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How To Avoid an Investment Property Scam

admin — Wed, 24 Mar 2010 09:49:46 +0000

To many people, taking the plunge, and investing in property for their future is a major leap of faith. Imagine how they must feel, if their investment turns out to be an investment property Scam?

Is there a way out of any Investment Property Scam?

The first thing to realise is that if you do feel you have been conned, you are probably not the only one. It may feel like it, and you may feel alone, stupid, cheated, and angry or embarrassed – some of the common emotions felt at this time.

But, these are the emotions that developers with crooked minds will encourage you to think. They hope that you will feel ‘suckered’, and just don’t want to tell anybody. In fact, with a clever scam, there may seem to be nothing to tell anyway, apart from your gut instinct, until you start digging.

But inertia is just what these criminals (and they usually are criminals) want you to think. In these circumstances, you must not hold it all into yourself. You must try and find if other people have been duped into a similar situation. You never know, you may be one of ten, twenty or hundreds of similar souls, and if you can find, and become identified with such groups you will stand a far greater chance of getting retribution, believe me.

I got caught up in such an investment property scam about 18 months ago (I know – gasp – shock – horror – and I sell investment properties!). For some months, I thought I was going crazy, I could not understand why I could not get tenants in at anywhere near the prices I was expecting, or even get tenants at all. This was the first revelation, as I had been promised that the properties would have been fully tenanted on completion. Well, at least, that’s what the brochures said, as well as the sales manager at the presentation I attended. And I had bought a number of these ‘beauties’ each supposedly fully tenanted and making me around £500 each per month rental surplus.

Then I started to investigate the situation more thoroughly, and I soon identified the problem. It’s a down and out highly complex investment property Scam!

So how did I, an experienced property investor, and a reseller of investment properties – get involved in an investment property scam?

I’ll tell you how – perhaps Criminal Intent?

What I have done is to chronicle the events that actually took place with my investments, of which I have since found out there were well over 100 similar incidents.

Before I went into this investment, or even recommended them to others, which consisted of a number of refurbished houses converted into HMO’s for students (Houses of Multiple Occupation) I investigated the company thoroughly. (Note the company and location of these houses is not mentioned in this report for legal reasons). I checked out at least 6 of their property conversions, spoke to their rentals people, and spoke with several existing investors. I took my business partner at the time with me to check out my findings. I was also comforted by the fact that these people were spending (and still are spending) a lot of money in the big national newspapers (Sunday Times, Telegraph, and so forth), and had produced a whole range of glossy brochures backing up their claims.

Some of their larger off-plan developments were also being featured in a two-page spread in one of the UK’s leading property magazines. Not only that, but they had (and still do have) very large exhibition stands at a number of the leading UK Property Shows.

Everything seemed to stack up, so I bought a number of them, and encouraged my friends, close family, and business colleagues to buy some also. I paid my reservation fees, and just settled down to wait for these to be completed, and to start generating some surplus cash every month.

The first event in the chain of things was that the houses were very late in being completed, so we were in danger of losing the student intake for autumn 2005, but the investment still seemed quite good, and anyway we had all exchanged contracts by then. And, of course, we all thought we had at least an 11% equity holding in each property, plus the usual growth of 4-6 % from last year. Also, when asked if we could inspect them prior to completion, we were told – “Sorry, as you have tenants in them, you have to give 48 hours or more notice”. Then when we did try for appointments nobody could find the keys.

Where were my alarm bells I hear you ask –

Obviously on Silent Mode!

But then the dirt really started to rise to the surface…

These houses were all sold under the premise of ‘All contacts for services under one roof for the investor – Use our Services for Sales, Recommended Solicitors, In-house Brokers, mortgages, Tenancy Management from our Own Company’ – you know, a really good packaged deal for the armchair investor.’

Issue 1 was that the houses were not fully tenanted on completion, and in a lot of cases, the tenants seemed to ‘melt away’ after contracts had been signed. So much for the promises made in the developers’ glossies that tenants would be in place before completion, with cross-guarantees so that there would be virtually no void periods, no issues with rent, as if one tenant failed to pay, the cross guarantees meant that the other tenants would be liable.

