Wednesday, July 6, 2011
Bleating BTLers
Buy-to-let victims of Inside Track plan joint legal challenge for mis-sold homes
Almost 1,000 investors in failed property firms Inside Track Seminars and Instant Access Properties are on the verge of launching a classaction lawsuit, alleging that the company mis-sold buy-to-let flats and houses. Former vet Tamsin Barks, 51 claims to have lost £400,000 after buying seven homes in Manchester, Spain and Florida.
Posted by little professor @ 01:06 AM (1913 views)
8 thoughts on “Bleating BTLers”
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general congreve says:
Caveat Emptor. Suck it up.
general congreve says:
Earlier this month Barks held a secret meeting at a Heathrow hotel with more than 200 victims of Inside Track, which was set up in 2002 claiming it could help armchair investors become financially free within ‘three to five years’ by buying flats and houses through sister company Instant Access Properties.
If it sounds too good to be true…
In 2008, however, both firms collapsed owing millions of pounds, blaming the credit crunch and global property crash.
Exactly what are they hoping to get out of this, cos it certainly isn’t going to be compensation.
little professor says:
Some sad stories from fellow ‘victims’ on Tamsin’s class action website:
“We thought we would spread the risk by buying in UK, Spain and Florida! What a mess we are in now as we are just starting our retirement with 4 mortgages to finance.”
“We have 3 properties purchased through IAP — 2 in UK, 1 in Spain. I believe now that in all instances their claimed rental and discount prices were highly dubious, if not fictitious or false.”
“I have six other UK investments and one failed Spanish investment procured via IAP… As far as the six UK (all in England) investments are concerned, two of them are not capable of producing rental income streams sufficient to cover the mortgages. The other four are rentable at more than the mortgages but that would not be the case once the bank base rate begins to rise. All six are currently valued below the discounted price paid via IAP and hence and some are even valued below the mortgaed sum (ie are in negative equity territory).”
“I was suckered in with their lies, due diligence was a term they used to gain our trust. I bought two properties in the UK from them, they are both cash flow negative and worth less now, than their so called discount price; on top of their membership fee’s to pay for their due diligence, what a scam!”
“We paid well over the odds and had no chance of getting the rent suggested by Inside Track. The flat is of course in negative equity and it is only because of the low mortgage rates that we can just cover the payments. They lied about the value, rents and description.”
“My wife and I were conned into taking equity out of our home to investing in a property portfolio in order to enhance our megar penions… We are now struggling to pay three mortages in which we have no equity and can only try to hang on in the hope that the property market will recover.”
“It has left me with some debts and neg equity on some flats but this year I actually made a profit for the first time thanks to low interest rates, but if/when rates go up it will be a different situation.”
And a longer cautionary tale to end with:
“Our first UK purchase was purchased in 2004 at a ‘discounted price’ of £153K at the Castlefield Locks development close to Manchester city centre.The alleged discount was £30K. 2 years down the line when it became apparent the wheels were falling off our whole property investment business we initiated attempts to sell the property and recuperate our unsustainable financial losses. To the best of our knowledge at the time we had at least £60K equity in the property notwithstanding the implied rise in capital property values at that time (way way before the starty of the credit crunch in 2007. In reality we only ever received a spurious mischievous offer of £130K.
Our second UK property, in Brighouse W Yorkshire, WAS identified by Inside Track for £125K (alleged discount £17K)and purchased in early 2005. On attempting to market this property in late 2006 we were advised by local estate agents that e realistic and achievable selling price would be around £105K!
The Bahama Bay situation paled the UK purchases into complete insignificance. This was an Inside Track production from start to finish. It was purchased at a ‘discounted’ price of $196K (‘full’ price $205K) completion in early 2006. Inside Track assured us we could expect a monthly income of in excess of $2000 based on 80% occupancy. This turned out to be utter nonsense as we found ourselves constantly feeding funds to support it. It transpired 2 years later that it was absolutely unsellable at $132K (mortgage $142K). Eventually after persistent and insistent pressure from the U.S. lender we were permitted to ‘short sell’ the property for around $105K. The net loss on this particular venture was around £60K sterling.
The combination of the 3 investments lead to an accumulated and unsustainable personal debt of £125K by October 2008 necessitating inevitable personal bankruptcy. Bearing in mind in mid-2003 I had a 6-figure personal current account and a 4-bed detached property with equity in excess of £150K and now live in a 3-bed rented semi, one could say I would find it somewhat difficult to recommend Inside Track and its subsequent incarnations to a prospective investor!”
little professor says:
Reading through the stories, there seem to be two types of victims.
The first was simply gullible, naively believing in inflated valuations and rental projection figures given to them by Inside Track without bothering to do any local research on the property the were handing over hundreds of thousands of pounds for. No sympathy, they were just greedy and stupid.
The second I do actually feel sorry for – alleged victims of criminal wrongdoing – deposit money being stolen, when it was claimed it was in escrow money taken for developments that were never going to be completed, bakchanders being paid from developers to Inside Track/IAP to serve up more punters for their schemes.
Europeanbear says:
A fool and his money are easily parted. Did anyone think to take a quick web search of the local real estate marked (sales and rentals). Calculate the gross yields based on rent to sales prices and anything less than 6-7 % gross yield would reveal the scam that it is. The vet who was fooled would have obtained multiple A grades at A level before going to one of the UKs better Universities and completing one of the toughest courses. And at 51 she would be old enough to remember previous property crashes which should have given her caution.
uncle tom says:
I would be amazed if the people being sued had not already placed all of their ill-gotten wealth out of reach.
The only winners will be the lawyers, and the muppet investors will end up even deeper in the red..
mark says:
their own greed turned into stupidity
sovietuk says:
As one of the bank of England bods said a while back “house prices are only a matter of opinion, debt is very real”