Is the failed buy-to-let 'guru' Jim Moore back in business?

Published 01st Aug 2011

Property ‘get-rich-quick’ schemes – where potential landlords are encouraged to buy flats and ‘put no money down’ – are back, with at least two companies encouraging investors to enter into risky and potentially illegal transactions.

Intriguingly, some of the correspondence is signed ‘James Moore’ and comes from the personal email address of Jim Moore, who founded the notorious get-rich-quick property firm Inside Track.

Moore insists these new schemes have nothing to do with him and says his email account has been ‘hacked’.

Inside Track collapsed in 2008, but at its height claimed to have ‘educated’ 25,000 investors and sold £3 billion of property.

In 2007, Moore’s stake was estimated at £100million. He now claims he is broke and is being sued by former clients, thousands of whom claim they lost money following his advice.

The companies targeting investors today make promises similar to those made by Inside Track at the peak of the buy-to-let mania in 2005 and 2006.

‘Forget nine-to-five day jobs for ever,’ they claim. ‘Work four to six hours per week, not 46.’ Promotions from both companies – one is called Invest4less, the other is Elite Property Success – play heavily on the idea of investors buying properties with 100 per cent mortgages or ‘no money down’.

This was an Inside Track hallmark. Experts say in today’s market a ‘no money down’ deal will probably involve mortgage fraud. Even in 2005 and 2006 when ‘no money down’ property investing was commonplace, it was questionable.

A developer would market a flat for £200,000, say, but sell it to an investor for £150,000. The lender, however, would be aware only of the higher price. Given that lenders would typically advance a maximum of 75 per cent of the developer’s price, this would work out at £150,000, leading to a ‘no money down’ transaction.

The ruse was facilitated by unscrupulous mortgage brokers, surveyors and conveyancers and succeeded thanks to reckless lenders such as Bradford & Bingley, where procedures were lax.

B&B folded in 2008. Earlier this month, Invest4less, which claims as its address a nonexistent street supposedly in London’s upmarket Belgravia, invited potential investors to a seminar on July 19 and 20 at the Sofitel hotel near Heathrow’s Terminal 5. ‘Come, meet us and learn how in today’s market you can build wealth faster,’ it urged.

‘Make your life a holiday!’ It also proclaimed: ‘100 per cent mortgages are Alive & Well! No cash deposits are Alive & Well!’

The emailing was undertaken by marketing firm Infusionsoft. When Financial Mail applied for a seminar place, a ticket and invitation was sent by another firm, Eventbrite.

But days before the seminar was due to take place, Invest4less cancelled, emailing: ‘We have to postpone as our main presenter is stuck out of the UK ill.’

Surprisingly, a follow-up email said: ‘Do you have any questions I can answer?’

It was signed by ‘James Moore’ and, as Financial Mail has since learnt, came from Moore’s personal email address. Moore now claims he is the latest victim of malicious interception or ‘hacking’.

His lawyer, Birmingham based Neil Davies, says: ‘My client is horrified to see that his name and email address have apparently been misused.

He is taking up his concerns with the appropriate authorities. He denies any interest in or involvement in Invest4less.

Mr Moore lives overseas and has no business interests in Britain.’ The marketing tactics employed by Elite Property Success, whose address is unknown, are similar to those used by Invest4less.

Two weeks ago it emailed potential investors, inviting them to buy flats in Edinburgh at ‘distressed’ prices. It said: ‘The gross price is £160,000 and we have negotiated to purchase from the distressed vendor for just £120,000.

This means that the 25 per cent discount will cover any deposit usually payable.’ Elite then cites a mortgage it claims is available from BM Solutions, part of Lloyds bank. BM says it refuses all applications on distressed sales.

It says: ‘Our maximum loan-to-value is 75 per cent of the valuation or purchase price, whichever is lower. The scheme as described would not be accepted.’

The Council of Mortgage Lenders says no bank will knowingly lend 100 per cent of the price of a property to a landlord. Melanie Bien of mortgage broker Private Finance in London says: ‘Anyone misleading their lender about the price they pay for a property is breaking the law.’

The only Invest4less registered at Companies House was based in Pinner, north-west London, and was dissolved in 2008.

No companies are registered under the name Elite Property Success.

Financial Mail’s emails to Elite went unanswered.

Low returns on cash, a surge in tenant numbers and a resulting rise in rents have all helped drive a recent resurgence in buy-to-let.

The Association of Residential Letting Agents says more than half of its members reported higher rents in the first half of this year while three-quarters said property supply could not meet tenant demand.

In London, reputable agents say investors can achieve annual yields – rental income compared to property price – of eight per cent.

But unlike the boom years of 2005-2007 when thousands of novice, ‘armchair’ investors were doing the buying, today’s landlords are usually experienced, long-term purchasers.

The Bank of England’s July 2011 ‘Trends’ report said ‘demand for landlord lending has been rising since the second quarter of 2010’.

It also said the availability of landlord mortgages was increased, with about 600 deals now available, ‘the highest number since September 2008

Source: ' ThisIsMoney '

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