Buying From BMV Company

G_M

Gareth78 wrote: »

Right, firstly my parents tell me they "are not mugs"(!) and wont sign/pay for anything until it has been looked at by a solicitor so not to worry on that front. Is this your view too?

Secondly, according the this company, the property is being sold as part of a "portfolio break up" (their words) whereby the LL is selling a number of properties and has passed them to this company for a discount So this company is buying the property and then selling it?which is being passed on to possible investors. The way the company make their money is through the 2.5% fee which they have referred to as a "finders fee". + the profit from the difference between buy/sell price!(I think that was the basic gist of the conversation my father has with the person at the company).

Thirdly, the tenants are 2 months into a 1 year "rolling" contract No such thing. Either it's a 1 year contract, or it's a periodic contract, something which can be confirmed / denied by them tomorrow when my parents go to view. How much experience /knowledge do your parents have of rental law and practice?
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Hopefully your parents will approach this slowly and cautiously.

Gareth78

Right, firstly my parents tell me they "are not mugs"(!) and wont sign/pay for anything until it has been looked at by a solicitor so not to worry on that front. Is this your view too?

Secondly, according the this company, the property is being sold as part of a "portfolio break up" (their words) whereby the LL is selling a number of properties and has passed them to this company for a discount So this company is buying the property and then selling it?which is being passed on to possible investors. The way the company make their money is through the 2.5% fee which they have referred to as a "finders fee". + the profit from the difference between buy/sell price!(I think that was the basic gist of the conversation my father has with the person at the company).

Thirdly, the tenants are 2 months into a 1 year "rolling" contract No such thing. Either it's a 1 year contract, or it's a periodic contract, something which can be confirmed / denied by them tomorrow when my parents go to view. How much experience /knowledge do your parents have of rental law and practice?

Thanks for your input G_M.

In answer to your questions, I obviously would absolutely agree that they got a solicitor to check everything out before any money changed hands or contracts signed.

I dont think the company will ever have possession of the property themselves as you can no longer buy and sell the same property within 6 months (to the best of my knowledge after some brief research online) so this would make the transaction impossible and therefore I dont think there would be any difference between the buy/sell price. I may be wrong but the research i have done suggests this. Maybe someone could clear this up?

I assume the term "rolling" was used because the tenants have indicated they want to stay for a significant period of time although this question will hopefully be cleared up for certain when they view tomorrow.

My parents have limited knowledge of rental law and practice, hence wanting solicitors to check everything out before they "put pen to paper".

Once again thank you for taking the time to answer my posts, i'm sure more will be revealed during and after the viewing tomorrow.

Colincbayley

Gareth78 wrote: »

I dont think the company will ever have possession of the property themselves as you can no longer buy and sell the same property within 6 months (to the best of my knowledge after some brief research online) so this would make the transaction impossible and therefore I dont think there would be any difference between the buy/sell price. I may be wrong but the research i have done suggests this. Maybe someone could clear this up?QUOTE]

You can buy and sell a property 20 times a minute if you wish!

However mortgage lenders will want to know why it was sold, purchased and then sold again in such a short period of time. Other than that, there is nothing stopping you from doing so.

MobileSaver

Gareth78 wrote: »

They charge a £1000 reservation fee plus £495 administration fee which are both refunded on exchange/completion and say that should the deal fall through through no fault of my parents, the fees are fully refundable (all of which is stated in the terms and conditions on the property brochure). They also charge 2.5% of the sale price of the property as their fee on completion (as far as I can make out, the reservation fee and administration fee are taken off of this 2.5% charge.)

A classic scam with property investment companies involves getting the "mug" to part with large upfront fees on the promise that they are refundable when in fact that money will never be seen again due to a hundred and one excuses/reasons.

Broadgate Residential Investments's web site T&Cs contradict what you say the brochure says...

The Purchaser understands that when reserving a property through Broadgate Residential Investments Ltd, any reservation fee required is non refundable. The Purchaser understands that such fee will be passed to the vendor on his/her behalf and therefore remain non refundable.

