X

Sign Up

or

By signing up I agree to Property Tribes Terms and Conditions


Already a PT member? Log In

Sign Up

Sign Up With Facebook, Twitter, or Google

or


By signing up, I agree to Property Tribes Terms and Conditions


Already a PT member? Log In

Log In

or


Don't have an account? Sign Up

Forgot Password

To reset your password just enter the email address you registered with and we'll send you a link to access a new password.


Already a PT member? Log In

Don't have an account? Sign Up

  • Property-a-holics

    How legal is this NMD (No Money Down) Strategy?

    http://www.leaseoptionsmastered.com/no-money-down/

    Thoughts welcome. Although would appreciate exact specifics as to why you think it is not legal (if that's your line of thought)

    Thanks in advance
    0
    0
    The presenter in the video worries me. To market yourself as ` Mastermind University` then give a stuttering presentation stating openly that the structure you are promoting may not be legal defies belief. He gives me absolutely no confidence . Surely surely you would check this out first before you made a video. In a way though you have to have a grudging admiration for him for being so honest about the potential illegality of his structure. Perhaps its a double bluff and a cute marketing ploy

    I dont know but I suspect that the 2nd contract is not being disclosed to the lender so the mortgage fraud alarm bells ring loudly in my ear.
    0
    0

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

    (22-08-2012 04:31 AM)Jonathan Clarke Wrote:  The presenter in the video worries me. To market yourself as ` Mastermind University` then give a stuttering presentation stating openly that the structure you are promoting may not be legal defies belief. He gives me absolutely no confidence . Surely surely you would check this out first before you made a video. In a way though you have to have a grudging admiration for him for being so honest about the potential illegality of his structure. Perhaps its a double bluff and a cute marketing ploy

    It is - he's going to go on and tell us about the LEGAL forms of NMD that he and his mates are using. I assume he's referring to strategies like rent-to-rent, lease options and exchange with delayed completion. And of course it will attract interest in his courses/mentoring services. (I actually met Hanif a couple of days ago. He's a business partner of Shimon Rudich and his office is just round the corner from me.)

    As for legality, I've heard other investors describe this approach as something they're doing (or at least have been taught on their mastermind programme) but it sounded dodgy to me. If you disclosed to the lender that the vendor was paying you £20K, would the lender be happy to lend on a £100K purchase price?
    0
    0

    [Image: 75pxLogo.jpg]

    https://www.brumhomes.co.uk / Facebook

    Local to Birmingham/Solihull? Join our Facebook private rentals group:

    https://www.facebook.com/groups/RentalBhamSol/

    Twitter: @RentalBhamSol

    Fraud is hard to prove. The reason is the court has to be sure that there was intent to deceive rather than just a misunderstanding of the facts. It does become easy to prove when there is a pattern or when information is shared that shows what was intended.

    A simple litmus intent is to ask yourself what would happen if you honestly answered all the questions the lender will ask. I am not saying you give them info they did not request. You do need to answer all the questions asked and lenders have learned to ask broad questions to catch most of the corner cases.

    If you can not make the deal work if you did answer the questions or you need to create a bunch of side agreements you are heading in the wrong direction.
    0
    0
    John Corey

    
Share your questions, learn from mistakes & crowdsource answers to your questions -> https://www.propertyfortress.com/community/
    Follow me on Twitter-> www.twitter.com/john_corey
    My blog -> www.PropertyFortress.com/blog
    RE investing discussions happening monthly in London, 2nd Tuesday of the month -> meetup.com/real-estate-advice
    Oh dear, I really cant believe that. The guy in the video is quite well known on the circuit, I have been to hear him speak several times and he's better than that. At first I thought it was a spoof.
    I hope new investors dont watch this and think its a workable strategy, though i cant see any solicitor agreeing to be involved in any deal like this.

    Phil Stewardson.
    Stewardson Developments Ltd.
    http://www.stewardson.co.uk
    [size=small]Follow me on twitter- @philstewardson
    0
    0

    Phil Stewardson.

    Stewardson Properties.

    Stewardson Developments Ltd.

    Burson Land Ltd. & Jennings & Gilchreaste Ltd.

    https://www.stewardson.co.uk

    Follow me on twitter - @philstewardson

    You can wrap it how you like but are walking a thin line.
    Makes you think what Conveyancer would be happy to risk their lively hood to transact this business.

    Richard Shepherd, should probably stop telling his users to ask CML/FSA if they would allow it and call himself. Im sure he knows the answer already though, with full disclosure the application would be refused.
    0
    0

    THIS PROPERTY TRIBES ACCOUNT IS NO LONGER USED.
    DO NOT SEND PRIVATE MESSAGES.

