Has anyone dealt with Experience International for the student property market?

Charki

I am interested in buying a studio in a block of University student accommodation. Experience International offers off plan purchases with incredible sounding returns of guaranteed 10% net after management costs per year for five years and then a buy back option with a 10% uplift on the purchase price. They are building a student block in Luton called London Park and say planning permission has been granted and it will be ready in September 2014. How can one find out if it is a genuine development? You have to be a cash buyer and you pay in installments till it is built and ready for occupancy. There are other developments as well like Vita Student who offer similar but slightly less attractive rates. Is it the next big thing or is it a case of if it sounds too good to be true it probably is?

Wiggs

Did you end up investing in a student studio? I have recently looked at the next Vita student development offer but not sure of the risks or that I may be being overly cautious and may miss a great long term opportunity!

How did you find the process?

eddddy

An acquaintance of mine is keen to invest in these types of schemes - so I read through the leases, contracts, marketing info of some schemes in some detail.

A key thing to check out is the financial viability, integrity and track record of the developers. (I found a couple of firms being run by people with histories of company bankruptcies, investors losing their entire investment etc.)

Make sure you read and understand every word of every lease and every contract. I found some horrendous 'get out clauses' in favour of the developers. Ideally, get them checked by your (not their) solicitor.

The contracts said that you must not rely on anything a salesperson or marketing brochure says - only what it says in the contract. So, put another way, ignore absolutely everything the salespeople and brochures say - as it may not be true.

Of the opportunities I looked at, I wouldn't have touched any of them with a bargepole (but I didn't look at Vita).

dimbo61

Now I looked on the internet to see London Park Luton and find a website and rooms available at £140-£180 a week on a 51 week contract. Nice photos and we all know the London rental market is crazy.
How can they Guarantee a FULLY Tenanted building!
What happens if 2/3/4/20 rooms are empty? Your room being one!
You have to pay cash ! Why because no Lender will give a mortgage on a room in a block of flats.
Waste of time and money, run a mile.
They promise 7/8/10% return for the first 5 years but what after that?
Buy back ( You cannot sell to anyone else) at 10% more than you paid in 5/6 years time !!!!

Even the phone number to book rooms is a 0844 number

eddddy

dimbo61 wrote: »

...
They promise 7/8/10% return for the first 5 years but what after that?
Buy back ( You cannot sell to anyone else) at 10% more than you paid in 5/6 years time !!!!
...

If those promises were backed by cast-iron guarantees, that would be fine - investors could make informed decisions.

The problem is they are not (at least in the contracts I looked at). But I had to carefully read 100+ pages of contract to find that out. As I recall in one contract, the biggest bombshell was on page 70. I wonder if some investors don't read that far, and/or don't fully understand the contractual language.

Because these are unregulated business investments, the developers don't have to warn you about risks etc.

Even worse, the developer could just go bankrupt.