If someone said by this time next year they could make you a property millionaire, would you be interested?Make Text Bigger
Alex Cook, Litigation Solicitor and Partner at Helix Law offers his view on the world of property development training.
Would you like to get rich quickly? There’s a host of people out there telling us we can all be property millionaires – but at what cost? Welcome to the world of property development education, training and mentoring. With little or no experience, we are told we can learn everything there is to know about investing in property, with seductive returns.
Soaring property prices and low interest rates have seen an explosive growth in the popularity of property investment. “Property development” appears to be more popular than ever – and now, a whole host of training courses are telling us anyone can be a part of this property boom.
Sound too good to be true? That’s because it most likely is, but you’d be forgiven for thinking you could easily spot the perils of such a scheme. Property developers can be individuals, joint partners, new or established businesses. They can be on both the lending and the borrowing side of the equation. Property development includes buy to lets, renovation and re-selling, leasing and conversion of property. We’re consistently told there’s money to be made in property development, or so it would seem.
Where to start, though?
Step Forward the Property Educator
Any sector growth is never far away from people who appear in a puff of wispy smoke from nowhere. The property sector is no exception.
Unscrupulous training companies and individual brands sell the property dream – they can “help you on your journey.” So what’s the catch? The inflated price is a good place to start. There are experts out there who claim they can train you to make significant returns by showing you the property development ropes. Don’t be fooled though; some of these training companies are sophisticated in their approach, utilising cunning methods and convincing testimonials to convince you to part with your cash.
They’ll tell you that armed with their amazing knowledge; you too can live the life you deserve. They’ll guarantee mentoring and support – the premise according to shady trainers is simple – pay up and your success awaits you.
As we’re often told, doing your due diligence on any business partner is wise. However, these property development companies are sophisticated and will often have a host of accomplices keen to reinforce their message including brokers, surveyors, and even lawyers. It will seem there are hordes of other paid up members, mentees and trainees, happy to reinforce how great their own decision to invest has proven to be, how they’re happy to have ‘started their journey’.
What could possibly go wrong?
As a lawyer acting for property investors across the country where deals have gone wrong, this is a sector I understand extremely well. I have to say that, in my opinion, a considerable proportion of the seminars, workshops, courses and education programmes on offer currently are sales funnels. Sign up to that free event and you’re on someone’s radar and in someone’s scope. Many of these events are cash generation systems. Dare I say it; they might be considered the new Ponzi scheme.
Unscrupulous hustlers spot their “marks” and act accordingly. Such courses are not easy to identify; you may think since the course is free, there is little commitment or investment required on your part. This is simply a way of attracting people in to ‘property development.’
You may be surprised to hear there is no accreditation required to teach or mentor would-be property developers; there is no governing body. The result? Almost anything can go wrong. And, in my experience, it often does. Loans aren’t repaid, joint ventures fall apart, and partnerships fail. Sometimes the rising market has helped plaster over the cracks. In a more challenging or even falling market? The potential impact and fallout can be terrifying.
Increasingly, in London and across the UK, I see evidence of failed property investments. Examples include failed loans, joint ventures, partnerships, HMOs, commercial and residential conversions as well as land and building investments. None have been thoroughly researched, prepared or executed within workable, professional and legitimate parameters.
It isn’t uncommon to see incomplete or incorrectly drafted documents that are full of legal holes, risks and problems. Trust your instincts though – even if you feel grateful to have been given the opportunity or if you are close to the mentor involved – be sure to get any contracts and documents looked at by an independent legal professional in advance. Any reputable developer would be more than happy for you to do so.
What to do if it all goes wrong
As a human being first and a lawyer second, the haunted looks on the faces of the people I represent stay with me. Their stories have a resonance and there are common themes. These are people and companies who have been dealt a low blow by so-called property training companies, mentors, or both. Training and mentoring is big business. Don’t assume an unscrupulous company is a small one – crooked companies turning over millions of pounds in this industry aren’t unusual.
At stake could be someone’s entire life savings, their pension, or the future of their business. The consequences can be devastating. I help clients with all aspects of property disputes and I’m pleased to say, have developed a solid reputation within the sector. I can’t help with your investments or advise you how and where to place your hard-earned cash but if I can help recover your money and assets, or a proportion of them; I will use all my experience, knowledge and skill to do so.
I deal with transactions and ‘deals’ when something goes wrong. When something isn’t delivered as was promised, your loan isn’t repaid, the joint venture fails or partners don’t do or deliver what was promised. There is hope out there and not all is lost.
Moreover, our team are happy to back our own advice and only to be paid if we’re right. It’s important to leave any embarrassment at the door; a reputable solicitor who specialises in this area will understand how this type of scheme works and the convincing techniques used to make people part with their money.
How do I find reputable training?
Not all training schemes are bad and some mentors add considerable value. The Association of Residential Letting Agents, the National Landlords Association and the Residential Landlords Association all offer excellent education and learning programmes. Most landlords, investors, companies and funds I work with would advise you to think long term – it’s unlikely you’ll get rich overnight. Don’t be pressured, railroaded or forced into doing anything you’re uncomfortable with. ‘No deal’ is better than a ‘bad deal’ – genuine property developers will tell you about the pitfalls as well as the triumphs.
Contact Alex Cook of Helix Law
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