Sunday, March 16, 2008

Summary of muppets being turned over by property investment club.

Investors suffer as buy-to-let backfires

All 49 flats in this block in Manchester are owned by amateur investors - 37 of them thanks to one property club. Now it is feared that their value has slumped by HALF - or worse - in four years. "two-bedroom flats it said were worth £140,000 and likely to attract up to £650 a month in rent. It is not known what the properties are worth today, but a two-bedroom flat in the development failed to sell at auction in December for a guide price of £70,000. The flat is now let for £425 a month."

Posted by housing carbuncle @ 03:46 PM (1212 views)
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14 thoughts on “Summary of muppets being turned over by property investment club.

  • Muppets exist in every arena where there are risks and return. Whether you’re looking at stock markets, gambling exchanges, lottery games or property markets, muppets will appear when rewards seem easy to be me made relative to the risk.

    The problem with these property muppets is the sums of money involved and the social implications housing being viewed as an investment. Whilst bubbles have are a function of human nature, I can’t think of a bubble that has ever had such leverage. To gain exposure to a flat “worth” £140,000 using only £2500 implies a leverage of 56 times. People have been balking at the leverage of Carlyle Capital that leveraged only 32 times.

    The other problem of course is the time that this will take for the de-levaraging to take place. Since true prices are unavailable, people can live in denial for longer – maybe never even sell and simply live in worthless debt for years.

    The sooner the FSA regulates jokers like Inside Track the better. They are already 20 years too late.

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  • Landedgentry says:

    Entertaining article 🙂

    Nice one housing carbuncle

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  • Sold My Soul To The Never Never Never says:

    It’s the same old story now – see yesterday’s posting of the retired teacher. Wholesale corruption and how Nu Labour did not intervene – but they wouldn’t as they too were on to a nice little earner collecting easy money with Stamp Duty, VAT etc. for their coffers.

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  • “Inside Track’s promises are tempting: ‘How to retire completely debt-free in three to five years’ and ‘how to buy lucrative UK property with little or no deposit’.”

    If it sounds too good to be true …

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  • Singlespeed says:

    Insidetrack are a pest to my postbox and I have no sympathy for all those greedy idiots who thought they would become rich by attending
    a seminar.The business model is floored just like Northern Crocks – I mean Rock ! .Anyone with a grasp of the basics of economics and
    business cycles knows that. A professional investor always protects the capital employed as part of risk management first,the profits come
    second !! .

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  • mark wadsworth says:

    Muppets indeed. Impossible to feel any sympathy for them whatsoever.

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  • if you can buy great investments with no deposit, why dont inside track buy all of them ??

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  • it_is_going_with_a_bang says:

    The greed of the investors is as much a part of it as the club itself.
    No sympathy whatsoever. They gambled and they lost. Boo Hoo.

    As I have said before these “investors” don’t give a dam about anyone other than themselves.

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  • japanese uncle says:

    £2,500-a-time seminars
    —————————————

    Throwing good money after bad. Double-treble ruthless exploitation, disgustingly incredible. What a nerve!

    Cunning strategy to make suckers feel that they are not pushed with garbage, but allowed a precious opportunity to ‘invest’.

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  • japanese uncle says:

    Just to follow-up:

    In Japan there is a saying “Here comes a duck carrying leeks on its back” (providing all ingredients for duck stew by itself)

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  • little professor says:

    These “investors” deserve everything they got. You don’t take on a £140,000 commitment without doing some basic research yourself, rather than just relying on a slinky sales seminar.

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  • nopensionnohouse says:

    I would love to see how the maths teacher couple get on this year when they have to remortgage some of their properties.

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  • Hey Guys, had this really brilliant idea for making more money from BTL.. “Bunk Beds” 2 for the price of 1… don’t knock it!

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  • The Inside Trash model works fine when prices are continually inflated year on year and the “equity” from one property is withdrawn to fund another purchase and build the portfolio etc.. it rapidly falls apart however if prices stagnate or worse still begin to fall (no hint of this scenario at the Inside Trash seminars)

    Greed (IMO) was/is at the centre of these schemes and there is little sympathy in my household if “investors” lose their shirt.

    Strange how a qualified investment adviser regulated by the FSA has a hiuge number of hoops to jump through simply to justify a £4k Mini Stocks and Shares ISA to a member of the public compared with property “investment” which can run to millions and isnt even regulated !

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