MBI and Northern Powerhouse Developments

marinesparks

This is for all the fools (like me) who invested in Northern Powerhouse Developments.
A Yorkshire based company, who's ceo, Gavin Woodhouse, has cost private investors £Millions.
Am new to this site, and hope this can be read by all concerned.

Back in 2013, I invested in two student rooms at Campus House, in Bradford, which cost £120K.via MBI Consulting uk Ltd.
Thought all was ok, as I had a 125 year lease on the two rooms. Payments came through ok until.......

In 2017 I was advised that the rooms would no longer be managed by the new company (now NPD),
and should divest into hotel rooms which I did, at an extra cost of £17k1.

The uplift on Campus house of £12k, plus the initial cost of £120k, plus the £17k1 additional to secure
the hotel rooms means I have now spent £149,100.00. (£149k1).

All companies (too numerous to mention) owned by Gavin Woodhouse, are now under investigation
by the International Insolvency Company Duff and Phelps of Manchester uk. All assets are frozen and they are the interim managers, of all the "companies", for the foreseeable future.

Doubt I shall see any of my investment back, which was all of my Pension Fund.
Can't afford a high court case. Was wondering if writing to the Office of Fair Trading, or an Ombudsman might help me out. Any advice would be greatly appreciated.

eskbanker

marinesparks wrote: »

Doubt I shall see any of my investment back, which was all of my Pension Fund.
Can't afford a high court case. Was wondering if writing to the Office of Fair Trading, or an Ombudsman might help me out. Any advice would be greatly appreciated.

The Office of Fair Trading ceased to exist over five years ago and there isn't an ombudsman covering unregulated investment schemes, which are outside the FCA's (and therefore FOS's) remit. The administration processes are already under way anyway so it's difficult to see what intervention from any other agencies would achieve at this stage.

Painful as it undoubtedly is, the advice to you is the same as to the other posters in the thread, i.e. work on the basis that you'll never see the money again (sounds like you're close to acceptance already) and any eventual recovery should be seen as a bonus. I know it's easy for those of us who haven't been burnt to say what might seem glib, but it's the most realistic approach.

The only straw potentially worth clinging onto is if you were recommended to invest in this by a registered financial adviser, which is likely to have been negligent and worthy of further action against the adviser. However, assuming you weren't advised, what led you to commit your entire pension pot to this scheme, if you don't mind me asking?

AnotherJoe

marinesparks wrote: »

This is for all the fools (like me) who invested in Northern Powerhouse Developments.
A Yorkshire based company, who's ceo, Gavin Woodhouse, has cost private investors £Millions.
Am new to this site, and hope this can be read by all concerned.

Back in 2013, I invested in two student rooms at Campus House, in Bradford, which cost £120K.via MBI Consulting uk Ltd.
Thought all was ok, as I had a 125 year lease on the two rooms. Payments came through ok until.......

In 2017 I was advised that the rooms would no longer be managed by the new company (now NPD),
and should divest into hotel rooms which I did, at an extra cost of £17k1.

The uplift on Campus house of £12k, plus the initial cost of £120k, plus the £17k1 additional to secure
the hotel rooms means I have now spent £149,100.00. (£149k1).

All companies (too numerous to mention) owned by Gavin Woodhouse, are now under investigation
by the International Insolvency Company Duff and Phelps of Manchester uk. All assets are frozen and they are the interim managers, of all the "companies", for the foreseeable future.

Doubt I shall see any of my investment back, which was all of my Pension Fund.
Can't afford a high court case. Was wondering if writing to the Office of Fair Trading, or an Ombudsman might help me out. Any advice would be greatly appreciated.

Can you explain how all your pension money ended up in these investments. Knowing that might give a route to who (if anyone) you can claim against. I can't think of how I could have invested all my pension money in these. So something screwy was going on.
Note, I'm not asking why, I'm asking about the mechanics of how you did it. I don't know how I could do it even if I wanted to (if I assume they were still running)
And also, and critically, was someone else involved, in advising you to do this ?

AnotherJoe

eskbanker wrote: »

However, assuming you weren't advised, what led you to commit your entire pension pot to this scheme, if you don't mind me asking?

Here's my guess.
Starting point, "the stock market is risky you could lose all your money look at xyz company going bust".
"Property is real and solid and always goes up and provides an income you cant possibly lose"
Therefore, for your pension invest in property "
How often do we see BTL threads like this here? Several a week? There's even a very recent one from someone who invested in one single company shares which went down after Brexit and took that asa lesson that all shares crashed after Brexit despite the documented fact that overall they went up. :mad:
So, anyways the person decides / is persuaded to invest in "property" since it's "safe" not understanding the difference between investing in property and a property management company.
And Bob's your uncle

npd_investor

Hi marinesparks,

Sorry to hear about your situation. Perhaps it helps if I say you are not the only one and I am also one of the fools who invested 65K in a hotel room back in 2016 (just after the stamp duty rules by Mr. Osborne were introduced). I did receive my 10% payments in 2017, 2018 and 2019 just before the whole situation kicked off.
I am trying to understand the value of the leases on the 2 student/hotel rooms that you have. Presumably you have received paperwork from the Land Registry that these are yours (like I have received mine for my hotel room). I did play through an insolvency scenario with both the selling agent and the sollicitor back at the time before I placed my investment. The answer that I received was the following: In case NPD goes into administration you have 2 options:
1. Club together with the other investors and manage the hotel yourself or have the hotel managed on behalf of the investors.
2. Sell the unit(s) on the open market

I assume you have the same options for your rooms or am I overseeing something here ?

