Property SIPP

Beejayab

I am considering transferring one of my pension pots into one a a choice of property SIPPs which claims to offer security over the investment and a return of between 7 & 10% PA. Does anyone have any experience of these.
Thanks
BJ

Al.

What's the property investment? The words 'guaranteed' and 'property' mentioned within fifteen seconds of each other usually cause my attack warning radar to light up.

Beejayab

Here is what is proposed:-
Short Term German Property Investment 10% Fixed Return.
LOCATION: Germany MINIMUM TERM: 3 years
INVESTMENT MIN: £20,000 RETURNS MIN: 10% pa
RETURNS MAX: 10% pa ROI: 60%
Our German Property Fund features a fixed term and a fixed return with a full 5 year track record, several different investment options are included, for example “Invest for Income” or “Invest for Capital Growth”.
Full due Diligence pack available providing evidence of successful trading for over 5 years in this market.
SIPP and SSAS compliant and approved and transaction conducted using UK and German Solicitors.
Cash Investment from £10,000
SIPP Investment from £13,000
Invest for income pays Bi-annual return
3 and 5 year investment terms
Fixed returns 10%
Secure structure with first legal charge on property as security

bigadaj

Who is or are the companies involved and how did you hear about this?

Beejayab

The company is Millbak Wealth Limited and they advertise property investment on the internet.
They act as brokers for the investors with the developers.

PensionTech

Looking for the words you've used, I found this site:

http://millbak.com/short%20term%20german%20property%20investment.html

Unfortunately the page itself has been taken down, but you can still see all the other investments they have on offer:

http://millbak.com/products-services/

Of course we can't say whether it's a scam or not. But overseas property, car park, storage, hotels - these are all the kind of things that tend to be associated with pension scams, and doubly so when they're being sold with assurances about "security". This can be a really good way to lose your pension savings. Look at this leaflet produced by the FCA about the warning signs that you're being sold a dodgy investment for your pension: https://www.fca.org.uk/static/fca/documents/protect-your-pension-pot.pdf

Not too long ago, a lot of people were being sold the same kind of opportunities for investment in self-storage. You can see how that went by reading through this thread: https://forums.moneysavingexpert.com/discussion/3866319. Towards the end you get to see what's happening now that the house of cards has started to tumble.

The offer you've received may be legitimate but it rings too many alarm bells for me. I would personally stay away altogether; it's not worth the risk of being scammed. At the very least you should:

• Make sure that everyone you speak to is regulated by the FCA - and check their credentials on the Financial Services Register, don't just take their word for it.
• Read the FCA's ScamSmart page http://scamsmart.fca.org.uk/ and TPR's booklet on pension scams http://www.pensionsadvisoryservice.org.uk/content/publications-files/uploads/members_detailed_booklet_7_page.pdf
• You won't be given any impartial or regulated financial advice for free. Be very suspicious of anyone offering you advice if you don't know what they're getting in return.
• Don't sign anything without fully understanding what you're giving up and what you're getting in return, and speak to someone disconnected from the process (like an IFA, or TPAS) to help you understand that.
• Don't believe anything about investment returns being "guaranteed".
• Be suspicious if the investments are unregulated (check on http://scamsmart.fca.org.uk/warninglist/). Not all unregulated investments are scams but even where there are no warning signs, they should only be used by sophisticated investors, and even then only in very small portions.
• And if it sounds too good to be true...

jamesd

Beejayab wrote: »

I am considering transferring one of my pension pots into one a a choice of property SIPPs which claims to offer security over the investment and a return of between 7 & 10% PA. Does anyone have any experience of these.

If you want something legitimate the EvolutionSIPP available via SIPPClub offers legitimate peer to peer investments secured on property, from buildings through land and other assets. Returns, ignoring potential losses, at and above those you have mentioned are available at times. Scroll down to check the eligibility requirements at the bottom of the page first, most people will not meet their requirements.

You might also find the discussion of storage units and airport parking spaces of use. Note that up to 46% of the investment made can be paid in commissions. Too many of the things that the place you have mentioned sell are of the less than good end of the market for me to be happy with the thought of doing any investing with them. It implies that their own due diligence is insufficient and that exceptionally high commissions may be their main driving factor.

dunstonh

See that chunk of money riding off in to sun never to be seen again....

Al.

Beejayab wrote: »

Here is what is proposed:-
Short Term German Property Investment 10% Fixed Return.
LOCATION: Germany MINIMUM TERM: 3 years
INVESTMENT MIN: £20,000 RETURNS MIN: 10% pa
RETURNS MAX: 10% pa ROI: 60%
Our German Property Fund features a fixed term and a fixed return with a full 5 year track record, several different investment options are included, for example “Invest for Income” or “Invest for Capital Growth”.
Full due Diligence pack available providing evidence of successful trading for over 5 years in this market.
SIPP and SSAS compliant and approved and transaction conducted using UK and German Solicitors.
Cash Investment from £10,000
SIPP Investment from £13,000
Invest for income pays Bi-annual return
3 and 5 year investment terms
Fixed returns 10%
Secure structure with first legal charge on property as security

I can't say with any degree of certainty if that's good for you. All I can say, is that I certainly wouldn't entertain it for me. You have lots of other reliable options if you do want to go down the property route.

xylophone

You might consider REITS within your SIPP?

http://www.bpf.org.uk/what-reit

Malthusian

A simple question for you to ask Millbak Wealth. If the properties fail to generate sufficient rental income to pay the "guaranteed" or "minimum" 10% per annum, then how will they pay it? Where will it come from instead?