Buying off-plan: the pitfalls?

[minniejessica]

Newbie desperately seeking advice/help!

So i have a sum of money to invest £140,000 for the medium to long term.

So i've researched the net, exhibitions, etc... done my homework and shortlisted the people i want to go with like crimsoninvestments.co.uk, saiinvest.co.uk, serliana.com, ticltd.com, viceroyparkproperties.co.uk

Now all these companies out there, tell you they can 'help' you create and manage your portfolio... but that is just the problem... 'help' 'assist' 'refer' .. they will help me manage my portfolio for the properties i purchase through them but what if for example, serliana.co.uk and ticltd.com have the same project for sale but serliana.co.uk has negotiated a bigger discount then ticltd.com ... obviously to maximise my money i would got with who has the better deal .. but theoretically, in the end, i'll have off plan properties with all of them....

So now, i'm wondering before i start shelling out WHERE DO I FIND A NON BIASED PORFOLIO MANAGER who will help walk me through the ropes and help me create a portfolio regardless of who i buy them from. So in effect, what am looking for is the advice and not the properties. If that makes sense.

But i've spent hours trying to find this 'person' but they either sell their own properties and advise only on them or they only deal with 'commercial properties for wealthy families, etc...'

and then there is the issue of tax planning, inheritance tax planning, creating a property trust (as the money i have to invest is the family's). So does all this fall under tax, law or financial advice?

Can anyone help? And tell me where i can find a company who would help me create a portfolio from scratch, help me with the tax planning, create a strategy and after value my portfolio so i can take out the equity and continue investing? Without having to buy the off plan properties exclusively from them!
thanking you kindly in advance if you have a contact that you can pass on ;0)

[daz181]

Let me tell you a “story”

Once upon a time there was a clever man who had aspiration to become a big time property investor.

Having read “Investor site” after “Investor site”, paying £150 here and £300 there, he finally found utopia (Knowledge is King he though) I now know everything there is to know.

Taking his 40K he searched the market for those elusive property deals. Then one day he came across a “Property Club”, how fantastic, what joy, there offering 15% discount no money down and the chance to own a property with instant equity.

He contacted them immediately, in fear he may loose the chance to get his hands on that property.

Well as you can imagine, the “Property Club” were overjoyed that he had contacted them as this was the best deal ever, 2k down (non returnable), 2% finders fees and then, they would pay 15% deposit, stamp duty and even his legal fees were covered ((((WOOOOW))). This was music to his ears. Card in hand and without thought he paid his 4Kdown, thinking “I must not loose this deal”, they have told me “they will be gone in a matter of hours”.

Thing now were moving, fantastic he though (not only did he buy one but two) …. Millions Rodney…Millions.

Now, he thought I must instruct the Mortgage Company. Contacting the “Property Club” he explained that he had instructed his mortgage company to get the surveyor there as soon as possible because he only had 28 days to complete and he did not want to loose this very lucrative deal, I mean, he would have 46K of instant equity once bought. The lovely lady at the “Property Club” gasped “what do you mean, your own "Mortgage Company”, no, no you must use ours. Well as you can imagine a long conversation ensued and in the end the lovely lady had to give in to his request to use his “Mortgage Company”.

Some days past and he was getting very impatient waiting “I want that profit”, he thought, picking the phone up he phoned the “Mortgage Company”, a lovely lady answered, asked the normal security questions, and then with a very soft spoken voice said “Sir, I’m very sorry but the properties have been valued 15% below purchase price”, devastated with this news he rang his “Property Club”, the lovely lady answered and was overjoyed to hear him on the phone, until he broke the bad news “Value did not stand up”, “rubbish”, she said, in a scornful voice, see I told you to use our “Mortgage Company”, it’s your own fault and hung up.

Devastated, he retired to his old faithful chair to mull over the days event. Hold on one second he thought, these properties are overvalued, if that is the case then surely this is fraud “of sorts”, I want my 4K back.

Next day armed with information from several sources including his RICS surveyor, he phoned the “Property Club”, the lovely lady answered in her usual lovely voice, then he said “These properties have been overvalued and that not fare, your conning me, I want my 4K back”, the lovely lady went into fits of laughter, “Money Back, Money Back” no, you signed up to our non refundable scheme, get real and hung up.

In a state of panic he phoned every legal eagle he had access to, everyone of them said “You don’t want to get involved in this type of deal, unless you are prepared to loose money”, sad and dejected he made his way to the local bar, following several drink a man (The Developer) walked in and they started to exchange niceties, “the Investor” explained his plight and the man laughed out load, why are you laughing asked the Investor. Well he said I hear this story every other day and still people fall for it, he continued, unless your prepared to pay the market price for a property (NO equity) and you are happy to spend 2% of the “overvalued price” for finding it (had you come to me on your own I would have given it to you anyway) and then fight with others to rent it (which may drive down the rental price) or worst still you may be left with no tenants for a few months, never, never buy from “Property Clubs”.

However said the “Developer” I’m happy because I sold all my plots at full market price without having to give a single penny discount (Discounted overvalued price), the “Property club” is happy they got 2% plus kickbacks and your happy because you got a property “aren’t you?”!

