womeninpropertyinvestment

Passive Investments Still At It - Unbelievable!

Since my blog posting about the dire service I've received from Passive Investments (i.e. CCJ!!) I've received various calls from more extremely unhappy Passive clients.

Some of these people have already been taking steps to investigate what's going on with Passive after being concerned over their own poor experiences so even more information has come to light.

Whilst some people contracted for a portfolio build with them, others invested money with a promise from Passive to pay a monthly fee for the use of that money for an agreed period of time. After the time was up, Passive were meant to repay the lump sum but guess what... they claim they can't repay the lump sums.  Of course, they're citing market conditions as the reason, but I think it's purely bad management.  After all, they've known when the funds were due back, they set the timescale in the first place, and they should have been prepared for any eventuality.

Even worse, they've now stopped paying the agreed monthly sums, even though they've still got people's money!  So anyone who is relying on that money for income, pension, etc. now no longer has that monthly sum. No warning, no argument, just stopped. And yet Greg is so fond of pointing out to people that they have signed a contract with a non-refundable fee.  It seems he's not quite so fussy when the contract works the other way!

So what have they done with all that money that went into Passive Investments? Money that was paid to them to build and manage portfolios for people over a 6 year period? And money that was invested with them as cash, which I would have expected them to invest for a great return, using all their "expert" knowledge, but if they did, where are the assets they've bought?  And if they didn't, where is the cash? Coupled with the portfolio build funds, that's a lot of dosh.

One Passive Investments' client I spoke with yesterday said he suspected it might be in Cyprus and mentioned that a large sum of money had been taken out of the company quite recently. One of Passive's directors, Andy Shaw, moved his family out to Cyprus last year and I understand he's now selling properties out there and advising people not to pay the Cypriot stamp duty (equivalent) immediately, which is terrible advice regarding the exposure of people's investments.

I wonder whether Greg Ballard will eventually join Andy Shaw in Cyprus?  Both directors remortgaged their homes at the end of last year and this, along with other snippets such as the company accounts being well overdue with Companies House, the phone frequently not being answered at Passive's offices, the lack of staff they now have, the failure to repay funds owing and at least one judgement already against them, smacks of preparation for some kind of get-out.

Meantime, I'm told they actually had the audacity to hold one of their "Open Days" in April to try and get more people involved. I wasn't aware of this and find it difficult to believe, so if you were there, let me know!

Finally, Wininvesting have got Greg Ballard speaking at one or more of their forthcoming weekend events. This brings Darren Winters and Wininvesting down several pegs in my eyes.  The good news is that it only costs £7 to attend so perhaps it's a great opportunity for some disgruntled Passive Investments' clients to actually get to air their views to Greg since they seem to be ignored otherwise.  Greg's being billed as an "expert" at the Wininvest events.  Quite what he's an expert in remains to be seen. Could he turn out to be an "expert" escape artist?

Passive Investments - Greg Ballard & Andy Shaw

Lots of people who invested with Passive Investments have asked me to repost the blog I removed last year as it brought so much response from other unhappy clients, so I'm pleased to do so...

As you know, I've been investing myself since 1990 (yes, not just through the growth years, like some people who call themselves "expert" - I started when prices were high and they suddenly dropped, which could explain why I'm absolutely NOT in any state of panic about the current market). So when I spoke for a couple of companies who offered to provide a full service for potential investors (and invested in these myself - remember, my rule is that I never speak for anything I don't invest in myself) people asked why I needed help.

It's a valid question and the answer was always because, with property, you can leverage both money AND time AND knowledge. Unfortunately, if you leverage other people too far, you lose control.

Many of you will know that I used to speak for Andy Shaw & Greg Ballard (Passive Investments) and I also became an investor with them. The idea was that those who didn't have the time, but had the money and the desire to invest in property, would be able to pay Passive to "do it all for them". In practice, it's turned out horribly wrong for me, and not exactly as expected by many others.

When someone has too much control through having 6 years' management funds up front AND full control over the bank account, the danger is that they drop the ball and you (whose name everything is in) end up suffering the consequences. Because they've got your money up front (on a NON-REFUNDABLE basis - as Greg likes to point out after he's got the money), they've also got you over a barrell.

