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I recently spoke with a trusted contact in the alternative investment field and I almost dropped the phone at what he told me! Someone will be getting ripped off somewhere and it wont be the provider or broker.

The launch of DevDosh Ltd is approaching in the UK and of course investor recruitment is making it’s way to the front of my mind. We need as many investors of the correct profile as possible to be aware of our product so that they can benefit from it should they so wish. On that basis I spoke with a great guy that worked for me in Jakarta many years ago. He is now an established senior broker in the UK alternative investment space. My question to him was simple. “If we allowed alternative investment brokers to introduce investors to DevDosh Ltd, what compensation would they expect?”

His answer amazed me. His subsequent product breakdown left be dumb struck.

He told me that a company he works with pay their alternative investment brokers 15%-18% commission. That was shock number one. Shock number two followed shortly after. A soon to be very popular product is an asset backed property bond with a yield of 24% over 2 years.

Now these sums really do not take a genius to work out.

  • 24% yield divided by 2 years is 12% a year
  • 16% commission divided by 2 years is 8% a year

That puts the property bond loan interest at 20% a year before the provider puts their margin into the mix.

Seriously, what sort of bad credit, shoddy back ground ne’er-do-well has to borrow at 20% ++. Furthermore how feasible is it that such exorbitant rates can be afforded by a legitimate construction scheme?

I wont even get started on the meaning of “asset backed”. There are still hundreds if not thousands of investors without access to recourse off the back of defaulted asset backed property bonds in the UK right now.

DevDosh Ltd charge our borrowers 15%pa. This is at the higher end of the 1st charge real estate development mortgage scale, but still acceptable. We take 5% as our total management fee which covers all of the costs of the investment process, administration and margin.

The lions share of the interest, 10%, is paid directly to the investor as their yield. Invested funds are used to finance a single 1st charge real estate development mortgage. This means that the security is dedicated to the capital and their is no doubt or confusion about how an investor will still get their return should the loan fall into default.

Investors beware. There are more costs to setting up and running an investment than the return you receive. If it’s to high then you really should be wondering how it is so and conducting due diligence to protect yourselves. If nothing else you now know that your protection and care is not your alternative investment brokers primary concern, their 15%-18% commission is.

If you are an investor looking to receive market beating yields fairly and securely, contact DevDosh Ltd today.