Also, in some cases, (not with mine luckily) no renovation work had been carried out at all, and the developers then had the cheek to ask for £3,000 per property to fix those that had not been done. Then, major issues with the building work started to surface. Basements would flood, not due to rain, (although this did happen on a number of occasions where the basements had not been ‘tanked’ correctly), but due to faulty plumbing, But if course we had a 12 month warranty contract – Right? Wrong?

Even after constant phone calls and emails, the management company failed to send us proper records, and they did not keep us informed of maintenance issues, tenants leaving, tenants not paying rent on time – all the sort of standard things one was used to expect from a ‘proper’ management company that charged 10% of the rent as fees.

And the hassle I had moving the management agreements to another company is another story for another day when it can be told.

Ok, so, this just seemed like rogue building work and an outright total lack of proper management by the department handling the tenancies. Not the sort of service to be expected from a firm carrying out so much nationwide marketing, but of course, being of such a high profile firm, you would have thought they would have fixed the issues. Right? Wrong!

So because of all these issues, I had by now started to do some very intensive investigation into this company, and the methods being used to package the sale of these houses.

It then transpired that most of these houses had been bought by the developer some three to four months prior to selling them, for about £90,000 – in the developers words – derelict houses that were totally gutted; 3 bed properties that had basements opened out, and or roof conversions done, so adding as many as 2, 3 or even 4 more bedrooms, and supposedly converted to the highest of standards for HMO purposes, and these were sold to us for around £249,950 up to £325,000 and higher.

Ding Ding Ding – Alarm Bells…
Why were we quite happy to purchase them – because they all came with RICS (Royal Institute of Chartered Surveyors) valuations on the property value and the anticipated rental incomes.

All of which matched the developers claims.

But when we noticed that several investors from other groups were having some of these similar houses repossessed – as they were not getting the rent, and consequently could not afford the mortgage, and the valuations were all coming in at around £80,000 to £100,000 BELOW THE MORTGAGE VALUE!

Our own investigations then uncovered that many of these properties had been valued by the same firm, and for comparison, they had used properties by the same developer on the valuation form.

We have come across instances where the mortgages that were granted they :-

· Were not valid for multiple occupancy homes – so why was a loan granted?

· Would not have been granted had the banks known the properties were already tenanted, and not sold as vacant possession. So why was a mortgage granted?

· Would not have been granted if the valuation rental assessment was not realistic. So loans were granted on incorrect information. If the investor had put the rental figures in, they would have probably been done for mortgage fraud.

· Would not have granted a loan (especially interest only) if the true valuation figure had been known.

· Would not have granted 85% of the assumed value had they known a Gifted Deposit was being paid (along with legal and other fees by the developer). The solicitor was aware, as was the broker, so how come the lender was not informed?

Now, as I like to think of myself as a ‘savvy investor’, knowing that gifted deposits, cash backs etc happen and quite often jump start the property market on the move, I had told my solicitor(s) what the side deal was, the broker told me what the deal was, so no problem right?

Wrong… I then find out that neither the solicitor(s) nor the broker had informed the lender.

Somewhere along the lines, something was wrong here.

The question is – Was it the fault of:-

·The Developer?

·The Solicitor?

·The Broker?

·The Investor?

In a society where regulations covering solicitors, brokers, mortgage loans, and valuers seem quite strict, I must say I think something is awry here, where the hapless individual investor can walk into such an unregulated trap!

If you feel you have been involved in such an investment property scam, and would like to see if there are others in the same boat, please visit my blog where you can voice your opinion, and even add your name to a structured list if you want so we can build up a database of like events that could be easily analysed to spot trends, or passed to ‘Watchdog’ for instance.

Geoff Morris usually writes about investment
properties, not their problems. If you or someone you know has
fallen foul of a scam, take a look at his
Blog where a full copy
of this report is posted.

