bigfoot12
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Post by bigfoot12 on Apr 4, 2015 16:30:34 GMT
How much were they raising? Normally the amount they raise is much higher than the purchase price as they have to refurbish the place. Not sure if that is the situation here. Also some of their fees are taken up front. EDIT: Please note that this was a reply to a post which seems to have been removed. The poster has also changed name to lightshiner
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Post by uncletone on Apr 4, 2015 22:26:03 GMT
As well as refurbishment there are all the legal costs involved. The sum they state they need to raise has to cover the entire project, not just the price tag on the property.
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Post by lightshiner on Apr 5, 2015 7:07:25 GMT
Hi all
No this house needed very little done and the photos they were showing of it were actually the photos from rightmove. In other words they seed to be banking a collosal profit. As far as I could see they were doing very little if anything. They would of had legals etc... But nothing that could justify charging anywhere near the 50-60k it appear they added on.
My main worry would be that I bought a property worth circa £150k and paid £210k. We run it for a few years let's say 5 and after that it needs refurbished needing say £20,000 spent on it. If the market has stayed static or sank like it has over the last 5 years then I could be facing large losses. Obviously there are other costs through selling it etc..
They see to selling a lot of deals but I guess until any are sold no one knows where they stand.
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Post by lightshiner on Apr 5, 2015 9:50:04 GMT
As an example I just searched for one of the newer listings and found investment number 126 is listed for £125,000 so they may of bought it for £110-£115,000 and it already has the tenants in. They have listed it for £145,000 so on the face of it they appear to have one company buying them and then selling them at a massive profit to another company. Unfortunately for investors it appears the company that has banked the massive profit and made off with investors money is a separate company, is this correct?
I have only read so much but do they have another arm of the business that sells the deals? I am interested to see what investors think about this as I would be quite worried if this had happened to me. Or am I missing something???
www.rightmove.co.uk/property-for-sale/property-48341578.html
that's the link if it works to the latest one I found. Even more worrying is that it says the closest property sold near by was sold for £89,000! If the link doesn't work just search 4 bed houses in Warrington for £120-£130k and include sold subject to contract
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bigfoot12
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Post by bigfoot12 on Apr 5, 2015 11:53:01 GMT
As an example I just searched for one of the newer listings and found investment number 126 is listed for £125,000 so they may of bought it for £110-£115,000 and it already has the tenants in. They have listed it for £145,000 so on the face of it they appear to have one company buying them and then selling them at a massive profit to another company. Unfortunately for investors it appears the company that has banked the massive profit and made off with investors money is a separate company, is this correct?
I have only read so much but do they have another arm of the business that sells the deals? I am interested to see what investors think about this as I would be quite worried if this had happened to me. Or am I missing something???
www.rightmove.co.uk/property-for-sale/property-48341578.html
that's the link if it works to the latest one I found. Even more worrying is that it says the closest property sold near by was sold for £89,000! If the link doesn't work just search 4 bed houses in Warrington for £120-£130k and include sold subject to contract I have had a look and I think that you have missed something. The £145k is the total project cost. This will include stamp duty, and legal costs ~£2.5k, the house crowd fee ~£9k, money to do some maintenance, and a contingency to pay for future repairs and fees. I haven't been involved in a House Crowd HMO but in earlier projects I was involved in they often bought the property cheaper than estimated and we got the benefit (sort of - some capital is still tied up earning nothing within the project earning nothing). I would expect them to try to buy at the best price possible and I would expect the SPV to get that price. Having said that I don't make any new investments with house crowd at the moment. I misunderstood some of the (badly written) details and now I understand them better I don't think that it is that good an investment. See some of my other posts for details For example on project 126 they quote an annual income of 9.9% and a 35.5% capital gain (5*7.1%) as an annual return of 17%, but most people would call this an annual return of 15.1% (still good) However 10% of that 9.9% income is a tax credit which no one told me about at the start, which you may or may not be able to use. And to achieve that return this property has to rise in value more that 86% over 5 years - in the fastest rising 'bubble' bits of London 86% growth took 8 years.
