May

Landlord warns investors after JV ‘opportunity’ leaves him nursing £300,000 loss

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A landlord who lost £300,000 when a joint venture deal went sour wants his experience to serve as a warning not to take potential property investment partners at face value.

Rehman Akhtar (main pic), who currently lives in Saudi Arabia, had amassed a portfolio of around a dozen buy to lets in various locations around the UK, as well as properties in Bahrain, the UAE and Malaysia.

After attending property training courses he became a middleman, sourcing investors for UK developers looking for funds, he tells expatpropertystory.com.

Akhtar was invited to invest £300,000 in a development project in Doncaster by a well-known property trainer, with the assurance it would return a 30% profit in 12 months – not realising that there were already two other investors involved.

When the builders ditched the project, having built up about £650,000 worth of debt, the other two investors repossessed the property, sold it at auction and made just enough money to pay themselves off.

Life savings

The sunk deal has drained his life savings and he is now selling all the UK properties to pay back his investors’ money. Akhtar says he’s learned not to make big decisions alone.

“Use mentors, use friends and colleagues, use lawyers,” he suggests. “Even if I had spent £1,000, or £2,000 on a good lawyer to analyse this deal or a good accountant, that would have been money well spent.”

He advises others to ask potential partners whether they are the only investor in the deal.

“Ask if they have had any deals go bad before, if they had any projects that didn’t quite complete and if you can talk to five other investors that they’ve worked with.”

Akhtar adds: “Do not be afraid to say no. Just because you get on well with that person…especially with JVs, as soon as you hand that money over the fence to the developer, your power is lost.”

Read more about JVs.

Listen to a podcast interview with Rehman Akhtar.

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