It was only last week that Ajay Ahuja appeared on “Inside Out” for allegedly conning people out of their hard-earned cash by selling duff property deals. Since the report, his name has been running riot on the property circuit. While he’s still hot topic, I thought I’d try and get my filthy little mitts on him; giving him the opportunity to give us his version of the truth. Because let’s face it, the media isn’t going to give us both sides of the story…
1] After watching the video and reading your response to the video on your blog (link removed because website no longer exists), I actually sympathised with your situation, because it was clearly a one-sided show (regardless of whether or not you are a scam artist- everyone deserves a fair trial). However, I have to ask, have you noticed any affect on your business since you appeared so negatively? E.g. have any of your current clients mentioned anything, or pulled out of deals because of it?
Funnily enough no reaction from our client base. Most did not see it as it was a regional programme. Our current client base are happy with our service. If anything we saw a little surge in business.
2 a] In one particular case shown in the video, you offered one guy a property that was worth £150,000, but the Ahuja Group said it was worth £247,000, and you were able to give it to him for £177,000. My maths isn’t the best, but had he of taken you up on that offer; he would have gotten royally fucked. Agreed? Yes or No?
Firstly the flat they showed him was not the flat we sourced him. If you watch the programme they say “similar” flat. The flat we sourced him was on the ground floor which is a bigger and better flat!
Secondly in Scotland you HAVE to have the property surveyed before you can market the property. It is called a Home Report. The recent survey we had from a RICS surveyor was at £247,000. This would have enabled craing to buy that property no oney down. The person they had on the TV was an Estate Agent NOT a surveyor.
2 b] Your explanation was that you used a 3rd party source and they used some surveyor to price it up. I’m assuming that wasn’t the first time you used a 3rd party source. So essentially, a lot of your clients could be unknowingly sitting on properties that aren’t actually BMV. I’m sure a lot of your clients didn’t bother getting a second professional opinion like the guy did in the video. I’m sure you disagree…and this is where you explain why my instincts are wrong…
BMV is a mechanism to buy properties no money down. You need the survey to be in excess of the purchase price. The surveys are carried out at arms length by a chartered surveyor. Market value is subjective hence the problems but the KEY part of it all is minimising your cash input to a deal.
ANYONE can come and put a market value on any properties you own with a plus or a minus 40% to what you think it is worth. Market value can be:
- Forced sale value
- Auction value
- What someone is willing to pay for it
- Recent sales price
- A price per sqft of recent sales
- A commercial price to earnings value
There are so many ways you can value a property hence the disparity. All we try and do is be prudent. We give the client our opinion (which they know is only an opinion) and recent sale prices of similar properties. Our clients are EDUCATED PROPERTY INVESTORS so it is for them to come to a decision. We present data.
3] The guy from Landlord Action, Paul Shamplina, mentioned that there are many more pending cases from unsatisfied customers. So I assume there are more rough times ahead for you. Can you shed any light on these cases? Do these people have legit cases against you?
No one has legit cases on me. Judgements were found on me in default. No court case has ever taken place. I am in the process of setting these judgements aside and I will be defending these in court. Watch this space.
Investment is never an exact science. When things go wrong which have nothing to do with us people like to sue us. Take for example a property we find and then:
- The tenant stops paying the rent
- The roof needs repairing
- The boiler needs replacing
This happened over a period of 12 months. Is this the property sourcer’s fault? If the tenant lost their job is this our fault? The survey did not indicate there was a problem with the roof. We do not inspect roofs! Is this our fault? The boiler broke down. Things happen. That is part of being a landlord. We do not assume the risk of ownership. We just find high yielding deals.
4] Have you been in touch with the BBC before or after Inside Out was aired? If so, what was said? Were any harsh words exchanged? Did you punch anyone in the face (or want to)?
Please see what we sent the BBC (link removed because website no longer exists).
5] There was a bit of confusion about the whole mailing address thing, and for some reason, the media tried to make it appear sinister. So clear it up for me, why do you have a mailing address, with no offices or assets? Do you actually have any physical offices where your employees operate from?
They were outside my offices! I have a contract with a company who provide all my staff. There are 10 on the payroll. This company lease space of a company called Amphenol. Amphenol are a military contractor. When a camera turns up to a military location all hell breaks lose. They would not let the BBC cameras in under any circumstances. The company I contract got in to trouble with Amphenol and I had to remove the word “Amphenol” from my website. This is why I removed the address from my site. I still have my office and we are still very much open and operating for business.