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Post by lightshiner on Apr 5, 2015 13:31:17 GMT
I would only expect a solicitor fee? £500? There would be no stamp duty (as under £125k) and if the property is already let then there will be very little refurbishments. The previous one I looked at they had added even more money on. Are they using one company to sell to themselves? I would be extremely worried if I had placed my money in one of these investments as it looks like you may not get 100% of your money back. Factor in a 20% loss over 5 years and selling fee's possible legal/estate agent fee's and the investment starts to completely unravel.
Is this even legal if they are banking massive fee's off investors without being upfront about it? I looked through some of their paper work but could not find anything about upfront profits. This was what brought me to here to get peoples opinions to see if I had missed something. Has anyone else invested with them?
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bigfoot12
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Post by bigfoot12 on Apr 5, 2015 14:15:53 GMT
I would only expect a solicitor fee? £500?
It is very important to read all the documentation at the first time to invest. It is very dangerous to assume (as I did to my cost). This is the purchase of a House in Multiple Occupation. It isn't surprising that the legal fees are higher than the purchase of a regular residential house. There are surveying fees as well. The company you are investing in is set up just to buy this house. The costs of setting up this company are included in the £2,500 estimate. There might be insurance costs too. if the property is already let then there will be very little refurbishments
The documentation is reasonably clear on this (I am somewhat surprised, they seem to be getting better). They are going to improve the property over the first 12 months and then increase the rents as leases come up for renewal. ...is this even legal if they are banking massive fee's off investors without being upfront about it?
I don't think they are banking a massive fee. They do take 5% + VAT up front which is clear in the documentation. I won't be investing, but in a few months we can look at the land registry and I image that the purchaser will be the SPV and the price will look fair. I do agree that the price increase needed to produce a capital gain is too high for me, but if they actually achieve a running yield of about 10% that might suit some people.
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Post by lightshiner on Apr 5, 2015 16:00:27 GMT
The property would still be on one title so I imagine £500 solicitor fee about right. I usually pay £16.99 to set up a limited company, again this is about average. A survey would be about £100-£150. 5% of purchase price if they bought for £110,000 would be £5500. Lets say £6700 and purchase price of £110,000 which I think is generous considering the last sale on the Street was £89,000.
As far as I can see this property is completely refurbished recently as in 2012 I found a letting listing - www.onthemarket.com/details/883231/
On right move I can see the last sale on Green Street in Warrington was for £37,500 in 2010 - This would really worry me. £74,000 on Leicester Street (2014), £78,000 on Lovely Lane (2015) both streets that connect to Green St and the nearest sales. Add to this that you are connected to a commercial premises and just a few doors down the road from a pub I would be committing financial suicide if I had bought this property for £145,000.
Is it them selling it on rightmove also? as it seems very highly priced and in an extremely poor location. I am surprised judging near by selling prices that this property is worth even over £100,000 as most properties seem to be selling for £60,000-£70,000. If you type the postcode (WA5 1TW) in to the find sold prices in rightmove this lets you see. There are some near by flats but they may be new build, the terrace prices (which this is) seem much cheaper.
Has anyone invested in any of these projects?? Obviously if you are buying an asset for £145,000 and it can only be sold for say £75,000 then your going to need a hell of a lot of rent to justify that purchase.
www.rightmove.co.uk/house-prices/detailMatching.html?prop=29153052&sale=51898871&country=England
This is 90 Leicester St which sold for £74,000 in 2014 and looks mint, this could be a 4 bed HMO as it has an extra down stairs room which could be let out and it is in a better location than the one they are listing at £145,000. I really do not want to say too much because this looks very worrying to me, the fact they have taken £10million off people in these kinds of deals.................... I have a decent amount of knowledge in property so was very interested but I am now wondering if I am missing something??? Pleased to hear your responses? everyone else seems a bit quiet
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Post by lightshiner on Apr 5, 2015 16:22:46 GMT
Just also found this when searching for one of the directors on company check - He has been involved with a massive amount of dissolved companies. THE WARNING BELLS ARE REALLY RINGING NOW!
