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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3694
Experience:  Solicitors 2 years plus PQE
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Can I invest other peoples money friends and family into property

Resolved Question:

Can I invest other peoples money friends and family into property and give them a fixed return on their investment. What do I have to do to do this legally?

Thanking you in advance.

Regards

Tom
Submitted: 3 years ago.
Category: Law
Expert:  Alex J. replied 3 years ago.
Hi

Thank you for your question and welcome.

My name is XXXXX XXXXX I will assist you.

Is this a fixed group of people or is it variable? Have the people concerned already agree to invest or do you have to sell the idea to them?

Kind regards

AJ
Customer: replied 3 years ago.

Hi Alex,


 


If possible I am looking for my legal position to make sure I am legal.


 


What are the implications if a fixed group of people give me money to invest in property with a fixed rate of return?


 


If the group is variable?


 


If friends have agreed to invest without me selling the idea?


 


If I talk to people and offer them the opportunity that they can give me money to invest in property and after a fixed period would be paid 10% on their money.


 


Kind Regards


 


 

Expert:  Alex J. replied 3 years ago.
Hi

Thank you.

The problem is if you are selling this as a service for example then effectively all these people are doing is lending you money and you are purchasing property with a fixed rate of return. This potentially will require licensing under the Consumer Credit Act 1974 and FCA authorisation as it could be a regulated activity under the Financial Services and Markets Act 2000.

One way around this maybe to set up a limited company and offer the potential investors shares on the basis they have actively agreed to invest with you. You will then be the director that manages the company. You would not be able to actively market shares in the company for sale as this would be prohibited under the Financial Services and Markets Act but you could sell the shares to a fixed group.

Have you thought about?
- how you will return the money to your friends?
- who's name the property will be registered in?

I look forward to hearing from you.

Kind regards

AJ
Alex J. and other Law Specialists are ready to help you
Customer: replied 3 years ago.

Hi what I am looking to do is the simplest and cheapest way of borrowing other peoples money to invest in property, giving them a fixed rate of return - what would you suggest that doesn't tie me up in bureaucratic red tape?


 


if you wish to discuss this on the phone 07711 446221.


 


Kind Regards


 


Nicholas