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  • FIRST POST
    • xyz111
    • By xyz111 8th Nov 18, 8:48 AM
    • 79Posts
    • 2Thanks
    xyz111
    investing in property refurbishment companies...
    • #1
    • 8th Nov 18, 8:48 AM
    investing in property refurbishment companies... 8th Nov 18 at 8:48 AM
    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.
Page 1
    • Reed_Richards
    • By Reed_Richards 8th Nov 18, 8:58 AM
    • 190 Posts
    • 94 Thanks
    Reed_Richards
    • #2
    • 8th Nov 18, 8:58 AM
    • #2
    • 8th Nov 18, 8:58 AM
    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
    • By le loup 8th Nov 18, 8:58 AM
    • 3,877 Posts
    • 3,897 Thanks
    le loup
    • #3
    • 8th Nov 18, 8:58 AM
    • #3
    • 8th Nov 18, 8:58 AM
    If you need to ask here, you shouldn't be doing it.
    • dealer wins
    • By dealer wins 8th Nov 18, 9:21 AM
    • 6,086 Posts
    • 11,790 Thanks
    dealer wins
    • #4
    • 8th Nov 18, 9:21 AM
    • #4
    • 8th Nov 18, 9:21 AM
    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.
    Choose life
    • Malthusian
    • By Malthusian 8th Nov 18, 10:10 AM
    • 4,907 Posts
    • 7,915 Thanks
    Malthusian
    • #5
    • 8th Nov 18, 10:10 AM
    • #5
    • 8th Nov 18, 10:10 AM
    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
    • By TomPucci85 8th Nov 18, 10:36 AM
    • 26 Posts
    • 9 Thanks
    TomPucci85
    • #6
    • 8th Nov 18, 10:36 AM
    • #6
    • 8th Nov 18, 10:36 AM
    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
    • By dunstonh 8th Nov 18, 11:56 AM
    • 95,824 Posts
    • 63,534 Thanks
    dunstonh
    • #7
    • 8th Nov 18, 11:56 AM
    • #7
    • 8th Nov 18, 11:56 AM
    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). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • djpix99
    • By djpix99 8th Nov 18, 12:19 PM
    • 25 Posts
    • 7 Thanks
    djpix99
    • #8
    • 8th Nov 18, 12:19 PM
    • #8
    • 8th Nov 18, 12:19 PM
    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
    • By Malthusian 8th Nov 18, 12:52 PM
    • 4,907 Posts
    • 7,915 Thanks
    Malthusian
    • #9
    • 8th Nov 18, 12:52 PM
    • #9
    • 8th Nov 18, 12:52 PM
    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
    • By xyz111 8th Nov 18, 5:35 PM
    • 79 Posts
    • 2 Thanks
    xyz111
    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
    • By xyz111 8th Nov 18, 5:38 PM
    • 79 Posts
    • 2 Thanks
    xyz111
    http://www.elitepropertysolutions.co.uk/investment/
    • dealer wins
    • By dealer wins 8th Nov 18, 7:07 PM
    • 6,086 Posts
    • 11,790 Thanks
    dealer wins
    Its an extremely high risk investment. If you like having no FCA protection, and are happy with the very real risk of losing every penny, then go for it.
    Choose life
    • doe808
    • By doe808 8th Nov 18, 8:01 PM
    • 256 Posts
    • 250 Thanks
    doe808
    10 years experience in this sector (on the legal side of things for both banks and developers). Would not go near an opportunity of this nature with my own money.
    Total - £340.00

    wins : £7.50 Virgin Vouchers, Nikon Coolpixs S550 x 2, I-Tunes Vouchers, £5 Esprit Voucher, Big Snap 2 (x2), Alaska Seafood book
    • verybigchris
    • By verybigchris 8th Nov 18, 8:39 PM
    • 439 Posts
    • 608 Thanks
    verybigchris

    Their website says: "We use a lump sum to purchase properties, and then depending on the type of option you choose we’ll either buy properties to let or re-sell for a profit. The properties we buy range from family homes to converted commercial buildings that are then rented out to multiple tenants. “Flipping” is another strategy you may have heard of-this involves buying properties at a low value, refurbishing them and selling them at a far higher price." (my emphasis)


    Their published accounts on Companies House show no evidence of any property sales. There's £214k of new freehold property, with zero disposals. There's also £294k of directors' loans and £93k of other creditors, giving them negative net assets of £122k.


    Not one for me. Can I ask how you came across them?
    • dividendhero
    • By dividendhero 8th Nov 18, 8:57 PM
    • 283 Posts
    • 296 Thanks
    dividendhero
    When there's a myriad of legitimate and regulated investment products and despite all the warnings - why on earth do people keep falling for these ostrich farms/shipping container/fine wine etc scams?
    • shinytop
    • By shinytop 8th Nov 18, 9:18 PM
    • 69 Posts
    • 15 Thanks
    shinytop
    Because they claim 10% return and the myriad of legitimate ones don't?
    • Malthusian
    • By Malthusian 9th Nov 18, 9:37 AM
    • 4,907 Posts
    • 7,915 Thanks
    Malthusian
    Someone showed me a Prudential pension statement recently. The investment was in 1988 and was in a With Profits fund with a "guaranteed" 4% growth rate. Prudential actually did much better than that, and due to a terminal bonus, the pension is currently sitting on an 11.2% per year compounded return over 20 years.

    This was for a regulated, diversified, relatively medium-low risk investment where the only risk of permanent loss was a permanent crash in the markets, catastrophically poor decisions by Prudential fund managers and Prudential itself doing an Equitable Life (defaulting on its guarantee).

    Too good to be true?

    Obviously we all know that you can't say that any mainstream regulated investment or any fund in existence will deliver 10% annual returns in the future, starting now. The Prudential fund is in a minority of funds which has done exceptionally well over a very long period, and its best returns will have come from the late 80s and 90s, from economic conditions which no longer apply. 10% is not a realistic rate of return for anyone to count on in their financial planning.

    But the great irony is that regulated companies which actually can deliver 10% annual returns (can in the sense of "might possibly", not "are able to") can never ever tell you that they can, because it would be misleading. Whereas companies which claim that they can deliver 10% annual returns are far more likely to lose all your money forever.

    Companies which can in theory deliver 10% annual returns are subject to a strict compliance and regulatory regime which prevents them from advertising what they can do without making it clear to customers that they could also in theory lose all their money, even though they almost certainly won't unless the customer does something extremely stupid. Companies which cannot deliver 10% annual returns and will almost certainly lose all your money can run around saying whatever the f--- they like with zero consequences.
    • greenglide
    • By greenglide 9th Nov 18, 9:39 AM
    • 3,194 Posts
    • 2,080 Thanks
    greenglide
    I had a look at their web site and found this classic
    . We are contempt that we are benefiting society and want you to feel the same way.
    ��
    • Malthusian
    • By Malthusian 9th Nov 18, 9:41 AM
    • 4,907 Posts
    • 7,915 Thanks
    Malthusian
    No results on the FCA Register for Elite Property Solutions Cumbria Ltd. If they induced you to invest with them (without first establishing that you were a high net worth or sophisticated investor) they committed a criminal offence. Which law do you think they'll break next, and are you confident you'll manage to get your money out before they do?
    • MEM62
    • By MEM62 9th Nov 18, 10:06 AM
    • 1,809 Posts
    • 1,421 Thanks
    MEM62
    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...
    Originally posted by xyz111
    I might view this as being closer to gambling than investing.
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