CHARLES FRAZER INVESTMENTS LIMITED Company is dissolved Director 02/05/2006 - Yes BUY NOW CHARLES FRAZER INVESTMENTS LIMITED Company is dissolved Company Secretary 07/11/2006 07/02/2007 Yes BUY NOW BLUE SILVER MANAGEMENT LIMITED Company is dissolved Director 17/12/1999 - Yes BUY NOW INVESTOR NETWORK LIMITED Company is dissolved Director 28/10/2008 30/01/2010 Yes BUY NOW MILLENNIUM CUP FOOTBALL LIMITED Company is dissolved Director 26/11/1998 13/09/1999 Yes BUY NOW SEDGEFORD ROAD LIMITED Company is dissolved Director 01/02/1999 - Yes BUY NOW BLUESILVER VODKA LIMITED Company is dissolved Director 14/08/2000 12/11/2001 Yes BUY NOW BLUESILVER CATERING LIMITED Company is dissolved Company Secretary 14/08/2000 - Yes BUY NOW BLUESILVER CATERING LIMITED Company is dissolved Director 14/08/2000 - Yes BUY NOW SPIRIT EVENT PARTNERSHIP LIMITED Company is dissolved Company Secretary 01/10/1999 - Yes BUY NOW BLUESILVER VODKA LIMITED Company is dissolved Company Secretary 14/08/2000 12/11/2001 Yes BUY NOW SPIRIT EVENT PARTNERSHIP LIMITED Company is dissolved Director 01/10/1999 - Yes BUY NOW CHARLES FRAZER LTD. Company is dissolved Director 11/07/2002 - Yes BUY NOW MILLENNIUM CUP FOOTBALL LIMITED Company is dissolved Company Secretary 26/11/1998 13/09/1999 Yes BUY NOW BLUESILVER PROPERTY LIMITED Company is dissolved Director 23/12/2010 - Yes BUY NOW THE HOUSE CROWD LIMITED Active - Accounts Filed Director 01/03/2012 - - BUY NOW BLUE SILVER PROPERTY LIMITED Active - Accounts Filed Director 28/02/2008 - - BUY NOW QVID LIMITED Company is dissolved Director 30/09/2011 05/01/2012 Yes BUY NOW BRAEMAR ESTATES MORTGAGES & FINANCE LIMITED Non trading Director 31/05/2007 31/01/2008 -
Read more at: companycheck.co.uk/director/906646724
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mikeb
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Post by mikeb on Apr 5, 2015 20:54:05 GMT
Just also found this when searching for one of the directors on company check - He has been involved with a massive amount of dissolved companies. THE WARNING BELLS ARE REALLY RINGING NOW!
CHARLES FRAZER INVESTMENTS LIMITED Company is dissolved Director 02/05/2006 - Yes BUY NOW CHARLES FRAZER INVESTMENTS LIMITED Company is dissolved Company Secretary 07/11/2006 07/02/2007 Yes BUY NOW BLUE SILVER MANAGEMENT LIMITED Company is dissolved Director 17/12/1999 - Yes BUY NOW INVESTOR NETWORK LIMITED Company is dissolved Director 28/10/2008 30/01/2010 Yes BUY NOW MILLENNIUM CUP FOOTBALL LIMITED Company is dissolved Director 26/11/1998 13/09/1999 Yes BUY NOW SEDGEFORD ROAD LIMITED Company is dissolved Director 01/02/1999 - Yes BUY NOW BLUESILVER VODKA LIMITED Company is dissolved Director 14/08/2000 12/11/2001 Yes BUY NOW BLUESILVER CATERING LIMITED Company is dissolved Company Secretary 14/08/2000 - Yes BUY NOW BLUESILVER CATERING LIMITED Company is dissolved Director 14/08/2000 - Yes BUY NOW SPIRIT EVENT PARTNERSHIP LIMITED Company is dissolved Company Secretary 01/10/1999 - Yes BUY NOW BLUESILVER VODKA LIMITED Company is dissolved Company Secretary 14/08/2000 12/11/2001 Yes BUY NOW SPIRIT EVENT PARTNERSHIP LIMITED Company is dissolved Director 01/10/1999 - Yes BUY NOW CHARLES FRAZER LTD. Company is dissolved Director 11/07/2002 - Yes BUY NOW MILLENNIUM CUP FOOTBALL LIMITED Company is dissolved Company Secretary 26/11/1998 13/09/1999 Yes BUY NOW BLUESILVER PROPERTY LIMITED Company is dissolved Director 23/12/2010 - Yes BUY NOW THE HOUSE CROWD LIMITED Active - Accounts Filed Director 01/03/2012 - - BUY NOW BLUE SILVER PROPERTY LIMITED Active - Accounts Filed Director 28/02/2008 - - BUY NOW QVID LIMITED Company is dissolved Director 30/09/2011 05/01/2012 Yes BUY NOW BRAEMAR ESTATES MORTGAGES & FINANCE LIMITED Non trading Director 31/05/2007 31/01/2008 -
