womeninpropertyinvestment

Passive Investments make the papers

Sunday, 6 December, The Observer ran an article on Passive Investments.  Not sure where they got some of their figures from but they did speak to a large number of ex-Passive investors to pull the info togethe, so I guess they drew their conclusions from this.

Here's the link to the article:

http://bit.ly/5FHeY1

The Passive Investments (and other Greg Ballard/Andy Shaw companies - Ballard Shaw Promotions, Landa Investments) liquidation is on Friday 11 December in Fareham, starting at 10am.  Take your sandwiches if you're attending all of them.

Passive Investments Clients Offered Help for Free

The property community is offering support to Passive Investments clients as an alternative to them sending Tudor Equity (the "new" Passive) another £2,500 and £10,000 from any property they have bought for them.

If you are one of Passive's ex clients who does not see the value in giving another £2,500 to people who have already used up what appears to be in the region of £10m of client's money and claim there is nothing left, and you would like to explore the option of receiving a property, without any finders' fee charge and no back-end charge, sourced in your local area, where possible (and if this is your preference), contact:

Paul Alcock via:

www.paulalcock.com or www.propertydeals.biz

Several well respected property sourcers have agreed to help and a mortgage broker has also agreed to source mortgages for no broker fee either.

I will be pleased to assist with the necessary due diligence and locating letting agents, tenants, etc.

Also, Vanessa Warwick has offered the following:

I propose an educational day for Passive clients where they can network together and support each other and receive some free training/education that delivers authentic value without any kind of sales agenda.  I think they would find that practical and helpful, not to mention refreshing. 

---

Vanessa Warwick
Professional residential Landlady and twitter/forum addict
www.4wallsandaceiling.com
Follow me on twitter: @4_walls

Vanessa has said she will put this day together in Weybridge and already has a number of ex-Passive clients who have contacted her with interest.

Finally, you can also join the group action to obtain the return of your lost funds if (and only if) you wish.

Feeling sorry for Andy Shaw & Greg Ballard?

Yesterday I received a call from a chap who put down a £45,000 deposit on a villa in Cyprus being marketed bby Andy Shaw through ASI (presumably Andy Shaw Investments) in Chichester.  After his money was bounced from one failed purchase to another, he finally decided the investment wasn't happening and he requested its return.  You can guess the rest.  Apparently, he is one of 11 people in the same position and yes, he had been told that the money would be held in a safe, separate account. After all, these were DEPOSIT FUNDS for a property purchase, not money given to Andy to use as he saw fit. If everyone invested the same, this amounts to almost half a £million!

Yet I know there are still people out there who will be feeling "sorry" for Greg and Andy and probably saying that people should have done their own due diligence and that those who invested cash personally on which Andy & Greg promised to pay interest (and were doing up until early this year when the contracts started coming to an end and the money was due back) had to accept that with big reward came the big risks.  Do they have a point?  After all, the credit crunch has hit many, hasn't it? 

My comments are as follows:

1. I always agree, and advocate, that people should do their own due diligence before getting into an investment.  Passive Investments' (check the name) business model appealed to, and was marketed to, those who (a) did not understand property investments, and many not have understood enough to realise HOW to do such due diligence, and (b) those who did not have the time to do the work themselves.  An excerpt from their STILL LIVE website states: 

   "Our experts manage the entire process from start to finish allowing you to focus your energies on your family and working life. This is why we are called Passive, and why we are the investment choice of professional people seeking security for their future, or retirement.

