Portfolio Magazine – Members Only
IAP Core Values: “Integrity, Honesty, Professionalism, Fair and Clear, Helpful, Open, Informed Decisions:”
“Our objective is to ensure that we deliver a service of the highest quality to our member’s at all times and to adhere to the highest standards of honesty, professional integrity and dignity, with clear explanations and no exaggerated claims.”
” The investments members make through Instant Access Properties will often be the biggest financial commitments of their lives. They need to be sure of the professionalism of the people they meet, they need to be able to believe the advice they are given by the consultants they deal with and they need to have confidence in the services they are offered.”
Buy-to-let firm ‘used staff with no expertise’ Tony Levene The Observer Sunday 26 March 2006.
Instant Access Properties, Britain’s biggest buy-to-let property club, found new-build apartments to sell to members with the help of a woman with no experience in the property industry, a court was told last week.
The case lifts the veil from the dealings of the buy-to-let property world. Instant Access Properties is the sister company of Inside Track, which specialises in buy-to-let seminars. Set up by one-time pyramid perfume seller Jim Moore, Instant Access claims it is responsible for selling about 5 per cent of all new-build flats to investors, selling often unfinished buildings in return for a non-refundable membership subscription, a non-returnable £1,000 reservation fee, and 3 per cent of the purchase price.
Instant Access was set up to market properties to those attracted to the Inside Track seminars, which promised to turn those with little or no money into ‘property millionaires’ in as little as five years. The seminars started in 2001.
In the Mayor’s and City of London Court last week, Instant Access was involved in a complex case with Whitedrake, a company set up to find new-build off-plan opportunities for Instant Access’s members. Whitedrake, run by mother-of-three Lorraine Captan and her husband Safi, sued Instant Access for £150,000 in unpaid fees, while Instant Access counterclaimed for £845,000 in profits lost, it alleged, through a lack of care by Whitedrake.
The court heard that Lorraine Captan first started sourcing properties for Instant Access in 2002, through a now dissolved company, Danforce. Captan admitted in a statement read to the court that she had not worked in property before that date. There was no attempt to hide Captan’s lack of property experience from Moore, who was her brother-in-law. Subsequently, Moore’s marriage with Captan’s sister broke up – acrimoniously, the court was told.
Moore took on Captan without a formal contract. Her job – via Danforce – was to find off-plan developments.
The court was told that, using a template supplied by Instant Access, Captan had to see if the development would ‘stack’ – the property industry term as to whether the projected rent would cover the likely mortgage costs with a 25 to 30 per cent margin left over. Captan’s company would earn £450 for each unit in a development. This came out of Instant Access’s fees, which could total £7,000 or more for each unit.
Relations between the two sides became difficult in 2004 around the time Moore’s marriage broke up. One property found by Captan was in Willenhall, Staffordshire. Instant Access alleged that Whitedrake failed to disclose that this was a 15-storey ex-council block of steel construction – factors that ruled out mortgages from most lenders. It also alleged that Whitedrake exaggerated the likely rental levels.
But Whitedrake said all it did was to tick boxes on a spreadsheet or template supplied by Instant Access, where factors such as ex-council status, height and steel construction did not figure.
Problems also occurred with a planned block of flats in Digbeth, Birmingham, which Instant Access sold as a ‘selected investment property’ – however, there was no development because the developer had been unable to raise sufficient finance.
Willenhall was also an investor ‘no-go’ because mortgage finance would be difficult if not impossible.
The Willenhall and Digbeth deals fell through, as did some others introduced by Whitedrake in other towns. Instant Access gave investors back their deposits and reservation fees paid on these developments and alleged that it lost £845,000 in profits on these deals – money it wanted to recover from the Captans’ company.
The two sides reached an out-of-court settlement, the terms of which are confidential.
It is likely that Instant Access will continue to source properties for the time being from the Captans, who claim to have found a new way of selling off-plan developments that will save investors money.