In my own case, and the case of others, the first red flags were when the bank account went overdrawn, and the first we knew of it was receiving a letter from Barclays!

The second red flag came when it took over a week for anyone at Passive to act on the urgent fax I sent through regarding this, and the third red flag came in the form of them managing to get a CCJ attached to me due to another oversight (denied by Greg Ballard, but since verified with the managing agents!).

And don't forget, you're now paying this company the best part of £40K - UP FRONT - to do all this for you PLUS a back-end fee of around £20K on EACH PROPERTY!!

You can read more about the whole sorry saga on my book reviews page at:

http://www.womeninpropertyinvestment.com/bookreviews.html

where you'll receive a warning about how buying Andy's book, which, incidentally, takes about 300 pages to say the same thing that I say in just one of the myths I write about in the chapter of my co-authored book "The Advantages of Real Estate") can get you entangled into their scheme, if you're not aware.

So that's my response to the people who ask me what I think of Andy, Greg & Passive - NOT MUCH!!

Nice idea but do you really, really need to pay all that money and leave yourself so exposed?

By the way, it wasn't so much when I was speaking for them, but they increased it over time.

The question I'd like to ask is where have all these funds gone?  They took so much up front from their clients and this was meant to be in order to manage their portfolio for 6 full years.  Now, only 1-3 years on for clients, Andy has moved to Cyprus, Passive have at least one judgement against them already, there is a skeleton staff at their offices and Greg is pleading poverty when it comes to returning money due to clients.  Even their acquisitions manager left, stating, in writing, "I left the company as I no longer had the confidence in their abilities to provide the service their clients paid for."  Wow, that's from an insider.

I've been contacted by various clients who have had problems ranging from the usual lack of communication through to Passive's inability to return large sums of money under the terms of agreements they had whereby Passive paid a return on money deposited with them.  Where's it all gone?

In addition, many clients are now left with all their funds tied up in properties that they cannot remortgage (showing how important it is for a company to have a strategy that doesn't just work in a rising market - any fool can operate in a market like that!) and some have more than one property that isn't even let.  So much for Passive's assertion that they held more sway over letting agents than an individual owner.

I do wonder whether Passive, Greg and Andy will be around for much longer.  They have a string of past business closures behind them, Passive Investments Ltd company accounts are late and for a couple of supposed "property millionaires", you may be surprised what a personal search on the individuals will throw up. 

My legal action could be the final nail in the coffin, but I reckon they're already hammering away themselves.

A Little Light Relief

During our busy days we all need to take a little time out, don't we?  Some people choose to play a computer game for 5 minutes, others take a break by the coffee machine, if you work at home you might just have a change of pace from business to domestic (hanging the washing, or something equally mundane BUT still falling under the banner of work).

I used to log onto the website of Peterborough Today and read The Sofa Diaries, a weekly column written by my good, gorgeous, witty friend, Penny Young, but the newspaper recently made the awful decision to axe the column when redesigning the publication - MADNESS!

The only thing that pulled me back out of the depths of depression into which I was spiralling after hearing this news was being informed that Penny has now transferred her column to a dedicated blog where there's no longer a restriction on her only being able to write weekly.

I thought you might like it if I shared the link so you can enjoy it too, and the more people who read and give feedback, the more Penny will be encouraged to spill the beans about what Mr Young gets up to in his potting shed.

Give it a try, bookmark it and enjoy.

http://www.sofadiaries.co.uk/

My Comments on the Credit Crunch

Greetings from rainy Nashville, Tennessee (y'all).

I'm over here for a few days attending a seminar on speaking and marketing. Yes, I know I do this all the time but we never stop learning, do we?  And because this is CPD (continuing professional development) in my field, the entire trip is a legitimate business expense.  This is one of the reasons everyone should have a business of some kind as there is so much you can put through and pay with pre-tax money rather than after-tax money, but I digress.

I've been asked to comment about the current so-called credit crunch and what it means to the housing market.  Obviously, it's something I've addressed in my talks but I know that not all of you get to see me speak so let me give you some thoughts right now.