Investor, though about this for a while, so I end up with a property I own (Mortgage Company owns) with no equity, potentially no tenants (which I may have to pay the interest every month) and even if I sold may only get 95% of the market value (discounted price) and the Property club still say I had a fantastic deal! Hmmmm……

Remember – “A developer can set the price of a development without regard to the true market value; there is nothing illegal in doing this”. I can sell a car with discount incentives “Car, Blue, Nice” £3000.00 deposit paid 15%, MOT paid, get instant equity of £450.00 Rental potential = £80 per day. Finders fee just 2%

WOULD you buy a car from me!? Are you sure you want to give your money to them??????

The best person to help you build a property portfilo is you....

[rich hand]

Let me tell you a “story”

Once upon a time there was a clever man who had aspiration to become a big time property investor.

Having read “Investor site” after “Investor site”, paying £150 here and £300 there, he finally found utopia (Knowledge is King he though) I now know everything there is to know.

Taking his 40K he searched the market for those elusive property deals. Then one day he came across a “Property Club”, how fantastic, what joy, there offering 15% discount no money down and the chance to own a property with instant equity.

He contacted them immediately, in fear he may loose the chance to get his hands on that property.

Well as you can imagine, the “Property Club” were overjoyed that he had contacted them as this was the best deal ever, 2k down (non returnable), 2% finders fees and then, they would pay 15% deposit, stamp duty and even his legal fees were covered ((((WOOOOW))). This was music to his ears. Card in hand and without thought he paid his 4Kdown, thinking “I must not loose this deal”, they have told me “they will be gone in a matter of hours”.

Thing now were moving, fantastic he though (not only did he buy one but two) …. Millions Rodney…Millions.

Now, he thought I must instruct the Mortgage Company. Contacting the “Property Club” he explained that he had instructed his mortgage company to get the surveyor there as soon as possible because he only had 28 days to complete and he did not want to loose this very lucrative deal, I mean, he would have 46K of instant equity once bought. The lovely lady at the “Property Club” gasped “what do you mean, your own "Mortgage Company”, no, no you must use ours. Well as you can imagine a long conversation ensued and in the end the lovely lady had to give in to his request to use his “Mortgage Company”.

Some days past and he was getting very impatient waiting “I want that profit”, he thought, picking the phone up he phoned the “Mortgage Company”, a lovely lady answered, asked the normal security questions, and then with a very soft spoken voice said “Sir, I’m very sorry but the properties have been valued 15% below purchase price”, devastated with this news he rang his “Property Club”, the lovely lady answered and was overjoyed to hear him on the phone, until he broke the bad news “Value did not stand up”, “rubbish”, she said, in a scornful voice, see I told you to use our “Mortgage Company”, it’s your own fault and hung up.

Devastated, he retired to his old faithful chair to mull over the days event. Hold on one second he thought, these properties are overvalued, if that is the case then surely this is fraud “of sorts”, I want my 4K back.

Next day armed with information from several sources including his RICS surveyor, he phoned the “Property Club”, the lovely lady answered in her usual lovely voice, then he said “These properties have been overvalued and that not fare, your conning me, I want my 4K back”, the lovely lady went into fits of laughter, “Money Back, Money Back” no, you signed up to our non refundable scheme, get real and hung up.

In a state of panic he phoned every legal eagle he had access to, everyone of them said “You don’t want to get involved in this type of deal, unless you are prepared to loose money”, sad and dejected he made his way to the local bar, following several drink a man (The Developer) walked in and they started to exchange niceties, “the Investor” explained his plight and the man laughed out load, why are you laughing asked the Investor. Well he said I hear this story every other day and still people fall for it, he continued, unless your prepared to pay the market price for a property (NO equity) and you are happy to spend 2% of the “overvalued price” for finding it (had you come to me on your own I would have given it to you anyway) and then fight with others to rent it (which may drive down the rental price) or worst still you may be left with no tenants for a few months, never, never buy from “Property Clubs”.

However said the “Developer” I’m happy because I sold all my plots at full market price without having to give a single penny discount (Discounted overvalued price), the “Property club” is happy they got 2% plus kickbacks and your happy because you got a property “aren’t you?”!

Investor, though about this for a while, so I end up with a property I own (Mortgage Company owns) with no equity, potentially no tenants (which I may have to pay the interest every month) and even if I sold may only get 95% of the market value (discounted price) and the Property club still say I had a fantastic deal! Hmmmm……

Remember – “A developer can set the price of a development without regard to the true market value; there is nothing illegal in doing this”. I can sell a car with discount incentives “Car, Blue, Nice” £3000.00 deposit paid 15%, MOT paid, get instant equity of £450.00 Rental potential = £80 per day. Finders fee just 2%

WOULD you buy a car from me!? Are you sure you want to give your money to them??????

The best person to help you build a property portfilo is you....

That was a strange amount of effort. However, what about the many estate agents who now now sell off plan with 15% discount backed by a RICS surveyor eg. TIC invest, new-homes-direct.com, Assetz, Hattan and Grand etc?

[minniejessica]

Let me tell you a “story”

Once upon a time there was a clever man who had aspiration to become a big time property investor.

