Investment Brick Wall (Help me help my friend please)

cormie

Hi there,
I'm posting on behalf of my friend. English isn't his first language and he's in a bit of a tricky situation with an overseas property. First of all, it's not really an investment as he doesn't own any property already and hasn't any thing of value. This was intended to ease his financial situation with future prospects also.

Anyway, in 2008 he invested in some property in Egypt and started paying instalments in mid 2008, from then until now, he's paid almost 18,000. The total price to pay is 35,000 but he only has until March 2011 to pay the rest, that's 17,000 in 7 months pretty much which is way above his earnings and if he doesn't pay it, I think he risks losing the property altogether and most of the money he put in.

The ideal situation is of course to finish it off and not have to back out but his earnings will not allow for that, he needs to earn another €700 or so per month from now until March 2011 which is very hard for him to do as he's pretty much flat out in his job as it is at present.

I don't know why, but it seems the agent won't allow him to pay it off after March 2011 so he's been to banks and everything looking to get a loan so he can pay the agent in one go and then just pay back the bank a manageable sum each month. He was about to get approved by one bank and then as soon as they heard overseas property, they backed out, then his credit rating showed he was refused too and when the other banks heard about the overseas property, they backed out too so he can't get a loan either.

Is there anything advisable he could do? He's even been trying to find people to go in on it with him, they could pay X amount and own X percentage of the property but as I told him myself, if I saw somebody offering such a deal from an agent I've never heard of in a foreign country sharing with a stranger, I and I don't think many others would touch such a proposition.

He's desperately trying to find a solution, he's posted on forums he frequents asking if anyone would like to share and all things like that but I'm also thinking, if somebody WAS to opt in with him, wouldn't he then also need to spend a packet in legal fees getting some kind of contract together with the partner? Also, what if there was more than one person interested. This would increase fees further more.

So if anyone has any advice on what the best course of action to take would be, I'd really appreciate you sharing it, otherwise he could lose out big time, and he certainly can't afford to do so as he's really counting on this.

An upside is that I think the value of the property is actually increasing due to location etc.

So any feedback, questions or suggestions will be much appreciated

conorhal

That's a very odd arrangement... why didn't he simply get a mortgage to pay for the property in the first place?

Anyhoo, a Chinese flat mate of mine who, shall remain nameless because she was so bloody shameless and a right sharp operator, had a similar problem buying an investment property in china, so she got a 'car loan' instead.

lightroom

conorhal wrote: »

That's a very odd arrangement... why didn't he simply get a mortgage to pay for the property in the first place?

Anyhoo, a Chinese flat mate of mine who, shall remain nameless because she was so bloody shameless and a right sharp operator, had a similar problem buying an investment property in china, so she got a 'car loan' instead.

Care to elaborate on "bloody shameless" and "right sharp operator"? You can buy a property for €30k in most of the medium size cities across China, the rapid value increase attracts people to invest. Since she cannot get a mortgage in this country due to her visa restrictions, her only option would be getting a car loan or a personal loan. Given car loan has a cheaper interest rate, it's the best option. I don't see any problem here given the limited choice she has.

If she can afford paying high interest, it's her own choice, there's no need to be so judgemental.

smellslikeshoes

Did he ask for the full 17k from the banks or the amount he will end up falling short? If he only needs an extra 700 or so a month income that would work out as about 5k short. Waiting till march and getting 5k then would be a lot easier than getting the 17k to pay it all off.

wyndham

cormie wrote: »

Hi there,
I'm posting on behalf of my friend.....

Why dont you lend him the money?

cormie

Thanks for the replies everyone

Wyndham, I'm not sure if you're joking or what? I'd certainly consider it if I had money to spare and would probably go for it but unfortunately I don't have money to spare at the moment. How about you? :P

I think he said he'll come here himself and post with more information.

cormie

As far as I know, he's applied for a car loan

conorhal

lightroom wrote: »

Care to elaborate on "bloody shameless" and "right sharp operator"? You can buy a property for €30k in most of the medium size cities across China, the rapid value increase attracts people to invest. Since she cannot get a mortgage in this country due to her visa restrictions, her only option would be getting a car loan or a personal loan. Given car loan has a cheaper interest rate, it's the best option. I don't see any problem here given the limited choice she has.

If she can afford paying high interest, it's her own choice, there's no need to be so judgemental.

You mean apart from the fact that it constitutes fraud? That qualifies as a sharp operator in my book, let her take out a mortage with a Chinese lender.....
As for the shamless aspect, I won't go into the specifics that here but lets just say that sombody else she shamlessly used got lumped with responsibility for the loan (not me).

Cookie_Monster

Credit Union loan?

jdivision

Why did he buy an apartment with a repayment schedule he knew he couldn't meet without first securing the finance?

cormie

His hours were cut pretty badly in work and he thought he could get backing from somebody but they got cut from work altogether themselves

Victor

I would suggest he spend a few hundred on a solicitor, posibly one in Egypt (ask embassy / consulate for recommendations), so he doesn't throw good money after bad.

