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  • Peer to Peer Lending

    80% return for 26 weeks

    A friend of mine is seriously considering investing 20,000 in a P2P loan to hometrader privilege club who are offering 80% return for 26 weeks. He is attracted by the high return but I advised him against it as it seems to high to be real. Any thoughts or comments?

    It is on their website which can easily be googled but for ease of reference I quote as follows:



    Returns Of £16,054 or 80% Profit On Your Investment Of £20,000 In 14-26 Weeks!
    Manchester - 3 Bed Semi

    There is no better rate of return on any UK investment than a Joint Venture with Hometrader. You need no experience to become a property trader and earn lucrative returns from our Joint Venture programme.

    We have purchased this 3 bed semi at Auction for just £76,000.00 which is 63% of true market value. This home will value at £119,950.00.
    •Invest £20,000 towards the purchase and development costs of this property. You become co-owner and we will give you £16,054 of the net profit on re-sale to a first time buyer.
    •Your investment is fully securitised at HM Land Reg via a Solicitor.
    •Your share of the profit is £16,054 or a 80% return on your investment in approx 14-26 weeks time.
    •JV exit is via a 5% Deposit Paid Scheme for first time buyers. This facilitates a quick re-sale and is a tried and tested route to selling repossessed property quickly. We have been selling property this way for
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    You are correct to warn your friend Tom.

    Anything offering high returns is automatically higher risk.

    In property investment, the one thing that will always tell the truth is the numbers, because numbers never lie.

    When I read of "schemes" like this, its easy to work out that the numbers simply do not add up.

    Further due diligence on the company in question will reveal that they were behind the ill-fated Property Assets scheme.

    This is just a re-hash of the Property Assets scheme, which has already failed spectacularly with many investors wondering where their money has gone.
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    OMG why are these people still going!!!

    Tell your friend to Google Brendan Kiely and any of his brothers and he'll get all the answers he needs.

    Lisa
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    Lisa All comments are for education and information purposes only and do not construe as advice or a financial promotion. No liability is accepted for comments made. If you wish to receive information in an advisory capacity then please contact me about becoming a client. www.keys-mortgages.com

    Tom,

    Two options. Either your friend comes to their senses or they will just be out the money so no longer able to make bad decisions.

    If you want to be even more helpful, report the offer to the FCA. Let them investigate as I am not sure it is even legal for the offer to be posted publicly (possible PS 13/3 violation).
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    John Corey 


    I host the London Real Estate Meet on the 2nd Tuesday of every month since 2005. If you have never been before, email me for the 'new visitor' link.

    PropertyFortress.com/Events

    Also happy to chat on the phone. Pay It Forward; my way of giving back through sharing. Click on the link: PropertyFortress.com/Ask-John to book a time. I will call you at the time you selected. Nothing to buy. Just be prepared with your questions so we can use the 20 minutes wisely.

    (27-04-2014 03:13 PM)john_corey Wrote:  Two options. Either your friend comes to their senses or they will just be out the money so no longer able to make bad decisions.

    I like this philosophy

    I have a friend I`ve known for best part of 40 years. He consistently makes poor financial decisions and has continued that theme throughout his adult life. He never takes my or other well meaning peoples free advice but just does his own thing. As a result he has never had a lifestyle consumerate with one that you perhaps would think his intelligence ( in other areas) and best education should have afforded him

    Having as a consequence lived very frugally for many many years because of this he was recently `saved` by a substantial inheritance about a year or so ago but the cycle of poor spending re emerged again after laying dormant for 20 odd years now that he had money.

    And despite my best efforts to educate him afresh the problem continued.. Much has been squandered away with nothing really to show for it and the next 30 years could have been so different. He lives in a one bed flat in the poorest roughest area of town.

    I`m beginning to wonder if there is a financial gene we have that some are blessed with and others unfortunately have somehow missed out on .
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    Jonathan Clarke. http://www.buytoletmk.com

    Tom

    My recommendation from my own experience is tell your friend to not, nor you, should be seduced by the tantalising profits offered by this company.

    As highlighted above, look at the Property Assets discussion on the PT forum.