Having read “Investor site” after “Investor site”, paying £150 here and £300 there, he finally found utopia (Knowledge is King he though) I now know everything there is to know.

Taking his 40K he searched the market for those elusive property deals. Then one day he came across a “Property Club”, how fantastic, what joy, there offering 15% discount no money down and the chance to own a property with instant equity.

He contacted them immediately, in fear he may loose the chance to get his hands on that property.

Well as you can imagine, the “Property Club” were overjoyed that he had contacted them as this was the best deal ever, 2k down (non returnable), 2% finders fees and then, they would pay 15% deposit, stamp duty and even his legal fees were covered ((((WOOOOW))). This was music to his ears. Card in hand and without thought he paid his 4Kdown, thinking “I must not loose this deal”, they have told me “they will be gone in a matter of hours”.

Thing now were moving, fantastic he though (not only did he buy one but two) …. Millions Rodney…Millions.

Now, he thought I must instruct the Mortgage Company. Contacting the “Property Club” he explained that he had instructed his mortgage company to get the surveyor there as soon as possible because he only had 28 days to complete and he did not want to loose this very lucrative deal, I mean, he would have 46K of instant equity once bought. The lovely lady at the “Property Club” gasped “what do you mean, your own "Mortgage Company”, no, no you must use ours. Well as you can imagine a long conversation ensued and in the end the lovely lady had to give in to his request to use his “Mortgage Company”.

Some days past and he was getting very impatient waiting “I want that profit”, he thought, picking the phone up he phoned the “Mortgage Company”, a lovely lady answered, asked the normal security questions, and then with a very soft spoken voice said “Sir, I’m very sorry but the properties have been valued 15% below purchase price”, devastated with this news he rang his “Property Club”, the lovely lady answered and was overjoyed to hear him on the phone, until he broke the bad news “Value did not stand up”, “rubbish”, she said, in a scornful voice, see I told you to use our “Mortgage Company”, it’s your own fault and hung up.

Devastated, he retired to his old faithful chair to mull over the days event. Hold on one second he thought, these properties are overvalued, if that is the case then surely this is fraud “of sorts”, I want my 4K back.

Next day armed with information from several sources including his RICS surveyor, he phoned the “Property Club”, the lovely lady answered in her usual lovely voice, then he said “These properties have been overvalued and that not fare, your conning me, I want my 4K back”, the lovely lady went into fits of laughter, “Money Back, Money Back” no, you signed up to our non refundable scheme, get real and hung up.

In a state of panic he phoned every legal eagle he had access to, everyone of them said “You don’t want to get involved in this type of deal, unless you are prepared to loose money”, sad and dejected he made his way to the local bar, following several drink a man (The Developer) walked in and they started to exchange niceties, “the Investor” explained his plight and the man laughed out load, why are you laughing asked the Investor. Well he said I hear this story every other day and still people fall for it, he continued, unless your prepared to pay the market price for a property (NO equity) and you are happy to spend 2% of the “overvalued price” for finding it (had you come to me on your own I would have given it to you anyway) and then fight with others to rent it (which may drive down the rental price) or worst still you may be left with no tenants for a few months, never, never buy from “Property Clubs”.

However said the “Developer” I’m happy because I sold all my plots at full market price without having to give a single penny discount (Discounted overvalued price), the “Property club” is happy they got 2% plus kickbacks and your happy because you got a property “aren’t you?”!

Investor, though about this for a while, so I end up with a property I own (Mortgage Company owns) with no equity, potentially no tenants (which I may have to pay the interest every month) and even if I sold may only get 95% of the market value (discounted price) and the Property club still say I had a fantastic deal! Hmmmm……

Remember – “A developer can set the price of a development without regard to the true market value; there is nothing illegal in doing this”. I can sell a car with discount incentives “Car, Blue, Nice” £3000.00 deposit paid 15%, MOT paid, get instant equity of £450.00 Rental potential = £80 per day. Finders fee just 2%

WOULD you buy a car from me!? Are you sure you want to give your money to them??????

The best person to help you build a property portfilo is you....

Thanks for the advice ;0) But that is my point... which is why i am looking for an UNBIASED ADVISOR.. i know the direction i want to take but need the expertise.

Would you operate on a sick person or would you find a surgeon to do so.

[daz181]

You've missed the point. Do your own research, talk to letting/estate agents they know the market better than any one else. Visit developments at start of june and december when its the developers half and full year results time. Do a deal with them, start by asking for 20% off. Most will give you 15%.. The point is, try it for yourself, thats how i started.. However make sure the developemt has already start.. :)

cheers

Darren

[jai]

Thanks for the advice ;0) But that is my point... which is why i am looking for an UNBIASED ADVISOR.. i know the direction i want to take but need the expertise.

Would you operate on a sick person or would you find a surgeon to do so.

No i wouldn't but this is'nt anywhere near as difficult as surgery.

Dont talk to so called "experts" in the property companies. They have 1 motive. To sell!

Take it slowly, cut ur teeth on a small relativly low risk property and then take it from there. You dont need anyone to hold ur hand all the way through..

Plus any company that will manage ur portfolio for you will charge you through the nose.