   Passive Investments will save you time, because we deal with all of the complex processes and legal matters on your behalf. We also save you money because our knowledgeable teams understand the buy-to-let market inside out, we know how to manage property efficiently, how to minimise costs and maximise value."
2. Those who invested their unsecured cash did so for a fixed period,mostly personally providing this money to Andy & Greg. They received a very good interest rate. Presumably Andy & Greg used this money to purchase properties with the intention that they would refinance and pull out the money to repay the individuals before the cash was due back.  Their defence now is that the market has fallen and they are currently unable to pull out the money which is locked in the properties.  Andy, who has always been very vocal about having an uncanny knack of always being right about the markets, obviously did not predict what was going to happen but, even so, Passive claimed their system could refinance quickly and they had 2 or 3 years (depending on lengths of agreements) notice that the money was due back! In addition, they stopped paying the interest earllier this year because they had no cash flow. How come? One of the great things about the current financial market is that my cash flow from properties has increased enormously. Greg & Andy claimed to have (depending on who they spoke to and when they said it) 200+ properties.
3. Various estimates from ex staff state that there were possibly 150+ investors involved in the portfolio build. Even if there were only 100 who paid an average of £37,500 each (some paid less, some more), we're looking at close to £4million. They paid this money for a 6 year service yet Greg claims all the money has gone and cites that he has had staff and premises to pay for. Many people have not even received one property yet!
Surely, if you commit to someone to provide a service for 6 years and you take £37,500 from them to do this, wouldn't you ensure the money would be spread to pay for the necessary resources over this period of commitment?  To blow all the money before you've provided the full service is bad management and, as far as I can see, nothing whatever to do with the credit crunch, unless... they've used that money to purchase property for themselves. Is this legal?  I believe this is purely bad management.
 
Some people have also said that Passive were right to continue plying their wares. They were at the Property Buyer's Show about 3 weeks ago (those stands are not cheap!) looking for new clients. At that time, and at the time they took fees from people, and at the time Steve Howson was telling people their money was safe, Greg was also telling others that he could not pay them back, that the VAT and tax people were onto him and he did not have the funds to pay and Passive already had at least one court judgement against the company for almost £7,000.  I do not believe they were right to continue bringing in more people. I believe it was dishonest. They were selling a service they knew they could not provide and they must have known the company would not be around for the long haul. Greg actually told people, individually, that if they rocked the boat it would stop others signing up which would mean he would not be able to bring in the money he needed to pay them. Anyone heard of Berni Madoff? A massive Ponzi or pyramid scheme - a little like the UK government pension plan that Greg & Andy said their product was an alternative to!
 
My final belief is that they had a great business model but they got greedy and forgot that the universe demands you provide good service to others in order to benefit from wealth.  They did not provide a good service once they had received people's money (as many of you know, I found this out to my cost when their inefficiency led to me getting slapped with a CCJ - full story earlier on this blog) and they began providing shoddy properties (some currently unlettable!) and charging a lot of money for "renovations" that were not worth the cost.  Anyone who complained was treated with contempt and told they were a solitary unhappy client. Now we are finding out the truth.
 
So, do you feel sorry for Andy and Greg? Well they have closed down many companies and walked away from debt before but I believe these were previously company debts through their double glazing firm rather than people's inheritances, pension funds, mortgage funds, etc. This time it's personal, yet, through Tudor Equity they appear to be gearing up to continue the model, with someone else in the director's seat (due to Greg & Andy's looming personal bankruptcies) but with Greg Ballard "available to help and advise us when necessary". One comment I received yesterday was "Greg pulling the strings".  So will this company be run any better?  I sincerely hope none of the Passive Investments clients who have received letters from Tudor Equity sign new contracts with them for the "small contribution of £2,500" and a reduction in Acquisition Management fee to only £10,000 per property when it looks like any properties with charges in favour of Passive Investments may be free of those charges (to be confirmed) when Passive goes into liquidation.
 
Finally, Knowledge to Action yesterday sent out a joint venture email promoting a video by "Andy Shaw and Greg Ballard, Multi-millionaire Property Investors".
 
Now perhaps the content is good, after all, 30 seminar attendees allegedly paid £5K each to attend (there's another £150K, less costs!), but what is the definition of "multi-millionaire" these days?  This kind of marketing, when you know what's going on in the background, affects us all. It gives a bad name to those of us who are genuine millionaires (and for clarification, I'm talking net worth (EXCLUDING BORROWINGS!) rather than £1m lying around in the bank).  I'm sick of individuals who lie & cheat others. They are not the first (I was also used by one other after Passive, and had to get involved in sorting that out, too, with both time and money, but it was nowhere near on the scale of the Passive debacle) and unfortunately, I'm sure they won't be the last.
 
