.75% A week Return

R

Rosinsky

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I would appreciate your thoughts on this matter. Have been approached by company ( registered financial services company) that deals in short term loans / financing. The company is based in a country that has not been affected by the credit crunch, banking regulation is much stricter, currency very weak at present and economic outlook looks to improve ( feedback of the locals - not the provider).

It works as follows:
Property owner sells their house. The time it takes for the transfer can be 6 - 8 weeks ( in this particular foreign country). In the meanwhile, the property owners needs financing for personal reasons, possibly in financial trouble or has to pay a deposit on a new house.

I as an investors ( me) "lends" this money to the property owner that needs the short term financing @ .75% per week. My money is secured against the mortgage of the seller including the deposit- this is managed by my lawyer and the bank ,which is subject to contract. So, property sales contract is signed, 10% deposit is paid and the mortgage is approved and signed. Once all of this is in place as security the property seller can then draw down the funds and pays .75% per week until the title has been transferred( 6 weeks) . 0.75% x 6 = great return ( min 4 week) . The big risk is naturally the currency, however, this is very weak at present therefore an improvement seems inevitable.

By the way, the money can be used in a similiar fashion by lending it out to estate agents awaiting commission.

The question is, am I missing something or is it a no-brainer???
 
Devil's advocate question - if it's such a no-brainer, why are the local banks not tripping over themselves to offer this type of bridging finance?
 
Thanks for your reply. You raised a very good point, however, I dont have an answer for you. These guys are making huge money. If they are paying me .75% you can be sure they are making a few $$$ on top of that.
 
This seems to be a popular business in this country. The company that I am dealing with has 43 offices and have been in business for about 10 years.

The risks are acceptable in relation to the returns and by posting here I was hoping someone could highlight an issue I may be missing. Besides the opinion that it is a scam.

In the next couple of days I will be receiving all the legal documents and will investigage the company and proposal in more detail. Listen, if they can charge 1%-1.25% ( I pressume) per week and everything is legal and straighforward I woul consider doing this myself.
 
Rosinskey

In case you have not figured it out, that is 47% compound annual rate per annum for "secured" lending. They would be able to borrow at 10% if it's so secure.

( registered financial services company)
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This is meaningless.

banking regulation is much stricter
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I suspect that consumer protection is absent.

My money is secured against the mortgage of the seller including the deposit
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This is meaningless to me anyway.

You are being scammed. Stay well away.
 
One reason why bridging finance is tricky to obtain in Ireland is that the buyer of the house could pull out.

How strong are the guarantees that the property buyer can't pull out? If the repayment of your loan is dependent on the house sale completing, wouldn't this be a risk?
 
My understanding is that the buyer would lose their deposit if they were to pull out. No ways around this. So I suppose you can have guarantees if you lend out the amount equal to the deposit.
 
Rosinsky said:
So I suppose you can have guarantees if you lend out the amount equal to the deposit.
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...and the legalities of house purchase permit you to take this deposit.

I still can't shake my original concern. If it is so secure, why aren't the local banks doing it?
 
This is a con job.

1. The credit crunch is affecting all countries

2...The property transfer system described seems unreal. e.g you cannot secure a liability on a mortgage -

3. If this is such a golden opportunity, why are the locals not investing.

This is just one level over the Nigerian seeking helo ( and your bank account details ) over large amounts of money etc etc.
 
Roisinsky

This for sure sounds like a scam... I suggest you heed the advice from the previous posters.

Pershaps you should provide some further information regarding your OP, so that additional advice can be given, or at least comment on the previouis threads.

Taking a different view on this, could you confirm with AAM that you have no connection with any associated companies in connection with your OP.

My advice to AAM is reiterate the previous advice - Scam, Scam, Scam - & then close this thread.

.....

(Added the above thread - Forgot to read Roisinskys History.)

I would thread with caution regarding this one
 
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Thanks for all your posts.
The locals are investing ( the ones with money).
Not even close to the Nigerian scam you mentioned.

No connection to the company that is providing the product. Besides, if it did work out for me the last thing I would be doing is sharing the opportunity. If I was trying to promote the product in a devious manner I probably would have mentioned the company and also the country!
 
Which country has not been effected by the credit crisis? I thought it was a global phenomenal that stretched to the 4 corners of the world.
 
I should really clarify what I meant by "not being affected".

This particular country do not have the need to bail out their banks like the UK, US, Ireland and the rest. They are also no where near recession. Their housing market is still growing. Unemployment is not on the increase like in Ireland. There is economic growth will continue and the currency will be going in my favour.
 
I presume Rosinsky also believes that there is a Santa Claus and that there are fairies at the bottom of the garden.
 
This particular currency is very weak at present and with everything that is going on you can assume that it will strengthen. I did a deal over there about 8 years ago where I made close to 50% only on the currency strengthening. Obviously this may not happen again, however, I am confident that it will strenghten over the next 12 months. In relation to the investment itself, as I mentioned, have to revise all the contracts etc. etc. before proceeding.

Sant Klaus message - not necessary.
 
Leprechaun said:
This is surely a windup....
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Yep. Makes no legal sense. You cannot take a security against another security i.e. the proposed mortgage. A mortgage is a security. Nor can you take security against the deposit as the vendor would have that.
 
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