Professional Content Promotes Your Commercial Property Investor Network

admin — Wed, 17 Mar 2010 09:19:15 +0000

You must work everyday if you want to drive traffic and business everyday to your Commercial Property Investor Network website. Write and submit Commercial property articles,to various article directories that will promote your investment strategy. Article directories use professional content on their web sites, to promote your articles without cost to you. Professional content article marketing, will give you what you put into it. You must write relevant content, and write regularly.

If you are starting a marketing strategy on a shoestring, it may feel like there is just no way at all to get started online while you try to attract investors to your network. This article is written to show you how to get started building a Commercial Property Investment Network on a shoestring, and how to really grow your list of accredited investors.

If you have a budget, you can learn quickly how to attract a list of approved accredited investors, you start advertising, and you are in business, hopefully making money in a short period of time.

You have a budget for advertising and market development or you do not. It does not matter.

You can begin to develop a Commercial Property Investor Network , and lose track of your marketing efforts, once you connect with investors willing to invest in your acquisition. I suggest you reinvest money into paid versions of the services you use to continue marketing to new potential investors. You can easily become disenfranchised with the time you have to spend online, and your growth will become an issue. One important thing about starting at the beginning is that you cannot take any money out of the marketing results at first. Anything that you might generate from your online efforts should be reinvested right back into your marketing.

The following series of steps involve free advertising, free products and tools, and free methods of traffic generation. Although they do not cost any money, they cost time, and you must be willing to spend a considerable amount of time marketing to drive traffic (and potential investors) to your commercial properties offerings.

Once you have a website and an auto responder service set up, you need to drive traffic to your site. This is where you will spend most of your time. My favorite form of free marketing is article writing and submission to my targeted niche.

The first thing you need to do is determine exactly what kind of an online investor network you want to develop. In commercial property acquisition, I suggest you target accredited and/or sophisticated investors.

Develop a website. There are several free web site hosting companies that include free site builder software. Just type in “free web hosting” into a search engine and you will have lots of choices. You will usually have limited space, and the site will have advertising on it to support the company. Keep in mind, you are just getting started, so you will not need a lot of space; once you develop the need for more space you can upgrade to a paid version. The advertising is the compromise you make for starting out on a shoestring.

The next thing you need is an auto responder, so you can keep in touch with your client list. There are several free versions of auto responder services available. Again, they will be limited and have advertising, but again, once you are making money, you can upgrade to a paid service with more functionality.

By far the most lucrative method I have used is WordPress. That is right, WordPress, did you know you can create a website using the WordPress blog platform and cannot tell the difference from an expensive website? Search for WordPress website development to get started. You can develop your own website and fire your webmaster. A particular advantage is that you can add ongoing content as you grow without being a slave to a timeframe dictated by an overworked webmaster.

Do you want to learn more about how to close deals? I have just completed a brand new free guide. Download it free here: http://www.privateplacementsgroup.com

Private Placements Group shares investing secrets and teaches coaches, consultants, and new investment business owners how to package their investment. Richard Sorrentino ATR, is an expert at using articles like this to drive traffic to investment network websites. He says, ” Using investment strategies, I learned, I contributed to closing on a $150 million in portfolio transactions. So can you.”

Why Property Tax Attorney very important?

admin — Fri, 05 Mar 2010 10:25:30 +0000

[...] If you are concerned about any of the statements on your property tax bill, especially the property tax assessment value, you might want to consult with a property tax attorney. Although you can do the process yourself, you may feel overwhelmed by the legalities and find it necessary to have help. You can look in your local phone book under attorney’s ad then look for a lawyer that specializes in property tax issues. You may need to talk to a few attorneys before you find one that can help you with your case.

The property tax attorney can also help you if you owe delinquent property taxes. They can help you save your property from a property tax auction. Whether you need an attorney for fighting a high assessment value or for help establishing a payment plane to pay delinquent taxes, you should find one that specializes in these areas. A divorce lawyer or a estate lawyer may not be the best choice in this case. You need someone that understands the tax laws, and has dealt with property tax issues. This will benefit you more than you could understand. Someone that knows the tax laws is more qualified.