I think the saddest part of all this is not whatever becomes of Andy & Greg, nor even the amounts of money people have lost - people who may never have that kind of money again and people who are left to repay the money borrowed from mortgages and loans - but the fact that many of these people will never trust anyone or another investment again. That's very sad.
 
 

Greg Ballard, Andy Shaw, Passive Investments Final Straw

The latest regarding Passive Investments will affect you whether you have a portfolio product or have loaned money to Ballard Shaw (also known as Surranan Limited).

 

As I said in my last post, the latest is that Greg & Andy are being sued for bankruptcy and have hearing dates set for November and December in Brighton.  They are not contesting the petitions.  This may be because they have no or few assets in their names.  I understand Greg may have sold his cars, at least on paper, although they were still on his driveway recently. 

 

The house in which Greg Ballard now lives (having remortgaged his home in Worthing and rented it out) was purchased for £1.1m last year with a mortgage in his wife's name (Helen), who states she is a housewife. 

 

Property "Expert" DVDs

 

Greg and Andy have been plugging DVDs of their workshops by e-mail over the last few weeks and as recently as last Thursday sent an offer to acquire one of ‘only 200 copies’ at a knock-down price  so they can teach people how to invest in property since they are such experts.   By the way, I am told (not verified) that Andy has had several properties repossessed - do you want to learn from someone like this? 

Money Loaned Unsecured  

If you are amongst those who loaned them money with no security, you need to check your letter to see to whom you loaned it as you may have a claim against Andy/Greg directly, (in which case the bankruptcy will be of particular interest to you), or to Ballard Shaw / Surranan Limited, in which case, read on...

 

Th notice of liquidation of Ballard/Shaw, under what is apparently its new name of ‘Surranan’ was posted in the London Gazette on October 26^th with the hearing being held on 13 November in Fareham:

 

 

SURRANAN LIMITED

(formerly Ballard Shaw Limited)

Notice is hereby given, pursuant to section 98 of the Insolvency Act

1986, that a Meeting of Creditors of the above-named Company will

be held at the offices of Portland Business & Financial Solutions Ltd.,

1640 Parkway, Solent Business Park, Whiteley, Fareham, Hampshire

PO15 7AH, on 13 November 2009, at 11.30 am, for the purpose

mentioned in sections 99, 100 and 101 of the said Act. In accordance

with the provisions of section 98(2)(a) of the Insolvency Act 1986, Carl

Derek Faulds, of Portland Business & Financial Solutions Ltd., 1640

Parkway, Solent Business Park, Whiteley, Fareham, Hampshire PO15

7AH, being a qualified Insolvency Practitioner, will furnish Creditors

with such information concerning the Company’s affairs as they may

reasonably require.

G J Ballard, Director

26 October 2009. (962768)

 

 

You should immediately contact Derek Faulds of Portland Business & Financial Solutions Ltd to register your claim.  Phone number is:  Tel: 01489 550 440.  If you are a known creditor and you did not receive notice of this meeting, you should have.  Do point out to Faulds that this did not happen.

 

 

Portfolio Build

 

If you have a portfolio build contract, read on...

 

 

Here is a link to a site where you can find brief details on Tudor Equity and Alexander Philips, showing their registered office (the same) and date of registration.  Just search for their name.  https://secure.creditgate.com/ .  You will find that Tudor Equity has just been registered earlier this month.  Both companies are registered at the same address as Passive Investments:

 

Company Name: ALEXANDER PHILIPS LIMITED
Company No: 06970810	Registered Office:
Incorporated: 23/07/2009	A2 YEOMAN GATE YEOMAN WAY WORTHING WEST SUSSEX BN13 3QZ

 

Company Name: TUDOR EQUITY LIMITED
Company No: 07069736	Registered Office:
Incorporated: 08/11/2009	A2 YEOMAN GATE YEOMAN WAY WORTHING WEST SUSSEX BN13 3QZ

 

It would appear that what Mr Palmer said they would do has probably happened.  The assets of Passive (the restrictions/charges on the properties) have been passed to the new company, probably for a nominal purchase fee.  Interestingly, there is information on Portland Financial Solutions' website about this:

 

http://www.portland-solutions.co.uk/forthcomingEvents/viewNewsRelease.cfm?iNewsReleaseID=60

 

Tudor Equity is now kindly writing to some portfolio investors with the kind offer of reducing this charge to £10K and continue to provide their wonderful management and build services IF they pay another £2,500.  The letter from Passive (Greg Ballard) does state "all the Portfolio Builder Contracts will die with the Company."  So where does this leave people who have restrictions and charges on any property, which are the only assets that Passive could possibly pass on?

