hazellend
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Post by hazellend on Oct 9, 2017 18:37:25 GMT
This scenario appears to have been provided, i.e. the vacant possession value as copied below. £3,600,000 - Market Value as existing assuming full vacant possession and assuming a sale to be completed within 180 days. I think this is taking rental income into account, which to be fair is not guaranteed income. No, it's the full vacant possession valuation. The valuation gives rented and vacant values, for normal and 180 day sales.
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fp
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Post by fp on Oct 9, 2017 18:42:57 GMT
I think this is taking rental income into account, which to be fair is not guaranteed income. No, it's the full vacant possession valuation. The valuation gives rented and vacant values, for normal and 180 day sales. It would be interesting to know how much they paid D***d Le**h for the property then, who coincidentally is linked to the borrowers wife via another company "shift-shed" (think about it) which is now in liquidation. Something tells me it will be nowhere near the valuation of £3.6m
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hazellend
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Post by hazellend on Oct 9, 2017 18:51:13 GMT
No, it's the full vacant possession valuation. The valuation gives rented and vacant values, for normal and 180 day sales. It would be interesting to know how much they paid D***d Le**h for the property then, who coincidentally is linked to the borrowers wife via another company "shift-shed" (think about it) which is now in liquidation. Something tells me it will be nowhere near the valuation of £3.6m Yea I doubt it. We would really need to know what the original company paid for it too. I'm still happy enough with the security at the stated LTV
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am
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Post by am on Oct 9, 2017 19:29:26 GMT
I think this is taking rental income into account, which to be fair is not guaranteed income. No, it's the full vacant possession valuation. The valuation gives rented and vacant values, for normal and 180 day sales. Unless I've missed something no justification has been given for the vacant possession valuation. If it turns out that the proposed business is not viable, and it has to be sold, presumably it has to be sold for another use. This might involve planning costs; it almost certainly involves costs reconfiguring the property. You'd need a discount on the value of the property in its new usage to cover that. stokeloans : what happened to the old Sainsburys site in Newcastle? what I know is that it stood empty for some years before being demolished. (This might have some bearing on the marketability of sites in Newcastle.)
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stokeloans
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Post by stokeloans on Oct 9, 2017 19:42:56 GMT
No, it's the full vacant possession valuation. The valuation gives rented and vacant values, for normal and 180 day sales. Unless I've missed something no justification has been given for the vacant possession valuation. If it turns out that the proposed business is not viable, and it has to be sold, presumably it has to be sold for another use. This might involve planning costs; it almost certainly involves costs reconfiguring the property. stokeloans : what happened to the old Sainsburys site in Newcastle? what I know is that it stood empty for some years before being demolished. (This might have some bearing on the marketability of sites in Newcastle.) It's going to be a combination of retail units and student accommodation.... yes more student flats !!!! The adjacent civic offices building is being demolished as part of the development.The council have knocked down a school and are finishing off a new office block for their staff including a new library.... the current library is up for development....pretty much opposite the Lendy ****** building . It's all happening in Newcastle under lyme ☺️ Remember the old Maxim's nightclub ? That's just been extended and converted into a care home
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hazellend
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Post by hazellend on Oct 9, 2017 20:44:47 GMT
Evening ianj , if I may digress for a moment from the theme of this one of our newest forum threads I'd just like to thank you for illustrating what it may mean for everyone here if and it's a hopeful if a redefining of relationships can be worked through in an unassuming spirit acceptance and inclusiveness. I wish you well and thank you for making the Due Dill 1st post beginning this a new conversation. All the best, James. ??
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Post by Badly Drawn Stickman on Oct 9, 2017 20:54:33 GMT
Only one month up front, the remaining interest payments and exit strategy both heavily dependent on the business running close to maximum efficiency from the off. Potentially long hard slog to sell on as a failed enterprise. Guess thats why it's paying 13%, assuming we get to see it on month 2.
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stokeloans
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Post by stokeloans on Oct 9, 2017 21:22:46 GMT
From what I've read so far I'll need further persuasion to invest....a site visit seems in order
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Nomad
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Post by Nomad on Oct 9, 2017 21:34:39 GMT
Only one month up front, the remaining interest payments and exit strategy both heavily dependent on the business running close to maximum efficiency from the off. Potentially long hard slog to sell on as a failed enterprise. Guess thats why it's paying 13%, assuming we get to see it on month 2. I can't see them having anywhere near 400 dealers signed up in month 1. Many people will want to wait and see how the place shapes up first. Many of the dealers who take up small units will be hobbyists and part-timers. In my experience, most won't be willing to commit to more than a month-to-month rental. If trade is quiet, or the economy deteriorates, many are likely to pack it in.
