Motor home as investment?

Mistermeaner

Phew sorry martin

silverwhistle

Cornucopia wrote: »

It won't be to you, it will be to MSE.

Possibly, but you're still being an utter tart and for all your protestations of innocence I don't understand why. Explain in full why it is a good deal or accept the fairly reliable rule that if it seems too good to be true, it is.

Eco_Miser

Raine1 wrote: »

Colsten - are you suggesting that I have some kind of link with this company ? I can assure you I have not. You think it is strange that someone would join this forum and ask a question about a specific company and idea? Isn't that the point?? I have read posts on here before but just joined today so I could post.

There are an amazing number of people whose first post here is to ask about a marvelous, but unregulated, investment opportunity. They may stick around for a few posts, and insist that they're not shills for the company they're asking about, but come up with a detailed knowledge of the product.

It's so easy for the regulars to become cynical.

Others post back to thank the likes of Colsten for saving them from a scam.

It's hard to tell which a new new poster will be, and I guess some people just play the percentages.

Raine1 wrote: »

I am just a normal person with a job (nothing to do with motorhomes!) trying to decide if this is a really good idea or a lemon. I thought I would come here to gather opinions because of course the marketing makes it sound attractive and I wanted an independent view from people more used to investments than me

Well, you certainly got that.

Raine1 wrote: »

Thanks all - food for thought

Raine - real person, nothing to do with the company and rather disappointed to be accused of some kind of sneaky (and rather laborious and weird) advertising...:(

Rather common kind of advertising actually.

CKhalvashi

Did we not decide the entire model is very risky on a thread a few years back, and it then transpired that the person originally asking the question had done a lot of marketing work for this company, despite being an 'independent' journalist?

Yes, it's possible to make money from it, but I'd say the chance of actually making enough return to make the payments on the loan are very slim, hence the company aren't doing it themselves.

What happens when the said motorhome is crashed/trashed/taken from the country and not returned? Who is paying then?

bowlhead99

colsten wrote: »

The contract isn't worth the paper it is written on if the other party goes bust. There is no guarantee whatsoever. You could take them to Court but if there's no money there's no money.

This is factual and not at all libellous. It is a standard risk with making loans, even secured ones. Lending money on an unregulated investment is not at all comparable with money in the bank.

Of course the website would paint a blue sky picture.

and they do: making it sound like it is something that should be compared to the return on your savings in a bank account, even though it is an unsecured unregulated investment with 100% loss of capital possible

Low Interest rates mean that savings returns are at an all time low - most savers are unable to live off their savings interest payments alone.

Until now.

...
We BELIEVE that investments should be win-win. Which is why we've produced the UnbeatableInvest Guide.

The UnbeatableInvest Guide reveals a tried, tested, trusted way to a guaranteed 30% return on your savings and get complimentary motorhome holidays.

That is the sort of advertising copy you see on unregulated investment scams, Nigerian spam emails and so on which appeal to greed and where the advertiser feels they have no obligation to present the facts in any kind of reasonable way that highlights risks.

Imagine going to a bank website or a regulated financial investment firm and they had a really cheap looking page where they were shouting some of the words in CAPITALS and underlining others and using random background yellow highlighting and bits of red text to try to get you excited . Any sensible person used to being presented with reputable financial products and investment opportunities would run a mile.

This is not libellous, merely statement of fact.

If there was any possibility for a 10% return and no capital loss, why wouldn't the owners take out a huge loan at anything from 3-6% and cash in on the 10% return?

Again fair comment. However, you're probably looking at it wrong. You're exactly right that they would borrow as much as they can and invest it themselves. That is what they are doing. They are borrowing as much as they can from you, at 10%, and investing it at 20% or whatever gross return they think is available. They have a possibility of a high return and no chance of a capital loss.

There is no risk of capital loss to them because they will either make their 20% and give you back 10% and keep a profit, or they will make some amount lower than 10%, pay their running costs and be left with say 5% or 0%, and give you back the 5% or 0% before going bust. That is the beauty of running a limited liability company. They can only lose what they put in.

If you put in £36000, they have £36000 to buy motorhomes with. If the motorhome is worth less than £36000 at the end, they won't pay back the £36000. So they have not lost their money they have lost the lender's money. That is why it is risky to be the lender and not at all comparable to a bank account, and entirely disingenuous to start their advertising copy "most savers are unable to live off their savings interest payments... until now... you could get a guaranteed 30% return on your savings". The guarantee is not worth it if they become insolvent.