EthicRanger

Nice thread Cormie.
Nice response from others. Hi, to all. and thanks to all. Here i am with late entry

Here is my renewed situation and offers: http://sn.im/EgyptOffer

last news are:
* I was rejected by BOI, but was approved by my bank Ulster with 5000Eur Car loan. Brilliant!

* Developer request 2500Eur/month every 30th day, starting from this month. ~17000Eur total. 6000-7000 will manage myself. Another 6000 still short. Please Check my offers in case you think i'm trustworthy.

* Started Bray Credit Union 3 weeks now (needed 2weeks until they aprove account). Need 3 month savings and then possible to request double saved amount loan. But probably need an irish guarantee person for first time loan their.

jmayo

EthicRanger wrote: »

Nice thread Cormie.
Nice response from others. Hi, to all. and thanks to all. Here i am with late entry

Here is my renewed situation and offers: http://sn.im/EgyptOffer

last news are:
* I was rejected by BOI, but was approved by my bank Ulster with 5000Eur Car loan. Brilliant!

* Developer request 2500Eur/month every 30th day, starting from this month. ~17000Eur total. 6000-7000 will manage myself. Another 6000 still short. Please Check my offers in case you think i'm trustworthy.

* Started Bray Credit Union 3 weeks now (needed 2weeks until they aprove account). Need 3 month savings and then possible to request double saved amount loan. But probably need an irish guarantee person for first time loan their.

Not wishing to rain on your dreams, but has the apartment been built and if not at what stage is it at ?
There have been countless hard luck stories coming out of Dubai about people paying in installments and the building has ground to a halt.
In fact the builders/developers have run but people are still owed their deposits and installments.

If building has stopped in this case I would be looking for the money back rather than pouring more in.
After all you are not the government pouring money into Anglo. :rolleyes:

EthicRanger

To jmayo:
What stage?
http://www.ipi-group.eu/en/projects/marsa-alam-beach-resort/view-the-works/

We pay Escrow they pays builders after each stage is finished.

Building didn't stopped. My agent, which i know well, was their few times. I Should ask,when last time or who from her known people were last.

jmayo

EthicRanger wrote: »

To jmayo:
What stage?
http://www.ipi-group.eu/en/projects/marsa-alam-beach-resort/view-the-works/

We pay Escrow they pays builders after each stage is finished.

Building didn't stopped. My agent, which i know well, was their few times. I Should ask,when last time or who from her known people were last.

Does some of the buildings being built in those pictures include your unit ?
If your unit hasn't been started or is only at certain level then double check how much of your money has been removed from Escrow account.
You should be able to get information from Escrow fund manager.

Double check if they are building recently ?

Also check ouit if there are any penalties for pulling out and getting total funds out of escrow if they have stopped building.

subway

cant believe this is allowed under forum rules, anyone getting involved in this would want their head examined.
the banks wont lend on this for a reason

cormie

What forum rules is it breaking? It's just somebody in a bad situation looking for advice

subway

cormie wrote: »

What forum rules is it breaking? It's just somebody in a bad situation looking for advice money

FYP

as far as i understand, its the asking for money part that isn't allowed.
he is basically selling a share in an investment property so put it on adverts like everyone else has to.

but to go further, one part that annoys me is the lack of detail and wishy washy outline

I don't know why, but it seems the agent won't allow him to pay it off after March 2011

I think the value of the property is actually increasing

it's not really an investment as...

Anyway, in 2008 he invested in some property

finally, it all just seems like a softly, softly setup for your mate to join up and ask for cash, which happened a few posts later so i guess it is.

cormie

Not at all. I didn't know any concrete details, all I had was what he told me, nothing in writing so I didn't have anything to refer to when I posted the first post at 2am, just going by my memory which is sketchy at the best of times.

I posted seeking advice for a friend who is in a challenging situation, from people who may have experience with such dealings.

I don't personally think posting such a thing on a forum like this would be a good way to find partners/investors at all. I wouldn't be comfortable at all myself giving money to an overseas property in partnership with some poster I just knew off an internet forum. I think there are much better avenues to take and feel only somebody who knew and could trust him could opt in with him and an internet forum is no place to establish such a relationship. That's my opinion. If my friend wants to propose to readers an offer, that's his choice and let the mods do with that what they see fit but the intention of starting the thread was to get advice.

kmick

Opens google.com and 3 minutes later after some sleuthing...

Some backgorund on the developer who never finsihed the last resort they started it seems.
http://zafaranainvestors.blogspot.com/

A picture of the 5* resort they previously developed
http://4.bp.blogspot.com/_HKCJzLFHjF8/Sp3HXok2PCI/AAAAAAAAAF8/7bvUSAw9Lk8/s1600-h/adela.jpg

If it were me I would be seriously considering parting with any more money.

cormie

Interesting link, thanks. I'll let my friend know about that!