 

Not all investors have received this offer but then not all properties have charges and restrictions.  I would suggest that if you have one or more properties, you first obtain details of your property from the Land Registry to see whether there are any aside from that of your mortgage company.  If not, the only hold they ever have on requiring you to pay this would be via the contract so do you want to sign a new contract with their new company (even if you planned to) until you have investigated the current status of any charge.

 

I also know that some people paid £37,500 already and have not received ANY properties so may be thinking that for another £2,500 it would at least buy you something, but you should be aware that Passive already have many unhappy clients who say their service is terrible and many properties they have purchased have often turned out to be problematic.  Mr Palmer claimed that around 40% of their properties remain unlet.  You would also have to find the additional funds for deposit (£30K). Are they really doing anything for you that you cannot do yourself?  Since they have admitted to many clients that they were unable to continue due to the "credit crunch", at a time when there have been bargains to be had, I very much doubt it. 

 

Rather than pay any more money to them, I would personally feel the money would be better spent taking any necessary steps to have the restriction/charge removed.

 

The question that remains unanswered is "what have they done with all the money?".  This was money that was paid to them to provide a 6 year service. The fact that it's been used up in just a few months in some cases and many people do not even have one property yet, tells you a great deal about their business abilities and ethics, in my opinion. 

 

Do also remember that they have closed down several companies before this one and that it appears they have every intention of continuing in a business dealing in property equity and are obviously hoping that the new companies (still being run by Steve Howson and Greg's relative, Neil Ballard, and "advised" by Greg Ballard) will take over the restrictions on the properties they have bought for people.  Therefore, if they are allowed to get away with this, they still have a nice future to look forward to since they will have dumped all the debts of Passive. 

 

Passive Investments - Greg Ballard & Andy Shaw Latest...

I'm told Greg Ballard is in Brighton bankruptcy court on 14 December and Andy Shaw on 21 December.  Rumour has it that a new company called Alexander Phillips (sp?), director - Neil BALLARD - has been/is being set up which will probably take over Passive Investments' assets (but presumably NOT their debts!).

Unfortunately, many, many people have handed over large sums, either to the company, Passive Investments, or Ballard Shaw as a partnership (the individuals), and the deeper you dig down the rabbit hole, the more shocking this entire episode becomes.  I have heard stories that would make an honest person's hair curl.  I even heard they appeared at a property exhibition recently, still hawking their wares.

 Here's a couple of paragraphs from an email I received today from a worried "investor":

 "I wish I had found your site twelve months ago when I was investing with Andy and Greg, but unfortunately I was completely taken in by Greg's smooth words at Gatwick and by Andy's 'impressive book.
 
I sent them the first £37,500 last November, courtesy of my Mortgage Express loan extension, and was waiting three months before sending them the other £30,000, as advised, but the credit crunch hit just then and when I went to Mortgage Express to ask for the other £30K they just said NO. As you know Mortgage Express has been taken over by the government.
 
I told Greg what had happened and thought he would understand and return my money, but he just gave me the usual line of 'never returning money under any circumstances'. He knows that I suffer from Multiple Sclerosis, that is the reason I went to him in the first place, but he just didn't care. He just gave me a sob-story about how my money was being used to support his suffering staff in these difficult times. In point of fact my money was paid straight into Andy and Greg's personal account, not into Passive's."

This is typical of the kind of stories I've been receiving since I posted about my own experience. 

Anyone who wants to join the group already in place regarding a complaint to the Serious Fraud Squad should contact me via my website at www.womeninpropertyinvestment.com.

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