It's a carefully constructed marketing ploy to relieve the uninitiated of their money. Part of the ploy is to post as a potentially interested investor on forums that you don't normally frequent.

Cornucopia wrote: »

Without any evidence, your posts are becoming potentially libellous.

That cannot be libellous. It is entirely true that the website, which is marketing an unregulated investment opportunity by comparing the potential high risk returns from the investment to the standard returns people get on 'savings' (deposits in a bank account, saved for a rainy day), is a 'marketing ploy' designed for the uninitiated. You would not market to sophisticated professional investors with that language or that technique.

It is also entirely true that such ploys are often supported by someone going onto a consumer forum on which they don't usually post, and asking 'innocent' sounding questions about a potentially lucrative investment opportunity they allegedly just heard about. It happens several times a month on this site and is one of the reasons that new forum members are not allowed to post links.

Highlighting the risks of overhyped unregulated investments and common marketing devices is not libellous.

Also even if Colsten had come out and specifically said that Raine1 was part of the company and perpetrating the scam - rather than just noting that other such scams were often perpetrated by someone coming along and asking newbie investment questions about their own website - is not libellous. Under the Defamation Act 2013, the person who has been wronged has to show actual or probable serious harm. Raine1 is anonymous to us and is simply a screen name with zero posting history on this site. As such, he or she the individual in real life is not going to suffer serious harm if we all call out Raine1 a scammer. Which I am not doing by the way.

Also, it is a defence for defamation to show the imputation in the statement complained of is substantially true. If one or more of the imputations is not true, the defence does not fail if the imputations not shown to be true, do not seriously harm the claimant’s reputation.

IMHO, pointing out that the advertorial is misleading, that the providers of the opportunity are unregulated, that the opportunity has risk of 100% loss, that the advertisement uses common techniques used by scammers and unregulated firms, that the company would not give 10% return to 'savers' if it were creditworthy with high quality assets and capable of raising the same level of funds from institutions at much lower rates... these all seem like true facts.

And besides, even if not true facts, a defence is 'honest opinion'. So if a statement complained of was presented as an opinion which indicated in general or specific terms the basis of the opinion and is one that an honest person could have held, the defamation case would certainly fail. "I think this is a scam" is something you can say, particularly if you are saying why.

Cornucopia wrote: »

Sorry, you simply cannot go around libelling companies like this.

If you have evidence that it is a scam, post away. Otherwise, you really do need to stop saying it.

Seems to me that ggb1979 was posting an honest opinion backed up with reasons for the opinion.

You haven't even understood what the 27% means. It equates to about 8.5% per year, before tax at 20%. So just under 7% net. That's the kind of return you used to get from the Banks.

No, you haven't understood what the 27% means if you are thinking it is averaging 7-8.5% a year for comparability with other opportunities. You aren't paying money out and getting 'nothing nothing nothing' for 3 years and then your 'original money plus 27%' in one bullet at the end.

In the example of the car leasing (the 'reasoned critique' on AOL which you linked), you pay out a lump sum and then immediately start getting your money back. The £250 coming in each month is £9000 over the three years, but does not happen at the end of the three years, it happens over the three years, some of it after as little as a month, so on average it is happening after 1.5 years.

So in the car leasing example the 33% total return in 3 years is not a simple-to-calculate compound 10% pretax. The annualised rate of return based on how long the money is outstanding is more like 14%. That is 28 times the central bank base rate.

To say it's "just under 7% net, that's the kind of return you used to get from the banks" implies it is not too much different from savings rates of the good old days and that the rate is not a red flag because it's not unrealistic to achieve that rate at relatively low risk. But actually it's an astronomical return, about twice the rate of the 7% you might get on the stockmarkets long term. If someone was actually considering investing in a FTSE tracker and mentioned it on this forum, they would likely be warned that it was 8-9 on a risk scale of 1-10 with cash being 1. So, what is the risk of an investment that targets 14% return? Very high is the answer.

So, "Finally, your savings really can beat the banks’ abysmal interest rates and provide unbeatable holiday experiences for you and your family." ? Well, maybe they can beat the rates but that is not to say they will beat the rates, as there is huge risk, and if you put your money into this product it would not be saved it would be invested.

Cornucopia wrote: »

The virtue as I understand it is that the vehicle is a tangible asset that you own, and which has a value.

Not at all in the case of 'Unbeatable Hire'. As per one of the investor testimonials on their front page "The investment was converted into a number of loans that are secured by Chattel mortgages." And from another "It is exactly as described – an investment secured on a quality motor home by way of a copper bottomed chattel mortgage".