Read more at: companycheck.co.uk/director/906646724 You do realise that as and when the various HCP projects come to an end, and get sold on, he will have tens more dissolved companies to his name -- in fact I'm surprised there aren't some there from the earlier projects? I'm sure frazerf can explain why all those other companies no longer exist. But maybe the alarm bells should be ringing if they all said "struck off", or "bankrupt" or "liquidated". They don't. I've got a "dissolved" ltd company behind me, I hope no-one minds On the house prices being inflated -- the funds raised (as explained elsewhere) are to cover buying the property and everything else. Surveys, legals, up front money to THC to re-market the property, building work, contingency fund to cover rent voids etc. etc. and it is covered in the paperwork. Once the house is bought, if you were an investor, you would received a copy of the Land Registry showing the new owner as "House Crowd Project nnn", and showing the price paid. There's lots of paperwork.
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Post by lightshiner on Apr 6, 2015 8:12:39 GMT
Hi Mike
Please be aware it shows his active companies, he is only involved in the house crowd. The HCP projects are not in his name. I also have dissolved companies as most business people do............the difference being is about 10% of my companies are dissolved for good reasons. Someone who has 80-90% of their companies dissolved is an obvious warning. I would also be worrying about what exactly the extra £50,000 added on is actually for and how much money THC are making from these deals, I am going to research another project shortly that someone has sent me details of.
I am not aware of any properties being sold. Another worry I am thinking about is do they own stakes in these projects themselves? I think this is very important as if they have voting rights over there own properties then they can stop you selling them. An internet guy I spoke to said some peer to peer companies buy shares themselves to make it look like they are selling out fast, this would not normally be an issue but since you can only sell or get your money back if 51% of people vote I think this question is pivotal.
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Post by lightshiner on Apr 6, 2015 8:44:42 GMT
Hi Again
I have been looking in to an earlier deal on Lovely Lane in Warrington and seeing what local houses are selling for. The closest match I can find which is very close is that in December 2010 125 Lovely Lane sold for £145,000 - www.rightmove.co.uk/house-prices/detailMatching.html?prop=29586183&sale=45097016&country=England
This is a similar sized property but in very very good condition and represents one of the highest priced terraced houses sold on this Street in recent history. There are 2 other terraces sold more recently in Feb 2015 and August 2014, they were both 3 bedrooms so could possibly be 4 bed HMO properties and there selling prices were £74,000 and £78,000, these are the most recent sales.
Number 100 Lovely lane did sell for £205,000 but this is a completely different type/style of property (semi with large garden site) and probably not a good comparable to a terraced house. You should also note it had dropped from £240k in May 2011 to £205k in December 2013. Perhaps the closest comparable above should also be reduced as this was sold in 2010? I would be extremely worried if I was buying properties and paying £210,000 for them when most other properties seem to be selling for 50% of that value in the area. I normally look to buy properties where the average selling price on the Street is say £100,000 and I am buying at say £60,000 and need to spend £10,000.
Did anyone do any research at all before buying with THC? I am quite perplexed as looking at some of these deals it would seem people have been paying very high prices, add to this fee's to sell and it may be very difficult to get your money back without very significant capital growth.
