Ok- is this a good idea?.......

tabskitten

princeofpounds wrote: »

I didn't say anything about rent. I stated that you are still the landlord no matter who they put in your house... if they bring in animals, trash the place, prevent your access, you have to deal with it all. You cannot contract away your legal responsibilities.

A promise to pay rent isn't worth all that much if it comes from a shady company. Something goes wrong, fold the company, all you are left holding is a piece of paper with a guarantee written on it (and that's if you can ever find them again!).

Just think about it for a minute - if they put someone in who covers the rent, and then that person starts to damage the house, what happens? You want them out. But you can't get them out because this firm wants them in, so their rent obligation is still covered. How does that get resolved? This is only one of a host of potential problems.

And if it's a tenant find service you need, a local letting agent will do it for a one-off fee and no complicated contracts, lawyers fees or charge over your property. Some will even operate a rent guarantee to secure business.

i see what you are saying- but if it is in their interest to buy the property from me then i should think they will make sure tenants take care.....

i have an agent- but it stil seems that it is more complicated in just finding a tenant as in the end i found this current one myself on gumtree ad the agent was coming up with nothing!

tabskitten

Just thought would post you this email i have just recieved......

Tabs


Great to speak to you today, I'm sure we can help you out!


Before I propose a solution I would like to relay what was discussed on the phone so that we can be sure we fully understand your situation and your needs. On the phone you said that you bought the flat in Feb 2008 for £125,000 and that from your research you believe that to sell it now would cost you £30,000 because of the property market crash. You suggested that you would sell the flat if you could get what you paid for it. We discussed the problems with keeping tabs on tenants, especially from a long distance away. You explain that your tenant has suggested she may look for somewhere else to live as she can't afford the rent. You also said that she is currently in arrears of £1200. I explained that we will buy the flat once the value has increased passed what you owe on it so that the price we pay is significantly less that the value.


Please inform me straight away if you feel that I have misunderstood anything.


I spoke to Matt after we got off the phone, he's a lovely chap and a bearer of good news. You are on a capital repayment mortgage which means that each month as well as paying the interest on the mortgage you also pay a small amount off of the balance that you owe. This is good because:
You will have paid off some of what you owe during the lasts 2 years so when you sell the property you will get this back!
We can change the payments going forward to interest only therefore reducing the monthly payments.


Now let me explain the benefits of not selling to us:
You will get your money back quicker if you don't sell to us - you can sell as soon as it's worth what you paid!
You can change your mortgage to interest only therefore reducing the monthly payments and profiting a small amount on the rent.


Our proposal
We guarantee to pay your mortgage for 5-8 years whilst the property increases in value.
We pay you £130,000 (£5,000 more than you paid)
We pay the mortgage regardless of whether the property is tenanted.
We pay the management company that maintains the communal areas of the flats.
We take full responsibility for maintaining the property.
We charge you no fee for the management or maintenance of the property.


Previously I had suggested 5-7 years, I have increased this to 5-8 years because of the level of negative equity. Our intention is to buy the property as soon as it has increased in value enough to enable us to finance the purchase.


I'm sure you have lots of questions, I look forward to answering them!


Thanks


Barry
07766 524 858

SignificantAlter

Sound like you're bullishly going to go for it anyway, despite the warnings of respected, well experienced posters on this board.... so go for it.

You don't seem to be able to understand the concept that you don't ever get something for nothing in this life, and that you are going to get ripped off mercilessly.

tabskitten

SignificantAlter wrote: »

Sound like you're bullishly going to go for it anyway, despite the warnings of respected, well experienced posters on this board.... so go for it.

You don't seem to be able to understand the concept that you don't ever get something for nothing in this life, and that you are going to get ripped off mercilessly.

THAT IS VERY RUDE
1. if you read the previous posts i have thanked people and informed them that I am LOOKING INTO it with no promise to anyone.
2. Where and When did i state i was going ahead?!?
3. I do not expect something for nothing- the 'catch' would be that if the market rockets within the 8 years that i cannot sell and make a profit.... I am not stupid and fully aware that we all have our own motivations in business, but i also find the potential of not having to worry about affording my mortgage attractive, hence am LOOKING into it.