So basically
- you lend them cash;
- they use it in their operating business;
- they 'secure' your loan on a moveable chattel (a wasting asset with limited life which declines in value through use) rather than fixed property;
-if they have enough money to pay you back each month or at the end you will hopefully get it;
- if they default you can ask them to sell the asset(s) but may find them worth way less than your loan because the loan-to-current-market-value at a point in time is not fixed and even if it were 'guaranteed', the business providing the guarantee may fail.

The risk is perhaps spread because the investment is structured as 'a number of loans' secured on different assets. But ultimately they are all managed by the one business and other lenders will have their loan parcels spread over the various assets, you will not necessarily get the money back.

Certainly what is NOT happening in the motorhome investment is you owning a vehicle. You lend them money to buy vehicles, at a return of 10%, just like Nationwide lend people money at 2% to buy a house. They recognise that the 10% is not nearly enough to incentivise someone to take the high risks and so they let you use one of the motorhomes for a holiday for some number of days at some time of the year which they hope you see as a perk and an enhancement to the 10% potential cash return.

The 10% they pay is much more than the 2% that Nationwide would demand on a house because in Nationwide's case they are securing it on an asset that appreciates in value over the long term, cannot move anywhere, is someone's home so unlikely to be defaulted on, and they have checked a lot of the borrowers' details to assess creditworthiness, ability to keep up repayments etc.

By contrast if you invest with UnbeatableInvest, it is secured on an asset that depreciates in value over the long term, can move (including internationally), is not someones home but simply a vehicle that's temporarily borrowed by a holidaymaker for a week at a time for a quick cash payment, and you have no real ability to check the business's details to assess creditworthiness, business plan, ability to keep up repayments etc.

Apparently according to the logos on the UnbeatableInvest site, the business has been going since 2002, and you are invited to join 'over 280+ investors'. Many legitimate regulated investment firms have 10,000 or 100,000+ clients and high street banks have millions. If after operating for thirteen years in a country with a population of sixty million, they still only have 280 investors and are seeking more, it strikes me that they are in a 'bit of a niche'.

From me, the recommendation is to avoid the opportunity and I am happy to make that recommendation without assessing anyone's needs or goals.

Glen_Clark

Thanks for that bowlhead. I must confess I didn't bother reading their website because I assume it to be a scam. But your posts are always worth reading :T

bowlhead99

Glen_Clark wrote: »

Thanks for that bowlhead. I must confess I didn't bother reading their website because I assume it to be a scam. But your posts are always worth reading :T

If you've made it to the bottom of one of my posts you've probably done enough reading for the day anyway...:D

jimjames

Cornucopia wrote: »

Sorry, you simply cannot go around libelling companies like this.

If you have evidence that it is a scam, post away. Otherwise, you really do need to stop saying it.

You haven't even understood what the 27% means. It equates to about 8.5% per year, before tax at 20%. So just under 7% net. That's the kind of return you used to get from the Banks.

As you seem so in favour of this, can you explain why anyone would even consider this investment rather than a regulated one in funds via a S&S ISA?

It's not because you've been misled by seeing the word "guaranteed" is it?

dunstonh

Guaranteed in commercial deals does not mean guaranteed in the same way financial products use the term. You can still lose up to 100% of your capital in a commercial deal that has the word guarantee in it.

Mistermeaner

from a contract law perspective guarantee is a meaningless word; any commercial contract has to have a clear set of 'what if....' type terms.

I guarantee your TV for 1 year

.... what happens if it breaks?

option 1: If you phone me I will be at your house within 1 hr with a replacement TV, install it for you and take away the old one, plus compensate you at £10/hr for each hour you were without a TV and claen up any mess I make on your carpet walking in and and of your house, plus reimburse you for any loss of earnings you may incur while you wait for me in your house when you should be at work.

option 2: well you'll have to at your expense and time unplug your tv and put it in your car then drive it to the shop where you bought it from, with all original packaging and documentation including proof of purchase. depending on which manager happens to be in we will take your TV off you and send it to our repair centre, they may repair it in some undetermined length of time and return it to the shop (providing we are satisfied that the failure of your TV is not a result of abuse by you). You'll then have to pick it up from the shop and reinstall it yourself. All cost of time and petrol etc. you incur as a result of our failings in poor manufacture of the TV are completely for your account and you will in no way be compensated for the actual demonstrable direct losses you have incurred.