LandlordZONE talks to Daniel Wood, a relatively rare animal in the world of property mentors, educators, deal sourcers and investment gurus because he says the sector needs regulating to weed out the cowboys.
The 31-year-old co-founded the Stockholm-based property investment academy Momentum along with his wife Gisela and Polish investment expert Lukasz Brzyski, in 2019.
It specialises in teaching students from all over the world including the UK to invest in property safely and analytically and urges its student not to believe the wilder claims many ‘gurus’ use such as ‘financial freedom in two years’.
Daniel has agreed to talk to LandlordZONE because he believes the property investment market needs a minimum level of oversight and regulation particularly in the UK to squeeze out the cowboys, a issue we have reported on many times.
Wood says he and his wife learned the hard way, starting out during the noughties after a British property education outfit came to Sweden. Instead, after following the company’s advice, they ended up losing £400,000 of investors’ cash they had raised after their deals went sour.
“We were told by our accountant to declare ourselves bankrupt and leave the investors to their fate, but instead we carried on and eventually we got their money back with a token profit paid to them,” he says.
“If you ask them would be very critical of us, but we got burned too and did everything we could to turn around the situation.”
He says a positive to come out that experience was that people turned to them to learn how to turn around their deals and, after several false starts, Momentum was born.
“The industry should be regulated; there should be rules and a big chunk of our introductory course talks about the deals that we’ve done that have gone wrong as well as the successes,” he says.
Wood says there are many areas where property investment courses can fall down, but that how they are marketed is the key.
“Using fake deals to promote your business should be banned, and also some mechanism to regulate how sourcing agents work and what constitutes a ‘good deal’ should be considered,” he says.
He says one academy he worked with claimed an 85% success rate in its marketing materials, but in reality only 10% of its students ever bought a property.
“It’s difficult because without regulation the truth stretchers can claim anything so people like us who are realistic about returns are made to look unattractive – and yet it’s we who are contacted by the students who use these less ethical firms when they’re seeking a way to turn their situation around,” he says.
Wood says there are still sourcing agents in the UK who over-state how much deals or developments might be worth and leave investors who don’t do their due diligence exposed, and at the other end others who use fake videos and details to lure people in.
“We have our own programme just to help those who come over from the companies who have sold them impossible returns,” he says.
“But if we can stop these companies lying to people in the first place then it makes my job so much easier.”
Visit the Momentum Property Education website.