BitterAndTwisted

It really doesn't matter what someone will promise you either on the phone, in an email, or in a letter. What is important is what is written in the contract and whether these people do what they say they do and that you can find documentary evidence of it. This would only prove what they have done in the past and maybe what they are doing today BUT NOT what might happen in the future. That these shysters don't have a registered company number or an address on their website should be ringing MASSIVE alarm bells with you. It is with me and I don't even own a property to lose down the lavvy

tabskitten

BitterAndTwisted wrote: »

It really doesn't matter what someone will promise you either on the phone, in an email, or in a letter. What is important is what is written in the contract and whether these people do what they say they do and that you can find documentary evidence of it. This would only prove what they have done in the past and maybe what they are doing today BUT NOT what might happen in the future. That these shysters don't have a registered company number or an address on their website should be ringing MASSIVE alarm bells with you. It is with me and I don't even own a property to lose down the lavvy

Good advice and i have taken that on board.
As said- no harm in looking into things, don't worry i do not intend to sign or agree to anything without at the moment.

adg1

I have some issues with companies like this.

Firstly, and most importantly, what do they get out of it? They will pay your mortgage, tenanted or not. So, why would they pay this then only sell it when you are out of negative equity. They then, I suppose, have your asset in a rising market and can make a good profit on it.

Secondly, (Quoting) 'I explained that we will buy the flat once the value has increased passed what you owe on it so that the price we pay is significantly less that the value'. So, they buy it when you are out of negative equity but at a level that is below the actual market value that you could get if you sold it privately. This may be how they finance themselves.

They also say in the email that there are benefits of not using them. These seem to be exactly the same as the 'benefits' but without them finding you a tenant in the meantime.

In my opinion this seems far too good to be true so you will lose out somewhere. Its how they make their money.

Googling the business partners name Benjamin Leppier brings you to another property investment network. As soon as I hear that type of company I tend to stick well clear. Search this forum for 'Inside Track/Instant Access Properties' for some info on this.

The motto that something which sounds to good to be true then it probably is stops people falling into scams.

I think this is too good to be true. They pay everything for you until you are out of negative equity then they buy the property leaving you with no debt on it - great! However, you have no asset left and they can keep hold if it in a rising market until they make a tidy profit, something you could have done had you used an EA to let and manage your property for you then sold when the value rose enough.

I think the general consensus is to avoid this as they have to make money for this to be viable and the only way they will make money will be from you.

chappers

Be wary be very wary.
These guys don't even have a postal address on their website, not to mention they look like a pair of dodgy car salesmen.
Thirdly they appear to be running suspect property investment seminars, which usually try to sell you dodgy property that no one wants with the same promises they are offering you.
If i were you i would keep control of who you are letting to,. after all you will still be the LL who is ultimately responsible and also you will still be ultimately responsible for the mortgage.
Worst case scenario they actually find you some tenants they turn out to not pay the rent SPI don't pay you mortgage goes unpaid ...... I'm sure you can fill in the rest.

adg1

Plus I wouldn't trust anyone who uses a nickname like 'Baz' when they do business.

Additional (only just noticed) -

Check out this page from another company owned by Baz and Ben Leppier:

http://www.smartpropertyinvestment.co.uk/general/welcome-to-your-investment-dream

The first line is 'Welcome to Smart Property Investment, we buy superb below market value properties for ourselves and other property investors'.

I wonder where those superb below market value properties come from eh???

tabskitten

adg1 wrote: »

Plus I wouldn't trust anyone who uses a nickname like 'Baz' when they do business.

Additional (only just noticed) -

Check out this page from another company owned by Baz and Ben Leppier:

http://www.smartpropertyinvestment.co.uk/general/welcome-to-your-investment-dream

The first line is 'Welcome to Smart Property Investment, we buy superb below market value properties for ourselves and other property investors'.

I wonder where those superb below market value properties come from eh???

thats interesting thank you for the help!!:D
will be very careful!