Live the dream! But first take heed...Caveat Emptor...
I have seen Raj, the main speaker at the event profiled in this article before, I previously attended an Inside Track seminar on property investing and paid a tidy sum for the privilege to do so but did not proceed to invest with them. The format was very similar to that outlined in this new seminar below: sell the dream, bring in some case studies i.e. successful investors to seduce the audience, throw in some outline technical aspects to pad out the pitch and then entice with a one-day only offer. I have previously been on a timeshare freebie that followed a similar format and again did not buy but boy are these guys good!
There is a legal principle that I learned at university called 'caveat emptor' which is Latin or 'let the buyer beware' in English and it has stuck with me ever since. It basically means that in many cases in law, it is up to the buyer to take the necessary checks and precautions before parting with money in exchange for gifts and services. Only today I saw a post on a property forum asking about a property sourcing company and along with this article I realised that the Professionals are not just an 80s crime drama. Now, I am not saying that these guys are bogus or phoney, that the tax advice is flawed (although you would need to have a tidy sum to make the fees worth paying) or even that the properties on offer were not real BUT it is down to each and every one of us to do the required due diligence on any opportunity before diving in and most certainly anyone that is being asked to part with £10k on the spot at a seminar should see a warning light flashing loud and clear.
Doing your due diligence means as a minimum:
Googling the company and people involved in the seminar - look beyond the first page
Ask about and / or search the names on the property forums such as Property tribes, Property 118 and The Property Hub to name just a few
Meet the company, preferably at their company premises - try and meet or talk with the owners / directors if possible
Look up the company at Companies House - how long trading, profitable, director's other interests - many other companies, if so many closed or liquidated, etc.? A specialist company called Duedil can assist in this respect
Are they registered with an industry representation body such as The Property Ombudsman (TPO)?
Getting hold of their terms and conditions and actually reading them - what are you committing to?
Checking if there is a 'cooling off period' for any investment commitment or a promise of money back if the deal falls through for any reason - if not then don't part with cash on the day - deals of the century tend to come around like London buses I have found!
Ask to speak to existing clients and get their honest view of the company
Try and see some of their properties and ask to see before and after photos if refurbishment is involved, what sort of warranty or guarantee is on offer for works undertaken?
Repeat these steps for any separate company or other legal entity you are asked to deal with
Listen to this property podcast warning about property sharks: http://thepropertypodcast.com/2014/01/tpp045-how-to-spot-a-property-shark/
Always remember that when you buy a new car you tend to do some research before parting with your cash - investing is no different aside from the fact that in many cases you are not dealing with BMW and a High Street motor dealership – so do your research!
There is no such thing as a free lunch
If something looks to god to be true - look harder!
Anyway, sorry if this message sounded at all patronising; it's just that there are many people that do get taken in by slick sales presentations and in many cases they may end up with a good property investment but in others this did not happen...I have had some pretty close shaves myself I can tell you…oh and what ever happened to that company I mentioned at the top of this rant, err I mean commentary? Yep, they went bust with massive debts and many of the ‘bargain properties’ they promoted were in negative equity at the time – it could have all been down to timing and the general property crash – but equally it could have been for other reasons...who knows.
Better to be cautious, embarrassed even and potentially miss out on that gift horse than find out later on it was a shark in horse's clothing waiting to bite you… to mix my metaphors 😉
Never forget...caveat emptor!
Source & credits: This Is Money