investing in property refurbishment companies...

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xyz111
xyz111 Posts: 187 Forumite
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in Savings & investments
Hi

I am thinking about investing in properties refurbishment company. What are the things to generally look
out for.

what are the things must look out for in order to be on the safer side.

Many thanks.
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  • Reed_Richards
    Reed_Richards Posts: 4,169 Forumite
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    This would be a very high-risk investment and success or failure will mainly depend on how well-managed the company is. So look at the track-record of the management team and how much each of them personally stands to lose should the business fail.
    Reed
  • le_loup
    le_loup Posts: 4,047 Forumite
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    If you need to ask here, you shouldn't be doing it.
  • dealer_wins
    dealer_wins Posts: 7,334 Forumite
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    I personally would avoid, especially if it was anything to do with family or friends.

    If it was a successful company making good money they wouldn't want "investors".

    To me it sounds like the company is struggling, or worse could be a possible scam.

    Just my 2 cents.
  • Malthusian
    Malthusian Posts: 10,944 Forumite
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    Which company is it?

    If you're not willing to name the company in question, that's your first indicator that it's a scam. None of us are reluctant to say that we invest with Vanguard or BlackRock or Charles Stanley or Hargreaves Lansdown or wherever.
  • TomPucci85
    TomPucci85 Posts: 56 Forumite
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    Property refurbishment to do what with after?

    Are they holding onto the property to let out, maybe under a HMO basis. Or are they buying properties, doing them up, and flipping them?

    I'd be a bit skeptical personally, had my own house sale fall through earlier in the year and the market has just dried up since. If they're just flipping them, i'd be concerned about the ability to liquidate your investment fast enough
  • dunstonh
    dunstonh Posts: 116,383 Forumite
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    what are the things must look out for in order to be on the safer side.

    Unregulated investments have virtually no consumer protection. Certainly nothing like the FSCS. Plus, they will not be regulated. So, forget having standards you see with regulated investments. This in turn significantly increases risks.

    In reality, these types of schemes are commercial punts. And many of them go to the wall and lose 100% of your money.

    The fact you are considering high risk unregulated, unusual options suggests you have a lot of excess money that you can afford to lose. The general position is that unregulated investments are best suited to those with over £500k of investable assets (i.e. cash) and even then, a maximum of 5% would be used.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • djpix99
    djpix99 Posts: 53 Forumite
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    An example I am aware of is: https://fmp-investments.com/

    I follow them on the Property Hub Forum and also on Instagram, they borrow money from investors to purchase properties for cash to flip and pay a 10% return on funds lent for each property. At the moment they seem to basically be using investors funds in a similar way to bridging finance in order to build up the business. I suspect further down the line when the business has built up its own surplus of funds they may stop using investors funds.
  • Malthusian
    Malthusian Posts: 10,944 Forumite
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    Their website is a blatant financial promotion. They are not authorised by the FCA. It is illegal for companies to provide financial promotions in the UK if they are not authorised. It falsely claims the investment is "guaranteed" when it is anything but.

    What should you look out for? For starters, companies which don't commit criminal offences.

    Another thing to look out for is that this company was formed 2 years ago and according to its last accounts had minus £10,000 in net assets.

    10% per year, unregulated company founded two years ago, which has already broken the law once. What can possibly go wrong?
  • xyz111
    xyz111 Posts: 187 Forumite
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    its quite appealing...and company is family manged...i am not particularly thinking in this company
    but generally thinking about investing in this market as returns good... i am saving for my kids but think that investing is a better and more beneficial idea...
  • xyz111
    xyz111 Posts: 187 Forumite
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    http://www.elitepropertysolutions.co.uk/investment/
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