Some people may feel this is extreme for lowering your tax liability, but when you consider the years of taxes paid at a higher assessment rate, you are better off paying an attorney with knowledge and a proven record of accomplishment than paying several thousand dollars over the course of many years. Property assessments are not done every year and when they are done, they very rarely go down, but rather they go up. This will cause problems if you decide to sell your property. Many people look for the assessed value as well as the fair market value.

If you need a property tax attorney, you will find that they are qualified in most areas of the laws governing taxes. You may use a tax attorney to reduce your tax liability on county taxes due, if your property is tax exempt and the bill says that is not. You can also use a property tax attorney if you find your tax bill states your home is a two family home rather than a single family home. This matters because, you are suppose to have less tax liability for a single-family home than a two family home.

The property tax attorney will need all the available documents. The attorney will more than likely ask a private company to do another assessment of the property. This just ensures that you have grounds for an appeal. If the private company finds the assessment to be accurate, you might need to reconsider your appeal. [...]

Think these tips were good? Visit http:/evanchristy.com for more tips that are EVEN better!

Advice for Choosing Commercial Property in PA

admin — Wed, 30 Dec 2009 09:39:34 +0000

PA commercial property realtors and retail space management coordinators will tell you that location is at the top of the list when considering retail space and commercial property in PA. However, the location of commercial property in PA is not the only factor to consider. There are many factors to consider when choosing the best PA commercial property in PA.

Location Yes, location is the first factor to consider when choosing what PA commercial property suits your needs best. PA commercial property that provides convenient access to major transportation, including roads, trains, buses and airports, with easy access to PA’s largest metropolitan areas is prime PA commercial property. Retail Space Management coordinators will say that location is key to attracting customers to your business.

Building The next factor when choosing commercial property in PA is the building and facilities. Choose office space that is comfortable, functional and an aesthetically pleasing workplace for tenants and members of the business community. Choose flexible buildings that are easily adaptable to the varying business needs of different tenants. Retail Space management will advise that you space be easily accessible and visually appealing to your customers.

Property Management/Tenant Services When looking to include retail space at your commercial property in PA consider the retail space management provider. Check references; is the retail space management provider able to correct deficiencies before problems arise? Don’t settle for less than quality personal service and prompt response time from your PA commercial property retail space management provider. Commercial property in PA is a valuable investment. Choosing the best commercial property in PA does not have to be difficult if you stick to the advice of your professional advisors. PA Commercial Property Realtors and PA Commercial Property Developers specialize in choosing the best match when searching for your commercial property in PA.

About Author
Linda Dunkelberger is a freelance writer and editor. “Advice for Choosing Commercial Property in PA” summarizes what PA commercial property realtors provides advises.

Trusted Commercial Property Business

admin — Wed, 23 Dec 2009 09:46:39 +0000

Folks who are looking to buy commercial property have to be a persistent lot and have to do a lot of running around to obtain the appropriate property. It is also skilled to question why a person is going in for the commercial property investment – is it for short term gains or are the strategy more long term?

Choosing the right property may mean wading through a lot of ads as well as consulting records at the land registry department, court papers and records with local law enforcement agencies. As soon as the property has been identified, it’s a question of getting the finances in order. Persons who purchase commercial property usually need to pay higher interest rates than persons planning to purchase a home to live in.

The down payments are likely to be bigger and a loan will be forthcoming only if the credit score is really pleasant, with low incidence of credit card and other consumer debt. The differentiation is made because default rates are higher on rental properties than on properties used as the primary residence. Keeping some cash funds even after the possession of the rental property is advisable, so as to carry out emergency repairs and keep as provision should one or more tenants suddenly decide to leave and there are no replacements for some months to fill up the hole in the income that was projected.

For major repairs and restoration, it could be needed to secure a line of credit which may have to be protected by the rental property itself.

