Property investment scams?
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I read a little bit of the carpark scam thread. Is it safe to say that all deals along those lines will be scams, or could there be legitimate offerings?
select-portfolio.co.uk Have a range of property investments, and some of them have a slightly different structure, where it's developer financing for something that hasn't been built yet, and they give a clear break down of what you pay and what you get back. Over 200% ROI.
I sent them an email with a bunch of questions along the lines of "is it guaranteed", "what is the guarantee backed by", but never got a reply.
I won't invest on that basis alone, but is there something real out there that I'm missing out on?
select-portfolio.co.uk Have a range of property investments, and some of them have a slightly different structure, where it's developer financing for something that hasn't been built yet, and they give a clear break down of what you pay and what you get back. Over 200% ROI.
I sent them an email with a bunch of questions along the lines of "is it guaranteed", "what is the guarantee backed by", but never got a reply.
I won't invest on that basis alone, but is there something real out there that I'm missing out on?
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Comments
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Well their terms and conditions
https://www.select-portfolio.co.uk/terms-conditions
Is plastered with the name select-resorts which does not inspire confidence
No fca registration , not licenced for investment or to hold client money on deposit.
Does not look goodEx forum ambassador
Long term forum member0 -
What could possibly go wrong?
That hotel in Yorkshire has been on here very recently but I don't have time or inclination to look for the link
I wonder where OP hear of this company:cool:0 -
I read a little bit of the carpark scam thread. Is it safe to say that all deals along those lines will be scams, or could there be legitimate offerings?
It's safe to treat them as scams because the few that aren't scams will be so risky you have a very high chance of losing your money, and I guess you don't care if there's a 100% chance of losing all your money through a scams or 95% through a highly risky investment.0 -
I won't invest on that basis alone, but is there something real out there that I'm missing out on?
Unlikley. I worked in property investment for over 10 years (legal side advising banks, mainly). The good investment grade stuff rarely comes near the retail maket, due to all the extra costs involved in doing so.
Stick to listed funds.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 book0 -
200% return? Yeah sounds totally legit. They obviously need to work at raising funds because of the low yield.
You could almost say it sounds too good to be true.0 -
It depends on the time scale too. 11.6% annual return compounding for 10 years will yield 200% returns, this sounds about right for a high risk investment. However for 5 years that will be an unrealistic annualised return of 24.6%.Mr.Generous wrote: »200% return? Yeah sounds totally legit. They obviously need to work at raising funds because of the low yield.
You could almost say it sounds too good to be true.0 -
It depends on the time scale too. 11.6% annual return compounding for 10 years will yield 200% returns, this sounds about right for a high risk investment. However for 5 years that will be an unrealistic annualised return of 24.6%.
Thanks. The specific one I looked at has 2 options and these schedules:
Full Purchase:
Purchase price: £205,000
Client cash input (with 3 years by deduction): £143,500
Reservation fee: £1000
Balance of cash input: £143,000
Assured tenancy period: 10 years
Income: 10%
No. of years by deduction: 3
No. of years on full purchase price: 7
Year | Rental Income (10%)
1 £20,500 by deduction
2 £20,500 by deduction
3 £20,500 by deduction
4 £20,500
5 £20,500
6 £20,500
7 £20,500
8 £20,500
9 £20,500
10 £20,500
Total £205,000
Buy back at 125%: £256,250
Total Purchaser Returns: £205,000
Less Cash Input (including three years deduction): £205,000
Cash received over and above purchase price: £256,250
ROI: 125%
Developer Finance:
Similar sort of idea as above, but you put in £82,000 (for the same property), and a proportion of the yearly rent goes in to covering the rest of the initial purchase price. That gives an ROI of 268% after 10 years.
So, are either of these deals sane? Are they even good deals considering the 10 years? If they are good deals, why would any developer do deals like this? If the above doesn't strictly contain any lies, is their claimed valuation of the property just too high, and that's the scam?0 -
I haven't looked at these at all, but I would point out the assured tenancy and buy back both depend on the company continuing to exist for 10 years. If they don't you just end up with a car park space (is it freehold or leasehold by the way?) which is up to you to try to rent or sell, at which point you will probably discover it has a wildly exaggerated valuation.0
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As soon as I saw 200& ROI, all that pinged in my mind was SCAM!Save £12k in 2019 #154 - £14,826.60/£12kSave £12k in 2020 #128 - £4,155.62/£10k0
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Thanks. The specific one I looked at has 2 options and these schedules:
Full Purchase:
Purchase price: £205,000
Client cash input (with 3 years by deduction): £143,500
Reservation fee: £1000
Balance of cash input: £143,000
Assured tenancy period: 10 years
Income: 10%
No. of years by deduction: 3
No. of years on full purchase price: 7
Year | Rental Income (10%)
1 £20,500 by deduction
2 £20,500 by deduction
3 £20,500 by deduction
4 £20,500
5 £20,500
6 £20,500
7 £20,500
8 £20,500
9 £20,500
10 £20,500
Total £205,000
Buy back at 125%: £256,250
Total Purchaser Returns: £205,000
Less Cash Input (including three years deduction): £205,000
Cash received over and above purchase price: £256,250
ROI: 125%
Developer Finance:
Similar sort of idea as above, but you put in £82,000 (for the same property), and a proportion of the yearly rent goes in to covering the rest of the initial purchase price. That gives an ROI of 268% after 10 years.
So, are either of these deals sane? Are they even good deals considering the 10 years? If they are good deals, why would any developer do deals like this? If the above doesn't strictly contain any lies, is their claimed valuation of the property just too high, and that's the scam?
If that was what was reasonably expected, they would have no issue obtaining standard finance, at cheaper cost (with less administrative hassle). Ask yourself why wouldn'nt they do this?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 book0
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