New flats, guaranteed returns, no running costs: too good to be true?

jimjames

Albermarle said:

There seems to be a spate of similar offers recently. I saw one for 10% on student accommodation.
UK Student Accommodation Investment - 10% Net Return (ayanaproperties.com)
Seemed equally too good to be true.

Maybe because mini bonds have been banned by FCA the scammers have moved on to the next unregulated offers

Momanns

If it sounds too good to be true...

No such thing as "guaranteed income". Absolutely stinks. Sounds like a new variation of an investment fraud. In a past life, 9 out of 10 victims of such a fraud would usually have an inclination but ignore their gut feeling. Don't be one of them.

cwep2

I think this is probably scammy or at least overpromising returns, and the guarantees will be as useful as a chocolate teapot.

BUT if you look at the share CSH - Civitas Social Housing - seems to have been doing something similar in terms of owning a bunch of properties, renting them to DWP tenants, getting guaranteed rent. This was paying a 7.1p dividend and for most of the last 6 months the share price was between 52p-64p so the yield was >10% and 12-13% at times. Just over a week ago this company received a bid of 80p per share which is likely to go through (hence the jump in price on 9th May). This company was slightly leveraged, in that it borrowed some cash, but obviously all the running costs were taken out before profits calculated and dividends paid - the profits were more than the dividends.

So what I would say is that returns of 8-10% are not out of the realms of possibility.

Disclosure - I was a (tiny) shareholder of CSH in my ISA which is why I know this, but have no connection other than that.

badger09

I would be asking where they got my email address. 

jimjames

cwep2 said:

So what I would say is that returns of 8-10% are not out of the realms of possibility.

The difference is that any company guaranteeing 8-10% to an investor for 25 years is a scam

Stubod

..I have joined, I hadn't got the money so I asked them to loan it to me and I will pay them back from the returns....

DrSyn

1. Where did they get your name and email address?

2. If the returns are so good, there should be a Q trying hard to get a bit of the action! So why do they need to send emails to get investors?  

3. The way I treat "door knockers" is to say "no thank you" and close the door in their face. The way to treat this type of email is, "If it looks to good to be true, ignore it".

Frog_Prince

Thank you for your comments.

Here are further details from the investment company's website: https://knightknox.com/property/chapel-street/

Johnjdc

Frog_Prince said:

Thank you for your comments.

Here are further details from the investment company's website: https://knightknox.com/property/chapel-street/

So they want £153,000 for a studio flat, in an area where the going rate for a one bed flat is less than half that? https://www.rightmove.co.uk/properties/124280990#/?channel=RES_BUY

Hell, for less than the price of 10 of their flats, you could buy 12 2-bed flats and a house, round the corner: https://www.rightmove.co.uk/properties/131835668#/?channel=RES_BUY

If they genuinely have an ironclad contract from a housing association paying £250 a week per studio flat, then that explains the elevated purchase price, but why do they?

The maximum housing benefit allowance for Bradford for a 1-bed flat is £349 a month, not £250 a week.

Mr.Generous

Johnjdc said:

Frog_Prince said:

Thank you for your comments.

Here are further details from the investment company's website: https://knightknox.com/property/chapel-street/

So they want £153,000 for a studio flat, in an area where the going rate for a one bed flat is less than half that? https://www.rightmove.co.uk/properties/124280990#/?channel=RES_BUY

Hell, for less than the price of 10 of their flats, you could buy 12 2-bed flats and a house, round the corner: https://www.rightmove.co.uk/properties/131835668#/?channel=RES_BUY

If they genuinely have an ironclad contract from a housing association paying £250 a week per studio flat, then that explains the elevated purchase price, but why do they?

The maximum housing benefit allowance for Bradford for a 1-bed flat is £349 a month, not £250 a week.

Ah so it must be true then. The tenants will all hapily top up the housing benefit because they know the investor was guaranteed a grand a month.