Whatever happens, banks must still lend money because that's what they do. If they are unable to do this, they will go out of business.  The problem is, where do these banks get the money to lend?  Well some of them (Northern Rock) get the money from their depositors. They pay interest to their depositors at a certain rate and lend the money as mortgages at a higher rate and pocket the difference (in very basic terms). 

You would be doing the same thing if you borrowed money at 0% on a credit card for 9 months, put it in a bank account guaranteeing you 6% interest and repaid it before the end of the 9 month interest-free period.  You would have made 6% (less a small balance transfer fee) from one bank using another bank's money. You're probably not going to get rich this way but it's free money, isn't it?

What happened with Northern Rock was that they needed more money than they had from depositors in order to fulfill their mortgage obligations. At the same time, the money lenders they would traditionally have gone to were constrained by having had to start writing off debts lent to sub prime (poor credit risk/defaulters) borrowers in the US market, so the money was either not available or was offered at too high an interest rate for Northern Rock, so they went to the Bank of England for a loan. No real problem with that.

Unfortunately, the newspapers got hold of it and, in my opinion, blew the whole thing up out of all
proportion so we had people queueing to withdraw their funds from Northern Rock. So then they needed even more money from the Bank of England and ended up in their current situation.

And, of course, these people who withdrew their money have had to put it somewhere, or take it out of circulation altogether and shove it under the mattress, which means even less money slopping around for the banks to use.

This is a very simplified version, of course.

From my research, here's what I believe will be the effect of all this on us as property investors:

Because the banks have access to less money to lend, they must make the right decisions about where
to lend it.  When I apply for mortgages now there's a lot of emphasis being put on the questions about my existing portfolio and years of experience in the business.  The banks are willing to lend to
EXPERIENCED investors with good cash flow management.This will make it more difficult for beginners and people who don't show such good management (which, of course, shows up as missed payments in their credit report).

ACTION:  If you haven't already done so, I suggest you get copies of your credit reports from Experian
&/or Equifax and go through them with a fine toothcomb to ensure they are all correct.  Look through
the eyes of a lender. Would YOU lend money to you?

Visit www.creditexpert.co.uk and you'll get access to your Experian credit report for 30 days for free.
I actually pay the £5.99 a month to keep tabs on my credit report as it's the most valuable thing a
property investor can have - a good, clean one, that is.

Also visit www.equifax.co.uk, and do the same.

Make sure you set up direct debits for all credit cards to at least make the minimum payments so you
never miss one.  You can always pay extra.  In fact, if you can afford to pay double the minimum each
month, the credit card companies are more likely to increase your limit as you're showing them you
can afford to pay more.

Always accept a credit limit increase because one of the things that improves your credit rating is
the ratio between your borrowing and you available credit.  It's the usual thing, if they think you
don' NEED the money, it will be offered more freely than if they think you need it.

Now the people who will find things very difficult will be those people who have not protected their
credit.  Anyone with missed payments or judgements against them coming to the end of their fixed rate
and applying for a remortgage will find the rate they're offered will be much higher, if they can
get a mortgage at all due to the risk they represent. This WILL result in people being unable to afford
the higher mortgage payments and an increase in repossessions on the market.

This is where a challenge for one person becomes an opportunity for another.  Also, remember that
these people still need to live somewhere so they will have to rent.  Many will have to sell quickly
as the mortgage arrears start to mount up and if you're in a position to act, you will be able to
buy below market value. You can help them out by saving them from repossession and even renting
their property back to them, with many, many variations on this that you can consider when
you know how and think creatively.

There will also be people who get jittery because the newspapers are bombarding them with dire
warnings of a crash, so they decide to sell up and rent (in other words, gamble with their own home),
which increases the pool of tenants for us landlords. People who really want to do this will believe that the market is slowing and will think they're going to have to accept lower offers - again, great for us investors.

It's interesting that all the big property investors I know are gearing up to buy like crazy for the next
6-8 months, and I think that's how big the window of opportunity is going to be.  I suspect in 8-12
months, things will be back to normal, so DON'T WAIT.  GET GOING RIGHT NOW if you're serious about
taking advantage of opportunities in the market, I certainly am.

