On Inside Track going burst and the official end of the amateur landlord

A couple of years ago I went with a business partner to one of their free property workshops by Inside Track (IT).
We had been trying to make the move from amateur landlords to professional ones, and at the time, it seemed like a good investment. Just in case, we went for a pick.

What we found was an American-style overenthusiastic group of speakers addressing a bunch of gullible audience of 60-80 average London inhabitants (all races, all ages, all walks of life represented).

In theory, what they said made sense, but after trying ourselves, the whole idea of buying from distressed sellers through an ad on the local newspaper as a means to financial independence, sounded a bit too much. We stopped there, since what followed was laughable.

First, we had a quick presentation from a successful Inside Track investor, let’s call him Goran (he was British, by I feel like using a Slavic name). Goran told us that he and his wife were looking into buying an investment property in the UK until they went to an IT seminar and decided to go for a condo in Florida from Inside Track. They were amazed at the capital gains his property had experienced and how easy the deal had gone through, they even got a furniture package from Inside Track and hadn’t even visited the area!

Hang on a minute; you purchase a property, leaving all the due diligence to someone else? “Yes”, seemed the answer, and they started throwing at us the marvellous services they could offer us, from legal advice, to market research, buy-to-let mortgages and top properties to buy and let straight away to eager and naïf non-investors or so-called tenants.

That couldn’t be good, could it? If all of us purchased investment properties, who would be renting them? Apparently the high level of immigration and low house building would keep high the demand for 1 and 2-bed flats. Easier to let, they said.

Fast forward a couple of years. The credit squeeze is here and getting a mortgage (let along a buy-to-let one) is more difficult than a genuine smile from Tom Cruise. Abbey even asks for a 50 per cent deposit on interest-only BTL deals. Anyone?

On Tuesday April 29, went into administration.

Jim Moore, the founder of the company was already involved in pyramid-style schemes in the past although in the cosmetic market. After a lawsuit brought by Chanel, the venture also went bust. His divorce settlement from his now ex-wife Kim awarded her £15m.

Taking into account that they set up Inside Track together, and the shares are held by majority shareholder Pearson Foundation, based in Panama, and three Isle of Man trusts including one designated for Jim Moore and his former wife Kim, makes me think that they had it all well planned from the very beginning. Good for them.

Seriously, I went to one of the workshops and everything smelled of rotten fish. As anything in life, the experience was worth it.

3,834 attendants to the free workshop paid £2,495 and more for the weekend seminar in the year to March 31 2007 even with write downs, interest rate hikes, and Northern Rock falling apart. If greed took on thousands of wannabe property tycoons, so be it.

I already discussed in previous posts that a fool and his money don’t stick together for long.

And now, even the bus driver is running to Asda to stock on rice. Same old same.

Until next time,

.Calvin

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