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hazellend
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Post by hazellend on Oct 9, 2017 21:36:16 GMT
"We are not aware of the current level of building reinstatement insurance cover
and therefore cannot comment upon the adequacy of the same. However, we
would recommend that the building be insured for a minimum sum of
£3,500,000 (three million five hundred thousand pounds) in its present
condition. This sum allows for demolition, site clearance, full reinstatement,
professional fees, but excludes loss of rent provision and any allowance for
inflation, and should accordingly be updated on an annual basis to keep pace
with rising costs. "
Can insurance reinstatement cover give any further reassurance as to the fire sale value?
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Post by mrclondon on Oct 9, 2017 21:40:36 GMT
Further digging at companies house has revealed that the director of what is presumably the eventual operating company (the antiques thingy) is the wife of the borrowing company director, and unsurprisingly she is also a resident of Monaco. The loan proposal doesn't shed any light on how this operating company will operate on a day to day basis, which given it will be the source of the funds to service the debt is unfortunate. Does Mrs split her time between the UK and Monaco ? What is the headcount ? If Mrs isn't involved at the day to day level, who is ? Her son maybe ?
Mrs is the director of another company, which is currently heading through administration/liquidation. The main assets of which were bought by her son's company ... the incumbant office tenant for this building. Administrators 1st report makes for an interesting read.
The 13% yield is clearly a pointer that this is an above average risk proposition, but even so there are a few too many unknowns for me here.
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stokeloans
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Post by stokeloans on Oct 9, 2017 21:41:15 GMT
Only one month up front, the remaining interest payments and exit strategy both heavily dependent on the business running close to maximum efficiency from the off. Potentially long hard slog to sell on as a failed enterprise. Guess thats why it's paying 13%, assuming we get to see it on month 2. I can't see them having anywhere near 400 dealers signed up in month 1. Many people will want to wait and see how the place shapes up first. Many of the dealers who take up small units will be hobbyists and part-timers. In my experience, most won't be willing to commit to more than a month-to-month rental. If trade is quiet, or the economy deteriorates, many are likely to pack it in. In a lot of these places you can rent as little as a single cabinet
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seeingred
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Post by seeingred on Oct 9, 2017 21:46:34 GMT
400 dealers and small businesses doing precisely what?
And with what target number of customers within a sensible radius, excluding those who come for an initial poke about on days one to seven?
A critical mass of occupied units would be essential to attract people in sensible numbers, week after week. How many of the 400 units are presently allocated - even for a month?
I have absolutely no feel for the market potential here - if it was an old iconic building being converted to housing in an area where such housing was in demand, then fair enough. Always happy to support reuse of a good old building. Not convinced of the business case here.
Either very successful or it flops. What is the inherent value if it flops?
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Post by Badly Drawn Stickman on Oct 9, 2017 22:06:27 GMT
400 dealers and small businesses doing precisely what? And with what target number of customers within a sensible radius, excluding those who come for an initial poke about on days one to seven? A critical mass of occupied units would be essential to attract people in sensible numbers, week after week. How many of the 400 units are presently allocated - even for a month? Maybe somebody should count the car park spaces. Unless the traders bring new stock in a wheelbarrow, and customers all live within walking distance.
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GeorgeT
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Post by GeorgeT on Oct 9, 2017 22:11:30 GMT
Only one month up front, the remaining interest payments and exit strategy both heavily dependent on the business running close to maximum efficiency from the off. Potentially long hard slog to sell on as a failed enterprise. Guess thats why it's paying 13%, assuming we get to see it on month 2. My main concern is that only the first month's interest is going to be held up front and then from month 2 the risk starts and it could,potentially, be an early defaulter or it could be a great loan paying 13% for many months to come and be repaid in full on time. Unfortunately the lack of almost guaranteed interest from month 2 onwards is a big negative for me and my investment strategy. I would have to be very satisfied about the overall proposition in order to invest big in such a loan. Because it is MT and 13% I think I will have a punt on this one but I will keep my investment in 3 figures.
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