Mike also be aware if a company is liquidated it can show as being dissolved. I would investigate further if I had money invested but from what I have seen I think this ones probably not one for me. Am still interested to know though whether people are happy with these fee's?
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shimself
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Post by shimself on Apr 6, 2015 23:58:58 GMT
I've just looked through Frazer's list of directorships; it's true that there are a lot of dissolved companies (which look like ventures which didn't fly), but only one has "possible adverse information" which I take to indicate some bills which weren't paid when the company wound up. So it seems to me that all the others were wound up honourably. The one that ended badly, he was only around for the last three months, whereas another director who was there from the start 3 years before does have a trail of "adverse information". So my reading of that history is that Frazer is an honourable man, and persistent.
I should add I own a low 4figure sum of THC shares from when they made a small offering to customers a year ago
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Post by frazerf on Apr 7, 2015 7:34:39 GMT
Hi All
I am wondering if any members of the house crowd realise that the prices are being inflated? I looked at the recent multi let in Warrington they had listed for £210,000 but it was still coming up as listed on rightmove for circa £165,000. If they got a good deal they may of purchased it for £150,000. This has put me off dealing with them as it is obviously going to be hard to make any capital gain at all. I can not find anywhere on the site that they explain these huge fee's they are whacking on the properties and wondered if anyone who is already investing can shed any light on this? I am not able to rely to all comments made in this thread as I do have a business to run. So will deal with just this original comment about "inflated prices" You have made quite a few assumptions in your statement that are not at all correct (such as the price we bought it for which was actually £160,000 not £150,000) By way of explanation, there is a vast difference between the costs of creating (and furnishing) an HMO and a standard refurb on an ordinary house. Quite simply you are not comparing like for like. We also (unlike many landlords do the job properly putting in damp proof courses etc where many would not) With regard to the house you refer to it has quite serious damp issues and problems with the roof. This is a list of works that are actually being carried out at present: Overhaul central heating system with new boiler. Repair roof, gutters, flashings. Ridge tiles and chimney repairs Cap and vent chimneys. Install Damp Proof course Patch pointing Internal plastering General building Refurbish windows Paint and carpet. Overhaul the bathroom. New internal doors The property will also need to be fully furnished to a good standard to attract quality tenants. In total a budget of £36,500. Total cost of £198,500 plus around £2,500 for legal fees insurance and survey costs We raised £210,000 for that property and it will provide investors with a very good return. If you think the profit element in that after all the work we do is excessive then I am afraid I must disagree. I think its entirely reasonable. As far as the value of the house goes I readily admit that as a standard family house it will not make any capital gain and may not even be worth £210,000 in 5 years time. But we state categorically that it is our intention to sell it to an investor at an 8% net yield. That is a small market but a strong one - there are many investors out there who would happily buy a property that produces an 8% net yield - that is why we believe it will make a decent profit on sale, whilst providing a very good return during the period of ownership. For me, if I was looking to invest with a property crowd funding company, I think I would be concerned about what returns I was getting rather than worrying about what profit the platform was making. In this case an estimated 10.3% return on investment in rental income alone. I have yet to find another platform that offers investors returns anywhere near as good as ours... Or indeed has a 3 year track record of paying every dividend on time in full. But if you would prefer to invest with a company that pays you less on the basis that it also makes less profit, I guess that is your prerogative.
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Post by frazerf on Apr 7, 2015 7:41:25 GMT
I've just looked through Frazer's list of directorships; it's true that there are a lot of dissolved companies (which look like ventures which didn't fly), but only one has "possible adverse information" which I take to indicate some bills which weren't paid when the company wound up. So it seems to me that all the others were wound up honourably. The one that ended badly, he was only around for the last three months, whereas another director who was there from the start 3 years before does have a trail of "adverse information". So my reading of that history is that Frazer is an honourable man, and persistent. What can I say? I have worked for myself since leaving the law in 2000 and (you are right) have had lots of ideas for companies many of which do not really get off the ground or in some cases fallen out with business partners and have dissolved them. Some of them I sold. I do not know which company you are referring to but I am not aware of any of them owing anybody any money. Anyway thank you for your comments - I would certainly hope that is how people see me.
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