6] The Ahuja group source properties that are BMV to those that are willing to pay for the leads. But you don’t actually give details of the properties until you have received payment. With a business model like that, don’t you think you’re opening yourself up for a lot of dissatisfaction? Don’t get me wrong, I think the people who invest in such schemes and then complain are idiots, because they knew the score/risk. And if they didn’t, that’s their problem.
Imagine if it was the other way round. We market a deal, 10 clients say they are interested and we give them the address. I can assure you that when one of those 10 say they want the deal the deal will be sold. This is because one (or more!) of the other 10 have gone behind your back and gone straight to the owner and bought the deal. Its called cutting out the middle man. We do not have exclusivity on our deals or if we do it is only for 48 hours max. We have learnt the hard way so we NEVER disclose the address.
My business is for proper investors. I buy properties based on 2 variables:
- Property size
I do not need pictures, post codes, condition etc. I own 200 properties but probably have only visited half of them I do not need to see them. If a surveyor thinks they are mortgageable and worth the money then that is good enough for me. For my clients we present as much info as we can but most of our clients do not need to visit either. Its bread and butter properties. 1/2/3 bed flats and houses in small towns and cities. Nothing more than £80,000 most of the time. Very boring properties!
7] Are you still worth 15m, even in today’s climate? Because I swear you’ve been supposedly worth 15m for some time now, even before the recession. Surely you’ve lost a few bags of change along the way. Don’t worry, if it makes it any easier- you, your wife and I can hold hands and all say it together, “the recession has made me less valuable”
My portfolio stands at 194 properties. I do not carry out valuations on them but lets say they were worth £15m at the peak. A 20% reduction has been seen max over the last 2 years. So worst case scenario a reduction of £3m. So £12m to £13m value probably. Maybe a bit more.
8] Stretching from the previous question, I’m just going to ask straight out, ARE YOU STRUGGLING FINANCIALLY? I’ve read that you’re not as comfortable as you used to be due to the recession. I made a facetious comment in my previous post about you driving an old shape Benz, which didn’t seem to fit the lifestyle of a man worth £15m.
Is there any truth in your financial struggle? Or perhaps we’ve all got it wrong, and you’re still living life like P-Diddy.
Let me put it like this. Back in 2007 my rents were £55k and my mortgages were £40k and I lived in a 4 bed house.
In 2009 my rents are £60k and my mortgages are £16k and I live in a 8 bed house. That’s £44 gross per month!
The car you saw was one of my cars. I also have a Porsche Cayenne Turbo and my wife drives a Smart Brabus Convertible (her dream car).
I love old Mercs. The old Merc you saw is a CL500 and I love it more than my characterless Porsche!
9] Have you actually ever been worried about the condition of the property market? I’m a subscriber of your newsletter, and you always seem so upbeat and positive (I guess you have to be, since you’re trying to sell a product). But I find it hard to believe that you’ve consistently been so positive throughout the entire recession. Haven’t you ever thought, “Shit, I could lose it all?”
When you have interest rates sitting at 0.5%, Libor at 0.6% and most of my borrowings with Mortgage Express it would be pretty difficult to cock it up! Things are very good for investors right now.
The time whilst the rates were at 5% and the recession was hitting wasa tough time but you hang on in there. That is what business is all about.
10] Are you still buying property right now, or have you taken your foot off the gas? What/where was your most recent purchase?
I have bought a couple of places in the last 3 months. A 1 bed bungalow, East Ayrshire, £17,650 and got a mortgage for £21,000. So a cashback and a 20%+ yield! The other one was a 2 bed flat, Motherwell, £25,000 worth around £40,000.
Well, there you have it, folks. What did you think? I thought he avoided a few of my questions quite well, but that was expected. But the majority of his responses seemed reasonable!
I’m still in no real position to judge Ajay’s business acumen because I don’t know enough about his operation, and probably nor do you. No matter what you hear or read, it probably isn’t always the entire truth. The sad truth is, we, as humans, like to talk and hear about bad press rather than the good, which maybe what works against Ajay.
But one thing is for damn certain, anyone who is grossing £44k per month must be doing something right, even if it’s through wrong. Now, I wonder how much of that is net…
I’d just like to thank Ajay Ahuja for answering my questions and clearing a few things up. From the word go he was accommodating and willing to answer all the questions I threw at him, and I appreciate that.