal or financial advice. You should definitely get advice from a qualified professional for any legal or financial matters. For more information, please read my full disclaimer.
John
What a great resource the web is ! they are one and the same, and they also have another web presence:
www.thepropertysyndicate.com/
This offers
MAXIMUM GAIN MINIMUM RISK !!
UP TO 50% RETURN PER ANNUM !!
Last person I heard of offering this sort of return on investment was Bernard Madoff in The USA, and we all know where he is heading, and how safe your money would have been.
As the Financial Services Authority warns, if it sounds too good to be true, then it probably is.
A little like pyramid or Ponzi schemes.
There seems to be a pattern emerging here.
No further comment from Mr Sawyer about "slander" or defamation of character ?
I actually think that "The Property Syndicate" should be registered with the FSA, and that it is illegal to operate a "collective investment scheme" in the UK without doing so.
Mr Sawyer quotes some very legal sounding stuff about "qualified investors", which is of no relevance to the UK regulations, and doesn't exclude them in any way from their obligation to be registered.
Caution to Mr Sawyer, I do have some considerable expertise in this area. But bring on the debate, I'm enjoying it.
He was also suggesting recently at his TPA site that people should take out second and even third charges against their homes to invest in BTL.
Maybe not the best advice I have ever seen.
Looking at his main customers at Pushinternet, they seem to be a firm of debt councillors, Dawson White, Chiltern Debt Management etc (all owned by one company) based in the same building in Sale, Manchester as TPA are.
It looks like TPA could be a great source of customers for them !!
Phil