You’ll almost certainly be aware of the complaints regarding property investment scams, fraud and simply mismanagement that have led to investors losing significant sums of money through either bad ‘training’ or investments gone wrong.
Here’s an example from one article that I have recently been reading about the Joint Ventures in Property (JVIP) group and associated companies run by Peter Dabner, Dick Dabner, and Paul Bohill, that has recently collapsed leaving investors out of pocket. Some to the tune of six-figure sums!
The group of companies, based in Tunbridge Wells, offer investors the opportunity to leverage money and generate strong returns using their experience. Their website even gives the option of linking your SSAS pension.
This comes as a stark warning to potential investors. Property can all too easily be seen as a get rich quick scheme however there are risks and in an unregulated environment, investors are effectively entirely risking their funds.
So, what happened with JVIP group? Well, following communications from the group, investors received an email on 31/12/21 stating that JVIP was stopping anyone from taking out their funds and pausing all interest payments for three months whilst the business was restructured.
As if this alone didn’t strike enough fear into the hearts of investors, JVIP group has recently announced that it has collapsed.
The exact financial position is not entirely clear as financial and bookkeeping records have not been properly kept for around 24 months, however, the position looks dire with the company having a net position of around £17m as I have outlined below:
- Assets: £43 million
- Secured lending: £31million
- Unsecured lending: £29 million
- A net position of circa minus £17 million
Of JVIP’s portfolio, Crowd Property has already repossessed some of the sites they were involved with, however undoubtedly a large number of investors will have lost significant sums of money.
Through this approach, people will have lost things such as their life savings, pensions along with significant sums that will undoubtedly have a significant detrimental impact on their lives. It’s situations such as this within the property sector that happen all too regularly and make me sick to the stomach.
There have been rumours of increased FCA regulation due to the rise of schemes such as JVIP and I personally think that this is a reform which, whilst adding an additional layer of complexity, would be very much welcomed in principle (and probably needed to be honest).
How Can Investors Protect Themselves?
Ok, so the question on our lips is how we can avoid losing our money. Well, the first point is to simply do your due diligence.
Anyone who even as much as scratches the surface of JVIP group will spot that Peter Dabner (sole director of JVIP group) has 29 active companies with many flagged as in administration or have accounts long overdue. Not only this, but the accounts due for JVIP group itself which were due by 26th November 2021 are also overdue.
I have even seen multiple spellings of a person’s name on companies house to try and hide a bad history. Always do your research and thoroughly check out all companies that the person says they own.
This is just one area to look at, however can really set alarm bells ringing. Yes, a company can have a flash website full of what looks to be credibility, smart marketing materials, and a good public persona however this doesn’t mean their business is functioning well, profitable, and even solvent!
There are also far too many individuals who have completed some form of property ‘training’ and now think they are an expert so can take your money for investment. The flip side of a flash website is where an investor has a poorly designed business card with a Gmail address and a mobile number. These are certainly investment opportunities to treat with great caution!
My final recommendation is to diversify. Yes, property is an excellent asset class for long-term investment, however, you won’t want to put all your eggs in one basket. Investors should consider a diverse portfolio that includes a broad range of investments such as stocks & shares, bonds, crypto etc as well as cash and not take too much risk!
I hope that you found this article helpful and would be more than happy to answer any questions you may have. The best way to get in touch is through LinkedIn.