Jim Moore on the future of IAP Global

Entrepreneur and international property investor Jim Moore has recently put his money where his mouth is and rescued the UK’s largest residential investment company from Administrators. Here we asks Jim what led to the demise of Instant Access Properties and what the future holds for the new venture, IAP Global.

A Jim Moore interview is a rare occurrence these days so I thought I would start with a look back at what some have described as a colourful and yet highly successful career.

Asking him about his road to success, I wanted to know about his “pyramid perfume business” whence he first came to public prominence - a business which turned over $250 million in 6 ½ years and expanded into 7 countries.

“I think pyramid selling is a popular description for anybody that wants to cast aspersions on something. The truth of the matter is, I was involved in a very successful selling business that was modeled on a combination of Avon, Virgin Vie and Ann Summers.

“Although it was a business that operated some 15 years ago, let’s not forget the business addressed a market need. At that time you couldn’t buy perfume on the grey market, it wasn’t sold in supermarkets, people wanted value for money and that’s what we offered. A principle of business I have tried to install throughout my career.

“Every business I’ve been in has been a response to people asking me or telling me that that business should exist. The original IAP existed because people didn’t have the time to do it themselves. It was a result of people asking if we could go and find attractive investment opportunities and that is what we did – and once the market settles down, that’s what we will do again”.

More recently, Moore was responsible for developing Inside Track, one of the most successful and well known educational property seminar businesses the UK. The business folded in early 2008 as the “buy to let” market was hit by the credit crunch and prevailing market conditions. I was keen to find out why and how Moore reacted to being called ‘Mr Buy to Let’ – a title banded about because of the large number of his clients who have bought into this sector.

“Inside Track was all about teaching people 6 to 8 different ways to make money from property. The ‘Buy to Let’ component of the course was just one element of the overall seminar. It was regretful that the business folded but is a sad reflection of the market we find ourselves in. My dilemma was that I couldn’t make people do what I had just shown them. I told people in no uncertain terms that property investment is for the long term. People ought to have created a basket of opportunity that will have hedged their own investments as a matter of course”.

In defense of the principle of ‘Buy to Let’ Moore added “I’m not on the side of the developer. Let’s be frank, the developers did what the government told them they could do. So they went ahead and did it. Of course, what that created was a shortage of land in the inner cities which pushed the price of land up. This ultimately pushed the price of property up. No-one can really blame anyone except the government for publishing planning policy guideline 3 which said, thou shall develop brown field sites, you know ones which have buildings on them or had a prior use”.

Our conversation turns to the formation IAP Global. I asked Moore what the new business is designed to do and wanted to find out if it was just the same company with a different badge.

“IAP Global is designed to help people to complete on any properties that they’ve purchased through Instant Access Properties, to act as the interface between the client and the developer. In other words, it’s finalizing those sales, making sure that any paperwork is pursued, giving the client comfort and putting all the pieces together that would pose that client difficulty.

“Going forward, the difference between the two businesses will be that IAP Global will focus on current market trends and on showing people different types of products to invest in, from funds and regulated products to a whole variety of things that might help people have a broader spread of property investment”.

But what about his advice on property investment in today’s climate, Moore was clear, “I would say to people not to rely on their salary or government pension, but to look for multiple ways to secure their future. Right now I’d be looking internationally to emerging markets like Brazil where property investment is a major growth area. I would be looking to advise them to buy into SIPPS so that they can get tax back. I would be looking at the fact that the UK has a housing shortage as a result of the current turn off of development, I would tell people not to turn the lights out on Britain’s property sector just yet”.

I was interested to know why a new company was formed and why the existing company couldn’t continue to ride these difficult trading conditions.

Moore was quick to point out that the shareholders of the original business had collectively put up £4 million to support the original IAP. Soon after it was clear that IAP wasn’t receiving enough fees, thanks to the banks, to continue operating and those same shareholders didn’t have the appetite for further investment. Moore, on the other hand felt he had a sense of duty.

“I couldn’t make the shareholders put their hands in their pockets so, rather than getting in a protracted fight with them about rights issues and so on (which incidentally I actually tried to do but that in itself proved difficult), I regretfully had to let the business slip into administration.

“I have subsequently put my own money on the table to take forward the parts of the business that would help people complete on contracts. I personally looked at the fact that we had thousands of people who hadn’t completed and were going through the process and I felt that I should do what I could to help them – and that is what I am doing.”

Moore won’t we drawn on the exact figure he has put on the table to rescue IAP, “the fact is it’s less about what I have invested, it’s the fact that I have got to pay the salaries of all the people who work for me, the premises, computers, it’s my money paying to keep people in the company every day of the week. That in itself works out at over a million pounds a year”.

Moore is quick to point out that he doesn’t expect to make money in the short term from the new business. “You have got to reflect back on why I’m doing this. I’m doing this because I wanted to support the clients that are in the process of trying to exchange and complete on their properties. Yet as businessmen, of course I recognize that if I take care of these people and I do a good job, they will realize this and when the market turns round, as it will, they will wish to invest again. So I would hope that they come back and buy from me again and that we can all make a profit”.

Moore will not be involved in the day-to-day management of the new business. That job he has handed to Tony McKay who has been at his side for some 4 years. Moore’s role will continue to be on an advisory basis but he clearly believes in its chances for success. “I still believe in the business, and that property investment is one of the best ways to make money. For that reason I am going to try as best as I can to keep this business going”.

Moore is quite bullish about his critics who point to a small number of people who have not made as much as they would have hoped on investments his company presented. “I’m prepared to accept that some people, especially in this marketplace, are aggrieved that prices have gone down. The problem in this marketplace is many people are looking for someone to blame, so I can accept they may feel aggrieved. At times like this there’s always a strong argument to sit on your hands or sit on your money and keep your powder dry.

“I think it’s important to recognize, there is only really two ways to make money - one’s with stress, the other is from growth. You have to ask yourself, are you going to sit paralyzed by your own fear or are you going to do something about it?

“Hopefully, people know that when they capitalize on a market like this and believe it or not that is possible, you can buy something in a growth area. My advice to anybody would be at some point in their life they have to step outside of their comfort zone and take calculated risks, in my view this is the time if you want to buy something under value.

“People have come to realize recently that is it wasn’t the comfort zone that they thought it was. People who had stocks and shares invested in blue chip companies and who thought that whilst the upside might not be as good as a property, there was no down side. Well, they were wrong! My advice is to spread investments, and to absolutely always consider property. Yet to use their own judgment, as well as that of others. Do not suspend your own judgment, use your judgment”.

Leaving the last word to Moore on where next, “well I would like to see that we’ve got our clients through this immediate crisis and have helped complete on properties that have started to regain value and achieve the kind of prices that they hope for and anticipated - to lead them into a new forward thinking space where new ideas for property investment complements the more traditional kinds of investment. Let’s not forget that that was the original reason for me getting into this business”.

“The truth is it’s a very difficult time right now, but sitting still and doing nothing is unlikely to solve it. The gift of it is if we can overcome our own fear and rationale just to sit on our hands, then there are some great opportunities out there, very deep discounts and of course when the market comes back, those deep discounts can represent immediate profit… or immediate gain.

Now, one’s got to ask oneself, you know, has one got the appetite and resource to do that right now in this environment or would you prefer to wait and run with the pack?

I’ve always found that contrarian thinking and contrarian investing, to coin the words of Warren Buffet, I think, wasn’t it him who said I’ll tell you how to get rich. Be greedy when everyone is fearful and be fearful when everyone else is greedy. I think the same applies where we are right now”.