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  • Peer to Peer Lending

    Better Sourced Ltd - analyse this!


    We also have an opportunity for an investor to invest funds into a project for a maximum of 12 months. You can earn passive income monthly from month 1.
    • Capital required £45000
    • Term 12 months
    • Interest of £450 paid monthly on 1st of each month
    • Capital repaid within 12 months
    • 1st charge on the property can be assigned
    • This is a really quick and simple way to make your money work for you without you having to get your hands dirty.
    • Funds required within 48 hrs”
    If you were presented with this deal:

    -What DD would you be doing.

    -What protection would you want.

    -Would the barge pole be deployed or would you be interested.

    Discuss.

    SBS.
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    Omega Property (Formerly SBS Ltd.)

    I am not professionally trained to give advice, generally posting for the benefit of the community or my own personal development.

    Do I trust the person providing me with the opportunity? What DD have they done?

    Do they know the person??

    If it is just a mass email or advertisement I will most likely leave it as there is the lack of trust and I will not know the person doing it. 

    However if I could meet the person I might be willing. 

    I would want to see the property in mind and their plan with it also need to see what other projects they have done. 

    Lastly my solicitor need to see the paperwork behind to secure me personally. 

    I would want to take security in the property as a 1st charge.
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    Take a look on Companies House, see who you're dealing with, this company is ran by SL who has had a lot of negative information posted about him, i would proceed with caution ...

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    I'm suprised he wasn't trying to charge a Finders Fee for that opportunity too!

    He doesn't state on the mailer whether your lending to Better Sourced Ltd or himself, one of his mentees / partners projects? fellow SL Academy Members?

    It's one thing to be selling package deals as they do but looking to reach out to his client list for funding projects I fear will only end in tears for someone.

    Extensive Due Diligence and Specialist Legal Advice is required if you are considering this type of lending/loans.

    Proplend has just replied to a similar post on the Risks of private first charge lending/loans? thread so, thought would repost his answer here.....

    Lending the money is the easy bit, whether its secured by a 1st legal charge or not.

    Making sure that the borrower pays you the interest they agreed to and when they agreed to, monthly / anually etc  and that the borrower repays the loan in full and on time, is the difficult bit.

    So the very basics are:

    • knowing who you are lending to (KYC and AML check)
    • why do they own or are buying the property
    • what are they doing with those funds (whats their business plan)
    • how will they make monthly interest repayments
    • how do they intend to repay you the capital lent
    • need a RICS valuation on the property to agree what its value (so you can understand your LTV / risk)
    • need a legal report on title to ensure that you are able to take a clean 1st legal charge
    • need to document the loan and the security properly (loan agreement, legal mortgage, debenture and PG if lending to a SPV)
    • need to register the charges at land registry and companies house (if applicible)
    • need to ensure that they service the loan monthly
    • if the loan goes into default, then as the lender you can become a mortgagee in possession, have the right to appoint a LPA reciever. They will take control of the property and generally sell the property in order to redeem the outstanding loan.
    • the costs of the LPA reciever and the sale cost, will sit ahead of the 1st legal charge in the repayment waterfall

    Lending risks include:

    • borrower fraud
    • borrower not paying interest
    • borrower not repaying capital
    • borrower not executing business plan
    • loss of rental income / tenant (if investment loan)
    • development risk (if property development loan)
    • loan and security not correctly documented and registered

    Property debt can be the safest property investment if conducted correctly. The lender has a 1st legal charge, sits ahead of the equity (who provide a cushion of a minimum of say 25% if the property were to fall in value), is first in line to be repaid when the property is sold or refinanced and requires the borrower to get permission for any changes to the property.

    Remember, until you own a property unencumbered, whilst your name may be on the title deeds, the lender of record is in a very strong position.

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    I made that post about first charges after receiving that email. Was interested to see the thought process people would go through when presented with the offer. Probably should have just posted the email like OP did.
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    One thing it does show Daniel, is that his marketing reach is working with two people looking to get clarification / advice just from this site.......

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    The shame, the shame! Very easy to get drawn into it seems
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    I struggle to understand how anyone could agree to lend £45K with so little information provided.  It's a significant sum of money yet you are expected to make up your minds with lack of detail and there's a clear sense of urgency for you to do so.

    At least two people had the sense to ask for community feedback - but I fear you will be in the minority.

    Also - a general comment about these kind of communications - if 20 people respond and all offer the £45K are 19 of them going to get turned down?

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    You need to TEXT them immediately and then they'll call you back........they want the money 48 hours.........as you say I wonder how many they actually engaged.

    Very concerning, It's one thing to be selling package deals as they do but looking to reach out to their client list for funding projects I fear will only end in tears for someone.

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    Yeah! They want money within 48 hrs.. scams normally has an element of urgency. Why 48 hrs?
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    All views expressed are my own and do not represent the opinion of any entity which I have been, am now, or will be affiliated. I am not responsible, in any way whatsoever, for the use of the information contained in or linked in the post.

    The main thing that brings huge doubts to myself is for a company that claims to be one of the biggest sourcing companies in the country, why wouldn't they put the £45K up themselves and take the 'easy' 10% themselves? 

    When someone is passing up on a deal and you know they have the means to fund it it is very strange imho (amongst all the other reasons people have posted)
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