    The facts are that over 200 investors invested a minimum of £20k via Property Assets ltd, in supposed undervalued properties offered by HomeTrader.

    Your security will only be a Unilateral Notice (UN), which will be legally applied by Dixon Law solicitors.

    In my case, my UN was put on a property with two other UNs, which only came to light after Property Assets ltd went bust. Also the property had a substantial mortgage on it from a major UK bank. The point being there was close to zero equity in this property prior to my initial investment.

    Brendan Kiely, the boss of HomeTrader, offered to repay my investment earlier in 2014 in a face to face meeting. But this was only a stalling effort. Two months after the due date of my proposed refund from Kiely, still not a penny repaid to me.

    I am thankfully now taking legal action against Kiely and HomeTrader to get a refund. Also, without divulging to much information there are quite a lot of other investors doing the same as me.

    In summary, DO NOT INVEST A PENNY with Hometrader. The advertising looks tantalising. But do not be fooled.

    I will send you a private email with more info.
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    If for some bizarre reason your friend chooses to ignore all the sound advice given here then make sure that your friend gets their own solicitor. They must be sure of where the money is going. Check that there are no other mortgages on the property. Find out from the Land Registry what the actual purchase price was. Quite often the quoted "purchase price" bears no resemblance to how much the property was purchased for. If you email me the address of the property I will check it out. Find out what refurbishment will be carried out and at what price. Check the proposed resale value with a local agent.

    Regards
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    Partner, Anthony Gold Solicitors Dispute Resolution team

    Thanks everyone for your comments and advice. It is much appreciated and I have advised my friend to exercise caution, a lot of caution. He has, I think, taken the advice but clarified two things. One is that he will use his own solicitors, and says he would never use one recommended by any other party to the transaction. The other is that his solicitor would get a real charge on the property, not a meaningless universal letter, whatever that is.
    Can I please ask some advice as to how a charge works? Assuming the PP is 40,000 and he lends 20,000 and gets a charge ( 1st and only charge). Then can other charges be added later without his consent? Then if a second charge is taken, for say 20,000 also, what is the situation if the property can only be sold for 30,000. ie are the proceeds shared equally or does the first charge get paid in full and 10,000 goes to the 2nd charge? Even in the latter scenario, my friend could presumably still be out of pocket for legal costs and interest?

    Thanks.
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    Yes second charges could be added without his consent.

    But even if they aren't, the cost of repossesing a property to get his money back if things go wrong are huge.

    The legal costs would probably be more than the original 20k in your example.

    A recent example of this is the Teresa Rolland vs Glenn Armstrong case where Teresa has spent huge sums to reposses a property where a charge was security for a loan, pretty similar type of deal to what's being offered to your friend.

    So basically the charge doesn't make it a safe deal.

    I wouldn't touch these type of JVs with a bargepole. If the returns sound too good to be true, they probably aren't true !!
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    Yes it's strange Jonathan,

    I know some highly intelligent / intellectual people who earn 40k but spend ridiculously and leave themselves skint (I'm sure I've told the story on here before about my mate who used a QuickQuid payday loan to pay for a £1200 pram).

    Yet I know people on minimum wage who are really good with living within means and actually save into ISAs, yet seem to lack the capacity to get better paid jobs.

    Can't work it out for the life of me, maybe you're right and it is genetic?
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    (28-04-2014 07:52 AM)daniel_booth Wrote:  Can't work it out for the life of me, maybe you're right and it is genetic?

    Yes it is strange. For some it seems like a blind panic and they just go into meltdown.
    They get overwhelmed sometimes before I have even started explaining what to me appears to be common sense
    This guy has just spent the best part of 20K over the odds on a house. One quick check on rightmove would have shown about 3 comparables which are being marketed at the more realistic value

    I go mad if I`ve found Ive spent 10p more on a can of beans than I needed to :-)

    But then again put me in a car showroom with a slick salesman and I`m the same. I know nothing about cars and I am that gullible that I really seem to believe their engaging patter and that go faster stripes really do make a car go faster!

    I therefore have to sometimes use the profits gained using my fully functioning gene to pay for the losses of my other embarrassingly defective one!

    Result - Happiness





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    Jonathan Clarke. http://www.buytoletmk.com