Finally, did you know there are 7 secrets that most thriving Real Estate Investors don’t want you to know? In my free report “SHOCK & AWE Crisis Investing”, I”ll expose these and many more techniques that can increase your bottom line

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Remember the report is emancipated —Don’t Miss Out Click Here Now!

Why to Buy Commercial Property in India?

admin — Wed, 16 Dec 2009 09:46:44 +0000

You may think why to buy commercial property in India in the wake of the economic meltdown. Of course, there was some ground for the apprehension some time back when the real estate industry was still in its sweep. However, the sway of the global economic downturn has left its full grip on the Indian economy and the real estate industry is back in the saddle with renewed vigor. The industry-savvy investor has realized the new trend and is in for harnessing the new momentum. Investment analysts and industry veterans hold that there is an unprecedented fillip in the commercial property sector across India. There are some specific reasons for this new growth in demand for commercial property.

The primary reason why to buy commercial property in India is due to the growing commercial significance of the region. In the newly emerged international marketing equations, the Indian subcontinent is one of the primary markets in the world. This is because of the strategic location and the huge population and wide consumer base of the country. Sensing the growth potential of the Indian market, the major multinational corporations made a beeline for the subcontinent and opened shops here. In the new growth trajectory, the real estate industry has had a quantum leap in India. In order to meet the demands of the growing urbanization, industrialization and commercialization in the region, commercial property was sought after in prime locations across India and in consequence, property prices went up. As a matter of fact, commercial property market has been in the upswing for long, barring the recent slump.

Industry and investment projections and speculations also suggest it is wise to buy delhi commercial properties in India now. Indian economy is estimated to record an annual average growth of 5.4 per cent in the coming years while the developed economies will be lagging behind by 3.8 per cent. Growth in economy has a direct and positive bearing on the real estate industry. It is in this context that the world renowned property consultant Jones Lang LaSalle has said that the property market in India is poised for a sustained growth. He says, “economic recovery during CY 2010 is likely to reinvigorate the interest of foreign investors in India’s real estate market.” There are other catalyzing factors for the growing demand for commercial as well as residential properties in India. Revised pay scales for government employees, better paying private and corporate sector, investment options of non-resident Indians, etc. are some of them. In this context, it is prudent and investment-savvy to buy commercial property in prime locations in India.

About Author
Joseph Smith have 3+ years of experience in content writing of indian property,Buy Property India,Buy Real Estate India,Residential Properties in India and Commercial Properties India.

To Buy Commercial Property or Not?

admin — Sat, 12 Dec 2009 09:54:37 +0000

Real estate investing is all about committing various personal funds on a particular property with the goal of creating returns by having capital appreciation, leases otherwise rentals.

The term real estate refers to properties considered permanent like land with all the furniture erected or attached to it like buildings or apartments. Once a person starts to enter money-making property investment business, he will be requisite to handle some set of elements like the transferring and controlling of rights and possessions. Understanding the turns and quirks of this aspect of transaction is very significant because it engages some long-term and significant commercial property investments in the part of the investor. Moreover, it is good for beginners in this field to assume that real estate market is highly dynamic and unpredictable.

Being equipped for this quirk is needed when a person already decides to go aboard to buy commercial property. Moreover, there are assorted methods in which an investor can engage in estate market.

The first type of real estate investing is through rentals. Persons can decide to participate in this affair with the goal of having a tenant rent the property they own. Through this method, the landlord earns money continuously from the renters through they are still subject in managing the payment of taxes, investment property mortgage, and other expenditure for maintaining the property. Capital appreciation or the increasing of value of the rent of the property through time is also a benefit that the landlord can acquire. A threat of this kind of real estate is when the title-holder of the property can’t obtain any possible tenants. This will lead to negative monthly cash flows because of all the maintenance and mortgage payments. As compared to possessing various bonds and stocks, this area of investing needs time, effort, and patience from the part of the landlord.

