NPD/MBI Investmen

eskbanker

sendu wrote: »

What is the standard due diligence that potentially OP and my father did not carry out? What should they have done instead?

Unlikely to be what Malthusian had in mind but people considering investing in wacky off-piste schemes could do worse than posting on here saying what they're thinking of and seeking feedback, which they'll usually receive promptly and forcefully (bargepoles often mentioned in first replies) - it's a remarkably effective way of gauging the likely outcome....

Linton

sendu wrote: »

What is the standard due diligence that potentially OP and my father did not carry out? What should they have done instead?

There are easy things to do - whether they are standard I dont know. Look up the company on Google and go through the Companies House data. This will tell you the date when the company was set up, who the directors are and any other companies they are linked to, the latest summary accounts, any mortgages outstanding on their propery and other useful data. Then apply some common sense.



If the company claims many years experience in its field but was only set up 3 months ago, has virtually no assets, a prestigious sounding address that turns out to be a mail-box service, the directors who live in a terraced house in Tilbury with a past that includes directorships of a series of companies which have gone bust and their guarantees are based on charges against a run down rambling Victorian mansion in the wilds of Lancashire you mave have some suspicions. In my researches on possible lucrative investment opportunities I have come across all of the above though not in one company!


Another simple check is to google some fine sounding phrases from their website. You could find that they have been lifted from elsewhere.



The best advice is simply that one should not invest in any company that offers a guaranteed high return. No-one can honestly provide that. Just use mainstream funds and bank accounts.

edgex

sendu wrote: »

What is the standard due diligence that potentially OP and my father did not carry out? What should they have done instead?

Engage some brain cells & think

If the 'investment' has had to come to you, think WHY?

Can you independently think of any other similar businesses offering the same investment? (Have you heard of any hotel chains 'selling' rooms as investments?)

masonic

edgex wrote: »

Can you independently think of any other similar businesses offering the same investment? (Have you heard of any hotel chains 'selling' rooms as investments?)

Indeed, it would be much easier and incur a lot less admin and legal costs for the seller to simply sell the hotel all in one go, and if it was such a great investment, there would be no shortage of would-be buyers.

lianghsin328

masonic wrote: »

Indeed, it would be much easier and incur a lot less admin and legal costs for the seller to simply sell the hotel all in one go, and if it was such a great investment, there would be no shortage of would-be buyers.

This is so true, good investments do not need any marketing strategy to attract funds.

eskbanker

lianghsin328 wrote: »

good investments do not need any marketing strategy to attract funds

I disagree.

Plenty of good investments deploy marketing to attract funds, whether that's in the form of advertising or offering promotions directly or via brokers/partners.

However, reputable investments don't target suckers via high-pressure cold-calling or flimsy shell companies in dodgy jurisdictions, etc....

What led you to invest with this crowd in the first place?

kangoora

Looked at logically, any bank or investment business would jump at the chance of getting 10% 'guaranteed' return on investment when even personal loans are running at substantially less than this. If they are 'guaranteeing' 10% return to investors then presumably they are forecasting making 15-20% profit overall (they want their own profit after all).

Why would they go to the hassle of getting 100's of small buyers with all the additional cost of 100's of contracts to be signed, administration costs etc when they could go to one investment house or bank and get the lot in one lump sum?

For reference, Apple make 21% net profit on their extortionately priced goods. The Hilton and Marriott group make somewhere between 3 - 10% net profit per quarter (easily googled) so this investment would be costing the holding company money by paying 10% to investors if compared to Hilton/Marriott. Another quick google showed averages acrss the industry between 6 and 14%.

Your father is either:
1. Incredibly lucky to have found the improbably rare hotel room investment that has worked (making top whack at 14% and the firm are happy with a net profit of 4%); OR
2. He got in really, really early in a scam that hasn't completed yet as they are still finding mugs to keep the ball rolling (classic ponzi scheme).

It would be interesting to see if he can sell his investment, if a scam and it's still rolling smoothly he may be able to get out but I doubt he'll get full value.

Worst case scenario, from your information on his 'returns', is he got back circa £200k so far (8 x £25k averaging) but I hope he isn't planning on also getting back the £260k he originally invested. Maybe he'll be lucky but i doubt this.

sendu

kangoora wrote: »

1. Incredibly lucky to have found the improbably rare hotel room investment that has worked (making top whack at 14% and the firm are happy with a net profit of 4%); OR
2. He got in really, really early in a scam that hasn't completed yet as they are still finding mugs to keep the ball rolling (classic ponzi scheme).

I can't remember the full details, if I ever knew them, but investment was only pre-construction and probably for only some subset of the total rooms in the hotel.

Worst case scenario, from your information on his 'returns', is he got back circa £200k so far (8 x £25k averaging) but I hope he isn't planning on also getting back the £260k he originally invested. Maybe he'll be lucky but i doubt this.

He's actually put this hotel investment in to some kind of pension fund/trust, which he is passing on to his children (including me) at some point soon. So I think he as no intention to sell, and won't be directly affected if the returns drop off. I might end up getting less/nothing of course, but I didn't ask for this, nor do I need it.

My father has fallen for phishing scams by email before, so if this does turn out be legit, I guess he really did get very very lucky.

lianghsin328

eskbanker wrote: »

I disagree.

Plenty of good investments deploy marketing to attract funds, whether that's in the form of advertising or offering promotions directly or via brokers/partners.

However, reputable investments don't target suckers via high-pressure cold-calling or flimsy shell companies in dodgy jurisdictions, etc....

You are right, I should rephrase my words. All products and businesses need good marketing strategies in order to be successful but what they don't need is the channel to reach small individual investors or fancy words to trick people into their schemes.

eskbanker wrote: »

What led you to invest with this crowd in the first place?

I was looking for a safe place to park my money while offering a reasonably good return every year then I came across an agent company known as Select Resorts. I flew all the way from Taiwan to the UK, met those guys in Poole Dorset, naively thinking that private investments are safe in this country. They showed me quite a number of brochures related to hotel room and care home investments and I was then very satisfied with the yields as well as the professionalism they presented so I put down 1000 pound deposit on the very same day. The first interest payment commences at the end of the second year, got the second payment at the end of the third year, and this year, the NPD went bust in July. After posting my experience on this forum and reading other people's comments, I then realize the purpose of their marketing materials is to get us, the investors, to put in more money. I was fortunate that I only had so much to invest so even if I had to lose all my capitals, my life won't be affected so much but it is still a painful loss.

Malthusian

sendu wrote: »

I can't remember the full details, if I ever knew them, but investment was only pre-construction and probably for only some subset of the total rooms in the hotel.

Which means the yield required to sustain his income payments is even higher than the figures Kangoora gave, as the hotel will only have been open and making money for a fraction of the time he has been invested.

He's actually put this hotel investment in to some kind of pension fund/trust, which he is passing on to his children (including me) at some point soon.

If he invested via an FCA-regulated SIPP or SSAS provider there may be an avenue for compensation if / when it collapses. I won't go into further detail however, as the details of what he actually has are third-hand and sketchy.

Unless the c. £25k payments are sitting in the pension's bank account or in his own bank account (i.e. a bank account totally independent of the hotel room scheme) they're "numbers on a screen", i.e. they aren't real.