Another interesting thing is that whilst I've been here in the US I've been discussing property/real
estate with other course attendees who are US citizens and residents. Many of them have said things
like "well I've been hearing that at least things here in the US are not as bad as they are for you
guys in the UK".  Which surprised me no end because in our UK news reports the implication is that at
least things in the UK are not as bad as they are in the US as the UK banks do not have the same exposure to sub prime lending as the US banks.

Many of you will already know my opinions on newspapers anyway - they are written to sell papers, not
to help you make financial decisions about your life.

So make sure that through all this you learn as much as you can (but only from people who really understand what they're talking about), guard & improve your credit rating, don't allow fear to creep into your decision-making and see the opportunities that others will not see.

Even the Professionals can learn... Part II

So as well as Mr "OK, Show Me What You Know", at one of my talks last week a chap approached after I finished my two hour talk to ask was it really true that a CGT (capital gains tax) liability dies with you.

Now I'm not in the habit of stating things as fact unless I know something to be true so I assured him that it was indeed the case.  His response was that this was something he had not known before seeing me speak and he told me it would make a big difference to him AND to his clients.  Which clients?  Well, those who come to him for financial advice... Yes, he's an IFA.

Now when I provide coaching and mentoring, I often find my clients telling me that what I'm saying conflicts with the advice they've been given by their IFA, accountant or bank manager.  This comes as no great surprise because all these people are either spouting conventional "wisdom" (in other words, the "wisdom" I argue against in my "Myths & Misconceptions of Real Estate" chapter in my co-written book) or they are selling other investment opportunities on which they'll earn a commission.

By contrast, when I'm coaching, mentoring or speaking about property, I'm giving the benefit of my many years of experience in property with the sole aim of getting my client to where she wants to go.

The moral of this tale?  Only deal with professionals who really know what they're talking about, learn from people who've already achieved what you want to achieve and remember that if you ask a man with a lorry load of red paint what colour you should paint your living room, the answer is likely to be RED!!

No Property Connection (just a wicked cat funny)

I make no apologies for breaking from property for a moment to share something that makes me laugh every time I watch it.  Anyone who is owned by, or has ever been owned by a cat will appreciate this:

Wake up cat

Comments welcome

Even the Professionals can learn... Part I

So last week I was speaking on behalf of Robert Kiyosaki in Liverpool, Manchester and Chester.

Mostly, the seminars went extremely well, but there's often one bad apple in the bunch and mine happened to be sitting at the back, arms tightly folded, wife beside him at the lunchtime session in Chester.

Throughout my talk, this guy remained steadfastly tight-lipped, his only reactions being the odd - almost imperceptible - incredulous head shake, as if he couldn't quite believe some of what he was hearing.

So what was I saying that was so controversial...

Well I was talking about how I structure deals so I don't have to put my own money in, how to raise money for investment, how wealthy people think differently to the majority, and generally having a bit of a laugh and joke with the rest of the audience (as I like to do).

Finally, this chap could contain himself no longer when I informed the audience that money released in a remortgage is not taxed until (and if) the property is sold, he absolutely insisted I was wrong and that it was classed as income and was, therefore, subject to income tax.  Naturally, I politely informed him that it was not considered income because it was borrowed money, but he would not have it.  It was only when a chap in the front row turned back to him and confirmed the truth of what I was saying that he accepted it.

Now why did this man choose to believe someone he'd never met and whose credentials he did not know over someone who has been investing since 1990, has co-authored a book ("The Advantages of Real Estate"), writes a monthly column in a major property magazine (A Place In The Sun), speaks on and trains and mentors in property investment?  (The latter is me, by the way :-))?

Was it because he realised he'd been making mistakes all his life and his wife was sitting beside him, knowing he'd been doing it all wrong?

Was it because he really didn't want to be there but his wife had dragged him along and he had to prove to her that it was all a complete waste of time?

Was it because he didn't want a woman telling him what to do and/or he wanted to bring me down a peg or two?

Was it because he was afraid he might be "sold to" so he wanted to convince himself that I wasn't worth buying in to because I didn't know what I was talking about?

Answers on a postcard please....

