Be careful! There are charlatans out there trying to profit from people's ignorance. I had a guy reach out to me recently, trying to show me how I can make a lot of money from sourcing properties. He said he had made £167,000 last year as a property sourcer. I told him to prove it. He sent me a series of invoices as evidence and what looked like a bank statement. It all seemed legitimate until I dug deeper.
When I looked closer, I realised that what
he had presented as evidence of his income was his QuickBooks account statement. A QuickBooks statement is not the same as a bank statement.
While it is possible for you to link your bank account to your QuickBooks, you can also manually add income and expenditure to your QuickBooks account, and it can inflate or deflate the amount to show what you want people to see. You cannot do this with your bank statements, and that is why financial institutions generally want to see your last three-month bank statements and not a printout from your accounting software.
Upon discovering this, I gave him the benefit of the doubt. Granted, he may have inflated the figure to look a little more impressive than he is, and while that is disingenuous, if there is substance to his work, he is worth listening to.
I asked him about his company; because the invoices he sent me has three associated limited companies. So I checked on the company house, and all three limited companies are registered, but the company he claimed he made £167,000 from declared a dormant account to the company house recently. So I concluded that either he made £167,000 and decided to keep all the money to himself, and pay no taxes, while also painstakingly documenting the evidence of his tax evasion in his QuickBooks; for the HMRC to use against him in the future, or he is blatantly lying. Secondly, I checked the name registered as directors and shareholders on all the three companies he claimed to own, and it did not show his name on any of them. When I pressed him on this, he said he was a co-director, but this is a public record, and even if you are a co-director, you will show up on the company house register. At which point, he stopped responding to my messages.
By the end of our interactions, I had concluded, whether rightly or wrongly, that the invoices he presented most likely belonged to a company that he had very limited or no association with. I believed that he tried to pass it off as his own, hoping that I would be too impressed by his revenue to verify it; or thinking I wouldn't know how to, even if I wanted to. It is not my intention to throw shade at anyone's business, and nor am I saying that there are no genuine people out there who are willing to mentor and teach. All I am saying is that you do your due diligence before getting into bed with anyone. As an investor, it is okay to be sceptical; that should be your primary mode of operation. Investing is not about feelings. It is about facts. When someone makes a grandiose claim, you should know that you are not being rude by asking them to prove it, and always remember, you can lose money in any business venture, so exercise caution in your business affairs. I am still a true believer in the service accommodation industry, and for me, it has been lucrative, and for many who have devoted themselves to it, it has been a lifeline to a better life. I remain upbeat for the future and everyone in the industry. p.s I am sorry this isn't one of those fist-pumping piece, but I promise, I am a fun guy and in the future I will write something less jarring. Kind regards Franklin Folahan
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