    --- MORE INFO HERE ---

    YOU CAN REACH ME AT BESPOKE FINANCE or MY TEAM AT 08009202001







    Oh dear ... 2007 is calling and wants that video back!

    Some observations:

    The video is called "Mastermind University" but is somewhat poor quality sound and picture, with a shaky camera, making it hard to watch.

    At the beginning, he says "I am not sure if this is 100% legal". Why would anyone produce a video as a teacher and not understand what they are teaching or be able to stand by it?

    The video mostly appears to be a data capture tool to collect people onto a mailing list.

    I could only manage to watch the video about 4 minutes as the sound was so poor, but it appeared to be a classic "non disclosure" structure where there is a net price and a gross price and the net price is NOT disclosed to the lender. That is tantamount to mortgage fraud. It would also involve lying to the valuer.

    So to answer the question, this video has little value ... other than for the presenter who will capture the data of people who want something for nothing!
    0
    0
    I have not listened to the full video. I think the presenter, someone I do not recognize, has answered his own question as to the legal status.

    When he says the contract price is X and the actual price ix Y, the word actual says is all.

    If that is the actual price, it does not matter how many ways you dress up the other numbers. The material item is the actual price and not some random number put on pieces of paper to create something the lender will think is the sale price.

    Similar to when a developer packages up a flat for sale by offering a free Mercedes. The 'inducement' or other payment has the effect of changing the value of the deal. Lenders want to see any inducements to be reduced from the price and they want all related transactions between the parties to be declared.

    Does anyone else think the arrows are pointing the wrong direction? The cash does not flow in the direction of the arrows.

    BTW - Just because there might be a solicitor who will process the paperwork that fact does not make the structure legal. The solicitor is not signing the loan agreement so they are not taking all the risk. They have the risk they could lose their right to practice or worse. The investor is still the one that did the deed so could face jail time. There is an investor who received jail time and the lender suffered no economic loss as all the loans were paid as agreed.

    In a completely unrelated case a guru solicited money from multiple investors and bought properties in Nottingham. They broke an FSA regulation and it is likely they did not even know they were doing so when it first happened. The investor was forced to sell quickly and when they could not they were made bankrupt. In other words, ignorance of the law does not count and you can be prosecuted even if you did not understand the advice was bogus.
    0
    0
    John Corey

    
Share your questions, learn from mistakes & crowdsource answers to your questions -> https://www.propertyfortress.com/community/
    Follow me on Twitter-> www.twitter.com/john_corey
    My blog -> www.PropertyFortress.com/blog
    RE investing discussions happening monthly in London, 2nd Tuesday of the month -> meetup.com/real-estate-advice
    Does anyone else think the arrows are pointing the wrong direction? The cash does not flow in the direction of the arrows.

    Yes, I noticed that as well and it confused me. The arrows should actually go in the other direction.

    Even then it does not make sense for the reasons John states.

    As we know that lenders regularly patrol the web to suss out who is trying to get NMD deals through, it does not really make sense to make a video of the nature, let alone one that is incorrect and the Presenter admits that he does not understand what he is teaching.

    Related reading: Top 10 reasons why you will never bring a No Money Down deal to completion.
    0
    0
    I think everybody is missing the point to this video which is that it is excellent marketing for its target audience.

    Just because the people who frequent this website (who are often clued up and experienced investors) are not the target, does not mean that it is not an effective sales tool.

    Hanif is a very clever creative entrepreneur who also runs a lot of lettings industry. He admits that he would not use the strategy and prefers options / rent to rent etc.

    However, there are people out there who are willing to 'push the envelope' - and this marketing is designed to get those people to register to sell the course.

    BTW - It is not legal - But that's not the point of the video. The point is to sell a property course which I am sure it will have some success in doing.
    0
    0

    One basic flaw is a few minutes in. (2mins 35)

    If the property is being contracted for £100k and the agreed purchase price is £80k - any lender would raise a mortgage based on the lower of the agreed purchase price or market value when valued.

    A lender won't base the mortgage on the £100k he mentions - if THEY value it.

    You can't circumnavigate the lender's requirements for the evidence of deposit either.
    0
    0
    Just making things that much easier…
    Based on the South Coast we're perfectly positioned to help you - wherever your location.
    As heard on BBC5Live and BBC Radio Solent

    CALL NOW ON (01590) 718083
    or follow me on Twitter - @Mortgage_Stu
    YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
    For mortgages we can be paid by commission, or a fee of usually £495 or a combination of both. Lentune Mortgage Consultancy Limited is an appointed representative of Sesame Limited, which is authorised and regulated by the Financial Services Authority. Registered in England and Wales: Ref 6753050
    8 Blakes Yard, New Street Mews, Lymington, Hampshire. SO41 9NW