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Returns of 15% per year invested!

Tuesday, July 9, 2013

This is taken from an email sent to me this morning:
 
Invest into one of the hottest investment sectors in London's city centre, without buying a unit outright from just $62,850 (£41,308)*. Our Secure Exit Strategy™ allows you to invest into exclusive pre-construction projects, for up to maximum of just 5 years, with complete protection of funds and no ownership commitment.

Invest early into this exclusive central London Hotel project with maximum 5 year exit strategy and contractual returns of 15% per year invested.

Urban Villa - Aldgate, London is a renovation hotel project in the heart of the capital. Due to its superb location, Urban Villa Aldgate is already proving to be one of our most popular projects in the UK to date.
 
Too good to be true? Any thoughts?

21 comments:

MK - don't know much, want to learn more said...

methinks if it's such a great investment, wouldn't they leverage to the hilt and makan for themselves, rather then "blessing" us with it?

AK71 said...

Hi MK,

Unlike buying distressed assets in a well regulated market, I am somewhat sceptical about such an offer.

So, I was wondering if anyone had personal experience with something like this?

HM Shak said...

If it sounds too good to be true, it probably is. Once you invest in this, you wont directly own anything physical...just a paper asset, contract to pay 15% per year (which they are usually not obligated to pay).

This is similar to what CastleWood group was offering for a resort in Phuket. I became suspicious of their mode of operation and decided not to invest with them.

AK71 said...

Hi HM,

Yes, if it sounds too good to be true, it probably is. However, the operative word here is "probably". There is a chance it could be true too. ;p

So, I would like to hear from readers and hopefully there are people who have done this before who are willing to share their experience. :)

Matthew Seah said...


Hi AK,

note the words pre-construction, contractual returns... sounds like a ponzi scheme to me.

You're buying into a "land bank" that claims to be having a major project which may not materialise...
How then can u get 15% returns except from future investor's fund

SG Young Investment said...

I've heard of this kind of offers before and even attended their events. The way they do their sales pitch is suspicious. They would use words like guaranteed returns and no brainer investment. I don't think this kind of model is sustainable. But they can still payout the 15% if property prices continue to go up. Once the tide changes, they would be gone just like the GOLD cases.

Some of these firms are already in the MAS investor alert list.

AK71 said...

Hi Matthew,

I have checked with Patty on the location since he is familiar with London. This is in central London but it is not an atas location. A biz hotel in the area is possible. So, unlike land banking which could be a plot of land near some mad cow farm, this plot seems ok.

Other than this, there isn't really anything else I find re-assuring about the offer.

This "investment" is limited to a 5 years term. Get 15% every year and at the end of the 5th year, they will return the principal sum. So, it is more bond-like but without a regulatory body. Rather risky.

AK71 said...

Hi SG Young Investment,

This firm is registered in Spain and operating in the U.K. So, MAS cannot even touch them.

Singaporeans who get into this will be going to war without any armour and artillery support!

JD said...

I've often been very skeptical of such offers and claims. I just rather lose my own money than have someone else lose it for me. If it turns out to be true, then good for those who vested.

AK71 said...

Hi JD,

I know what you mean. I think I rather explore the idea of possibly buying rental properties in the U.K. ;)

redponza said...

Hi AK,
Two points for your consideration:

Interest Rate
-I do not know why the company in question cannot just borrow from the banks. Hence either the interest rate is even higher if borrow from bank or the company cannot get any loan from banks.

Either way it is not a good sign.

Protection
-does investor have claim on assets (ie the land plot)?
-the said project is a hotel, and the cash flow return for hotel is slow. I wonder how the money can be returned to the investor
-or maybe they will sell the hotel to third party but what if there is no buyer?

Singapore Man of Leisure said...

AK,

I guess someone will take a vacation in London soon ;)

Nothing beats kicking the tire yourself.

Quick horse add whip. The pound is getting weaker. You lucky *^%(@@$&)(!!

Don't forget to check-out the birds there.

Ha ha!




shuaka said...

i beg to differ in my views.

just because an alternative investment product is unheard of here, it does not mean it does not deliver.

I discovered from talking to many people that they tend to take a passive approach to investment.

They focus on capital contribution, ROI, time frame......

If all your friends around you have made money in landbanking, gold scheme, intraday bonds, etc , then it will shape your perception as well, wouldn't it be ?

I would ask qnestions like:
is it 15% gross or net returns?
how is it calculated ?
how do they pay me? to which account ? do i need an overseas account? extra costs involved?
legal recourse in event mid year i want to withdraw? any penalty?
do i get a site visit ? free or charged ?
and many more

AK71 said...

Hi redponza,

I wondered about that too. It was probably too onerous for them to borrow from the banks. Then, we have to ask why, of course. :)

They said that there is no ownership responsibility and that the principal sum will be given back to investors in full after 5 years. So, the impression I got is that we are just potential lenders of money.

AK71 said...

Hi SMOL,

Nah, just kidding. The journey would be too demanding for flight averse me. ;)

AK71 said...

Hi shuaka,

Hey, always good to have a different perspective.

So, I guess you have made some good money in alternative investments? Would you like to share your experience of one or two here? Thanks. :)

Singapore Man of Leisure said...

Now that's the art of asking question!

Adarina Robin Foo said...

Hi,

I agree with Singapore Man of Leisure since it takes diligence and best if one can conduct actual ground checks before investing the hard earned money.

I rather believe in actions than words :)

Anyway all the best to all in their investments! Huat la!

P.S. I did earned through alternate investments before, with capital preserved, but not from what it is mentioned here.

SC said...

AK71, I know of another property investment from a SG company (majority shareholder of the company is the CEO and significant shareholder is from CWT Ltd family) that invest in US and Canada for as low as US$12k, and a net return of 12.3% for 4 1/2 years

AK71 said...

Hi SC,

Thanks for sharing this. :)

There are so many such investment offers these days that I really wonder how many are bona fide.

It is also difficult to do due diligence in such privately offered investments, I feel. Information is probably not available in the public domain?

I am attracted to these high yielding offers but at the same time I want some effective protection which I don't think I will get. It would take a big leap of faith.

Swan Yan said...

Two British businessmen were sent to jail yesterday for a bonds scam in which investors lost more than $3 million.

Timothy Nicholas Goldring, 60, was sentenced to seven years and John Andrew Nordmann, 55, to eight years. They were convicted on 18 charges of cheating involving more than $900,000 worth of investments after a joint trial. They faced a total of 86 charges.

Both men plan to appeal.

Investors lost some $3.1 million in the Boron bonds scheme between November 2008 and August 2010.

The two directors of land banking firm Profitable Plots promised 12.5 per cent in returns within six months.

Most of the money ended up being used for unrelated purposes, including paying off debts to investors from the firm's UK business.

http://news.asiaone.com/news/crime/profitable-plots-case-directors-jailed-3million-scam

http://www.singaporelawwatch.sg/slw/headlinesnews/43342-two-profitable-plots-directors-get-jail.html

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