Other kinds of commercial property investments are trading, investment groups, and investment trusts. In trading, the owners are merely required to administer their properties for only a short period of time like less than four months and concentrates to sell them within that time range. Another term for this can also be ‘flipping properties’ which is all about having to obtain significant popular and undervalued properties. Investment groups, on the other hand, are more like small mutual funds and are all about setting up rental properties. This involves a landlord owning some units and a qualified company managing, acquiring, and building out the units with some percentage of the monthly rent going to them. Investment trusts, lastly, is a corporation that focuses on real estate investing. Some benefits of this kind of investing is incessant income, exposure of the investors to non-residential investments, and the rule of the distribution of the 90% of the taxable income to shareholders through dividends.

About Author
You can get the best help knowing the 7 secrets of the most flourishing investors. You can get access to the “SHOCK & AWE Crisis Investing” FREE report when you click Here .

Cash In On Property Investment And Earn More

admin — Thu, 26 Nov 2009 09:53:51 +0000

It doesn’t really matter what kind of property investment you are participating in, it’s almost always a wise perception to have multiple streams of revenue in order to raise your profits while spreading your risks. Even within the confines of real estate investing there are diverse types of investing that can help you spread your risks when markets meet confused times and this is a very good safety net for those who do not want to feel as though they are gambling away their investments on a real estate market that is fickle on its greatest days.

How to invest in property?

You really have two courses of actions when it comes to bringing in multiple streams of income when building your financial portfolio. The first is to spread your real estate wealth and investments across several different types of real estate investments. There are a few types that come immediately to mind. First there are rental properties. You have two options even with these. You can either desire to rent properties outright to families, students, singles, and the elderly in your town or you can offer a lease or rent to own situation for those who have struggled in the past but still have the dream of home ownership.

Other options for bringing in multiple streams of revenue through real estate is to have a few rental properties and couple those with a few flips in the works, perhaps a commercial property or two, and a pre-construction deal or vacation condo in the pipelines. One thing is clear you should always be on the guard for your next property investment if you really want to make good money in this business while having a little added security. Rentals are passive income for the most part, especially if you have a solid property supervisor taking charge of the details and the other investments are often icing on the cake.

The truth is that there are many things you can do to create even more streams of income to add to your property investment. From making money online through affiliate marketing, blogs, and direct sales you can also tackle brick and mortar businesses, though these tend to be just as time consuming as real estate. The point is that you want to bring in money from various avenues and real estate investing is one of many different routes to explore when deciding on your investment future and establishing those multiple streams of income.

About Author
To learn more how to invest in property the right way, go to SixfigureSyndication.com and know what other real estate investment strategies can help you increase your income.

Investment Property A Best Option to Get High Financial Returns

admin — Sun, 22 Nov 2009 09:46:19 +0000

There are two ways to get financial returns over the real estate property, first one is in the form of rents and another one is in the form of capital gain on the sale of property, in a particular time frame. The rental could be generated from the residential home whether you are living or not. You can also rent out the spare rooms of your house where you are currently living. It is difficult to find out the reliable and friendly tenants. So, it is usually a better option to buy a separate property, which is used only for generating a rental income.

Property investing is a very tough job in the sense that sometime only expert can be successful in this field. There are various benefits of buying an investment property such as its value rises in the long term, relatively a safe form of investment as compare to the risk worthy investment like stocks, you can be eligible to get tax deductions in the form of depreciation on the value of investment due to obsolescence, you can enhance your cash flows as well by obtaining variations in the tax, in the form of rental income. When the interest on the loan of your property investors becomes higher than the rental income earned from same property then it called negative gearing and this situation can help you to reduce the tax return. According to the survey, the investment in the real estate sector would be the best option to get high returns other than investing in gold, shares & stocks, bank deposits or debts.

After all discussing above benefits, it would be a smart way to take an advice from the qualified experts in this field such as quantity surveyors, real estate brokers, financers and in some case accountants. This makes possible to maximize the benefits you going to receive from your investment property.

http://investmentpropertyx.co.uk/

About Author
lindsay hogan is an Author, Real Estate Agent, Property Consultant, Property Investor, and gadgets lover. For More information on Investment Properties and Property Investing visit at:- http://investmentpropertyx.co.uk/