Is this too good to be true?

Mental_Mentor

Just received this from a buy-to-let broker I use. What do you think? Does anyone know about this development?

Liverpool Property alert



Following the 1st major success of our last property alert, (60% sold within 3 days), we are now have our second property available, with an even bigger discount!! – 20%!!! Off actual market value

The property is know as the Unity Building in Liverpool, the building is very modern and due for completion by September 2006. We have only 3 apartments for sale, but the specification is of the highest standards and would attract only top professional tenants. The rental income that could be achieved is in the region of £1200-1300 pcm.

Again we are not in the business of inflating prices, but this is the exclusive deal that we have negotiated if you would like to purchase: Current market value, £230k, nett price of £185000, deposit required to purchase the apartment is £11500, instant equity of £45000. PLEASE NOTE THAT WE HAVE ONLY 3 APARTMENTS AVAILABLE ALL WITH PARKING.

Option 1

PP £185000 Mortgage advance £157250 Deposit to pay £27750 Rental income £1250 pcm Mortgage payment £615.89 @ 4.70% INTEREST ONLY



Option 2

PP £230000 Mortgage advance £195500 Deposit to pay £11500 Gifted deposit £34500, PLUS £22000 cashback, Rental income £1250 pcm Mortgage payment £825.50 pcm @ 5.08%



Our terms and conditions are that **** (company name) property will charge £100 reservation fee per property upon your mortgage application being accepted by our lender which is non-refundable and a further £1495 on completion using our solicitors who charge £349-£399 plus VAT & Disbursements

We are not in the business for the quick fast buck, but for the long haul and build up relations with developers and our clients alike; we are in negotiations with 2 other major house builders at the moment and should have some more properties for sale very soon.

If you would like a brochure on this development, please email us a.s.a.p. we anticipate that these units will be sold by the end of next week.

Many thanks

Mental Mentor

lynzpower

Does liverpool really get that sort of rental rate?

AndrewSmith

Sounds like an un-necessary reason to be charging £1595 total in fees for nothing.

If it is so popular and a sure winner why are they having to drop the price by 20% to sell? The answer is that they are not. They overinflate the asking price then discount it to make you think you are getting a good deal.

Also, I hope your mortgage broker has declared his interests in this property development company to the FSA? I assume he has a connection to it when he refers to it as 'our' development etc.

If they are expecting the properties to sell so well and they are as good as they say why have they not sold off plan long before the property is complete as per any 'normal' prestegious development? Very strange for them to be completed in September and not sold already especially if this is the business they are in.

When developing properties like this you make sure that you have detailed plans and artist impressions from which to market the property prior to completion. Any good developer would already have interested parties in such properties. They certainly wouldn't hedge their bets on 'spamming'. Jokers.

As Lynzpower says, check the rental figures out. What have they based that on in an already saturated buy to let market?

Personally I would never hand over any money to this sort of thing. I would forget it and click the 'trash' button on your email inbox.

ally1_2

Why not approach the developer yourself (or his estate agent) to see if the deal is true. I would also speak to a local lettings agency about the rent. £1250 sounds steep!!! I also think they are a bit low on the mortgage payments especially if its a buy to let mortgage.

samspam

I found this link for you:

http://www.yoliverpool.com/forum/showthread.php?t=1180

It's a chat forum on the Unity Buildings.

I would contact the developer directly for a discount, it could be that they only have a couple left to sell. The price will have been inflated over the time of the development but if they need to sell the last couple you could get a good deal, maybe even lower than the first release prices.

Don't buy through an investor club, you don't need them if you do your own research.

There is a lot of money in Liverpool, not sure about the £1250 rental income though, check it out with some local agents first.