Should the purchaser not be seen to be making fair and reasonable progress to exchange on the date set ... the reservation fee and arrangement fee will remain non-refundable

Coupled with the fact that this company was only set up a few months ago, if I were in your parents' shoes I would run a mile.

If they are adamant they still want to go ahead then please, please convince them not to pay anything up front but instead agree for the fees only to be paid on completion.

G_M

Gareth78 wrote: »

In answer to your questions, I obviously would absolutely agree that they got a solicitor to check everything out before any money changed hands or contracts signed.
They will need a solicitor experienced in landlord/tenant law, as well as conveyancing. Different specialisms.

I dont think the company will ever have possession of the property themselves as you can no longer buy and sell the same property within 6 months (to the best of my knowledge after some brief research online) so this would make the transaction impossible and therefore I dont think there would be any difference between the buy/sell price. I may be wrong but the research i have done suggests this. Maybe someone could clear this up?
Easy to clear up. This is rubbish!

Once again thank you for taking the time to answer my posts, i'm sure more will be revealed during and after the viewing tomorrow.

Look forward to an update after the visit. If it were me, I wouldn't even waste my time viewing, but clealy it depends how much influence you have with your parents.

FraudBuster

My parents have limited knowledge of rental law and practice,

And they want to run a property investment business and swim with sharks?

Gareth78

Okey Dokey!

Parents viewed the property today at 12.30. Spoke with tenants who seem very nice and confirmed they want to stay there for the foreseeable future. The person from the investment company who showed them round was a "friendly, chatty chap" who apparently made no effort to force a sale upon them. He wasn't pushy, didn't ask them for money or signatures and generally acted like a "normal" estate agent as they viewed. He let them walk around the property themselves and speak to the tenants privately. All things I was, and probably everyone who has commented on this thread so far, was not expecting to hear!

He gave them a copy of the companies full terms and conditions after they asked for a set for their solicitor to run the rule over.

Overall they think the property is definatley "below market value" and in their opinion the figures quoted seem, in their words, "fair".

So the ball has been left in their court - again something I wasn't expecting. There was the usual "we've had other interest" spiel from the guy before they viewed and this seemed to be confirmed by the tenants who said that they were the fourth people to view since Thursday.

So what are your opinions now? In reply to the person who said "how much influence do I have with my parents?" (sorry I can't recall who it was, apologies) errrmmm... basically, none! They listen, of course, but they are their own people who have been fairly successful in business and are, ultimately, pretty single minded.

As far as I can tell they are still pretty interested in it. Could anyone tell me if they do go ahead and pay the reservation fee and admin fee whether, if they paid by credit card, it would be covered by some kind of money back insurance of some kind? (Not sure what the actual phrase is but I think you can get the gist).

Thanks all.

MobileSaver

Gareth78 wrote: »

if they do go ahead and pay the reservation fee and admin fee whether, if they paid by credit card, it would be covered by some kind of money back insurance of some kind?

If they pay by credit card then the credit card company is jointly liable for the service paid for.

However if the T&Cs are as per the BRI website then the fees are non-refundable full stop. You can't use credit card liability to circumnavigate an agreement you have entered into, only to enforce a breach of that agreement.

In other words if there was a clause in the T&Cs that said you could have a refund but BRI refused the refund then you could claim against the card company for the money. If there's no such clause then you can't have a refund unless BRI are in breach of the agreement but as the website T&Cs do not obligate BRI to do anything I do not see how they could ever be in breach!

Are the T&Cs that your parents have materially different to the website ones?

princeofpounds

Still think it's a dumb idea with very little added value. Still can't understand why this bizarre 'investment company' is there instead of a normal estate agent charging half the amount to the seller and not the buyer.

Your parents have to get it into their head there is no such thing as BMV in a commercial transaction. The market price is the market price, and the rental yield is only very moderately attractive.

ILW

I just cannot understand why they do not call all the EAs in the area and tell they want to buy an investment property. Why risk paying up front fees to anybody?
Are they planning on getting a full survey etc done?