Gill Fielding - The Secret Millionaire Channel 4

Many of you will have been lucky enough to have been my mentor, Gill Fieliding, on Secret Millionaire last week on Chanell 4.   She gave away £250K ( A Quarter of a million) to what she deemed to be deserving cases. 

The press states "Aged 50 and married with three children, Gill now lives in a large, family home in Sussex . She is worth over 15 million pounds and confesses to spending around £20,000 a month “just on nicknakery”. She even has a pair of shoes to match her car! "  A nice story, but I know Gill as a friend, and I know that the £20K doesn't come from her income, it comes from her property portfolio.

When you have a property protfolio that puts money in your pocket, you can do things like this.   The question is  "how can I get my portfolio to put that kind of money on my pocket?"

I can show you because Gill (& others like Russ Whitney, Robert Kiyosaki, etc. showed me).  Get a copy of my book or visit my website to learn more.

Speaking at Invest in Property Show

Last Friday (13th!), Saturday and Sunday I hauled myself up to London each day to speak at the Invest in Property Show at Earl's Court. Unfortunately for the show, it fell on the hottest weekend of the year so far which meant it wasn't as well attended as it could have been but I was over-the-moon that all three of my talks were packed out. This was especially satisfying since the guy who was on before me on the Sunday (a particularly quiet day at the show) didn't even bother speaking as nobody showed up!

I do enjoy speaking at shows like this for many reasons, which I've listed here because I would urge anyone in business to get out there and get speaking engagements at events that fall into their niche. Here's why I do it:

- it raises my profile and looks great when I can list these events on my promo materials;
- every time I speak, even though I've been doing it for many years, I feel I'm improving my presentation skills;
- I love the appreciation I get from audience members when I share my knowledge;
- you never know who is in the audience and what other business can come from the contacts you make;
- the great questions from the audience make you work and exercise your intelligence muscles (if you want to learn something more deeply, teach someone else);
- it's a great opportunity to actually sell.

On the last item, I've already now booked up 3 property mentorships with me on the back of these talks, so it was certainly worth the train fare and my time getting up to London.

The one downside was that I didn't have my book available to sell. This is a book entitled "The Advantages of Real Estate" to which I've contributed a chapter, along with 10 or 11 other authors. My chapter is entitled "The Myths & Misconceptions of Real Estate".

The book was due out a couple of months ago but it's been severely delayed due to two of the authors being late with their submissions. This is particulary irritating because the whole reason I decided to contribute a chapter was so that I'd have a deadline on which others were relying. That way, I thought it would force me to get it done, as I've found the hardest part of writing is getting motivated if there's no external deadline. My thinking was that I wouldn't want to let the other authors down by being late.

Unfortunately, not everyone has the same qualms as these two authors, by being late with their chapters, delayed the entire project. At this point I've already missed two ideal sales opportunities, one at the Homebuyers at Excel where I spoke last month and the one this weekend at Invest in Property.

The thing is, if I'd disciplined myself, I probably could have had my own book done by now, if I'd have kept going after writing that chapter! Ho hum! We live and learn. Guess what I'm off to continue doing now...

Speaking at Homebuyers' Show

OK, who clocked me on the panel of "Ask The Property Experts" on Sky's Overseas Property TV channel last week? I thought I looked OLD!

Look out for my appearance on "Women In The Property Market", which should be along soon on the same channel.  They filmed my other profile, maybe it will have aged better!

Next weekend I've got two slots to speak at the London Docklands Excel Centre. I'm booked to deliver two seminars at the Homebuyers' Show on Saturday 3 March and Sunday 4 March and I'm delighted to be able to offer my subscribers complimentary tickets for entry to the entire show. You can check out details of my talks and book your show tickets via this link:

http://tinyurl.com/ywfwxo

I've looked through the list of speakers and there are a number of interesting-looking seminars on across the three days of the show which starts on Friday 2 March and I'm hoping to catch a few of them - I think the speakers have access to attend any (hope so).

I won't have a stand at the show so if you want to catch me, you do need to come along to either of the seminars.

For those of you who can't make the show, I'll post on my blog about how the talks have gone.