AnotherJoe

npd_investor wrote: »

Hi marinesparks,

Sorry to hear about your situation. Perhaps it helps if I say you are not the only one and I am also one of the fools who invested 65K in a hotel room back in 2016 (just after the stamp duty rules by Mr. Osborne were introduced). I did receive my 10% payments in 2017, 2018 and 2019 just before the whole situation kicked off.
I am trying to understand the value of the leases on the 2 student/hotel rooms that you have. Presumably you have received paperwork from the Land Registry that these are yours (like I have received mine for my hotel room). I did play through an insolvency scenario with both the selling agent and the sollicitor back at the time before I placed my investment. The answer that I received was the following: In case NPD goes into administration you have 2 options:
1. Club together with the other investors and manage the hotel yourself or have the hotel managed on behalf of the investors.
2. Sell the unit(s) on the open market

I assume you have the same options for your rooms or am I overseeing something here ?

Without wishing to rain on your parade are these real options at all?
1 assumes that the hotel can be managed and bring in a profit otherwise you'll just be throwing good money after bad and it will certainly (surely?) require more upfront investment and if not everyone with room(s) was agreeable to that how woudl that work for those that are willing? The legalities would be a nightmare.

2 who would buy these? probably the only realistic scenario is someone who would want to buy the whole hotel and run it but you'll be talking a massive loss. Probably your most realistic option. If they offered you 20% of what you paid at least you'd have got half out.



At least you got 30% of your money back. Maybe if they paid you <oops this next bit got snipped> 20% what you paid you'd end up with half which isnt a bad resultcomapred to many of these schemes.

npd_investor

AnotherJoe wrote: »

Without wishing to rain on your parade are these real options at all?
1 assumes that the hotel can be managed and bring in a profit otherwise you'll just be throwing good money after bad and it will certainly (surely?) require more upfront investment and if not everyone with room(s) was agreeable to that how woudl that work for those that are willing? The legalities would be a nightmare.

2 who would buy these? probably the only realistic scenario is someone who would want to buy the whole hotel and run it but you'll be talking a massive loss. Probably your most realistic option. If they offered you 20% of what you paid at least you'd have got half out.



At least you got 30% of your money back. Maybe if they paid you

1. I visited the hotel that I invested in (prior to investing) and every year following my investment and keeping an eye on hotel review websites. Also had a meeting with the hotel manager each time I visited and had a look at the financials. They are averaging 75-80% occupancy rates throughout the year and generate additional revenue from day trips, etc. The average room price is £80.-/night which generates annual revenue of £20K+ per room. So if the hotel can be managed at 60-70% of the revenue there is more than enough cash left to continue paying investors their 10%. Obviously things need to be worked out between the investors but think it could be a viable option.

2. Would indeed require a party buying the entire hotel. As per the D&P report the sale of the hotel may well result in a loss depending on the timescale within which they are looking to sell.

Malthusian

npd_investor wrote: »

1. I visited the hotel that I invested in (prior to investing) and every year following my investment and keeping an eye on hotel review websites. Also had a meeting with the hotel manager each time I visited and had a look at the financials. They are averaging 75-80% occupancy rates throughout the year and generate additional revenue from day trips, etc. The average room price is £80.-/night which generates annual revenue of £20K+ per room. So if the hotel can be managed at 60-70% of the revenue there is more than enough cash left to continue paying investors their 10%.

Is it realistic to expect a 30-40% profit margin for running a hotel after all costs and overheads? Where has that percentage come from?

If the hotel was actually running at a 30-40% profit margin before interest and tax you would keep it for yourself, not sell bits of it to random people along with unsustainable liabilities and forfeit your profitable hotel when the scheme collapses. If you wanted to cash in it would make more sense to just sell the hotel. If you wanted to borrow money you could do so at commercial rates if you were making that much profit.

Who is going to own the freehold once the administration plays out and how much will they charge investors out of that profit margin?

*edit* If these figures come from the same people who were running this scheme you can safely disregard them. You already know their figures don't bear any resemblance to reality. If they did the scheme wouldn't have collapsed.

npd_investor

Malthusian wrote: »

Is it realistic to expect a 30-40% profit margin for running a hotel after all costs and overheads? Where has that percentage come from?

If the hotel was actually running at a 30-40% profit margin before interest and tax you would keep it for yourself, not sell bits of it to random people along with unsustainable liabilities and forfeit your profitable hotel when the scheme collapses. If you wanted to cash in it would make more sense to just sell the hotel. If you wanted to borrow money you could do so at commercial rates if you were making that much profit.

Who is going to own the freehold once the administration plays out and how much will they charge investors out of that profit margin?

*edit* If these figures come from the same people who were running this scheme you can safely disregard them. You already know their figures don't bear any resemblance to reality. If they did the scheme wouldn't have collapsed.

A GOP margin of 30-40% is realistic for the type of operational hotel we are talking about here: Average rate three star hotel in a very favourable location. Main expenses are payroll, upkeep and consumables. GOP margins were not supplied by NPD but are industry standards.

I invested in a similar scheme with Iberostar back in 2001 which was 4-5 star and they managed 30% GOP despite GOP generally going down for more luxurious hotels.

AnotherJoe

So how come on those margins that they couldn't easily pay the investors?