am
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Post by am on Oct 9, 2017 22:14:23 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? Not necessarily. My father's house (grade II listed sandstone terrace) sold for £110,000; the recommended reinstatement reinsurance value was several times higher. Reinstatement insurance value is what it would cost to rebuild if the building was damaged beyond repair. The fire sale value depends on what income people think can be extracted from the property, less whatever discount they think they can get away with.
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am
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Post by am on Oct 9, 2017 22:23:27 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. I did. I counted ~85, not 100, but the borrower might plan to reconfigure the car park; I think there's scope for a more efficient layout. As part of the business plan I would like to see how they plan to extract income from the car park. Metered customer parking? Delivering stock might not be too much of a problem - I can visualise the traders driving up to a delivery bay, dropping off the stock, and driving away.
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jfm
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Post by jfm on Oct 9, 2017 22:24:47 GMT
... her son's company ... the incumbant office tenant for this building. Oh no - related company as a tenant - anyone remember "Tenanted Office Building Somerset"? Thanks MRC
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Post by Deleted on Oct 10, 2017 7:24:19 GMT
I think the core element is here
"Our valuation is based on the Schedule of Agreed Rents which has been provided. The schedule provided provides a gross rental income of £513,390 per annum, including the car park. We have deducted utility costs, management, insurance and maintenance costs in order to determine a net rental income of £440,000 per annum (rounded) which we have capitalised by a yield of 9% in order to determine the Market Value.Our yield is based on the risks and attributes associated with a management intensive property investment of this type. The proposed use is new and has not been established. Once the gross rental income has been determined over a period of 3 years the adopted yield may change to reflect income security. "
Note that this is management intensive (so I guess the son)
£440k is the max operating net rental income. Assume it is running at 70% makes the net more like 285,000 so would knock the value down from 4.9m to 3.1m so £2.37m is 76%.
I'll go in for this but to half my usual limit.
After reading Ed's comments I'm more positive, thanks.
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SteveT
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Post by SteveT on Oct 10, 2017 7:49:56 GMT
I'll go in for this but to half my usual limit. It's not often that you're braver than me, @bobo
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r1200gs
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Post by r1200gs on Oct 10, 2017 8:07:52 GMT
While the valuation seems legit, this is not passing my spidey senses test. Possibly because some aspects look suspiciously similar to another loan that also did not pass my spider senses test, and thank goodness for that. Sons, daughters, related companies as tenants, foreign residences and bases. No thanks.
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stevio
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Post by stevio on Oct 10, 2017 8:22:35 GMT
MoneyThing have you seen evidence of "pre-lets in place on rolling one month licenses totalling c£514,000 per annum of gross rent". I note that valuation states "Please note we have not been provided with copies of proposed the occupational agreements. Solicitors should formally verify the proposed rental income i.e £514,000 per annum (rounded) is correct."Would there be any documents you could add to the uploaded documents to support this? Have you any evidence this is sustainable income for the length of the loan? Should the business not provide the income forcasted, how else would the borrower support the interest payments?
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Post by MoneyThing on Oct 10, 2017 8:51:46 GMT
Morning,
Thank you for all your comments on this loan. We are just in the process of drafting up some supplementary information which we will be adding to the loan listing shortly (which should answer all the main points/queries covered here). We will email lenders once this information is available.
Kind regards,
Ed
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slush
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Here to learn. Please be gentle.
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Post by slush on Oct 10, 2017 9:07:18 GMT
While the valuation seems legit, this is not passing my spidey senses test. Possibly because some aspects look suspiciously similar to another loan that also did not pass my spider senses test, and thank goodness for that. Sons, daughters, related companies as tenants, foreign residences and bases. No thanks. Not one for me either as it failed my "sniff" test and hit my "whiff limit".
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registerme
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Post by registerme on Oct 10, 2017 9:22:44 GMT
Sensibly valued commercial property with evidence of income to service the debt costs, with transparent ownership and management, and a sensible exit plan. Yes please. This? Not so much at the moment. I would be very pleased if this changed .
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peteuk
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Post by peteuk on Oct 10, 2017 9:54:49 GMT
Not one for me ,rolling contracts no skin in the game, one months interest up front ,seems like one of those pop up pre christmass warehouses whats the borrower got to lose!
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hazellend
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Post by hazellend on Oct 10, 2017 10:05:06 GMT
Not one for me ,rolling contracts no skin in the game, one months interest up front ,seems like one of those pop up pre christmass warehouses whats the borrower got to lose! The property, assuming they do want to keep it.
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Post by Badly Drawn Stickman on Oct 10, 2017 10:34:43 GMT
Not one for me ,rolling contracts no skin in the game, one months interest up front ,seems like one of those pop up pre christmass warehouses whats the borrower got to lose! The property, assuming they do want to keep it. Which they have renovated and hopefully will bring jobs and prosperity to the surrounding area, I wish them every success. Sadly that doesn't inspire me enough to risk my money on the current offering.
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Post by westcountry on Oct 10, 2017 10:38:35 GMT
MT have uploaded their supplementary info onto the loan webpage, but haven't yet e-mailed round to inform lenders of this (well at least I haven't received an e-mail).
I'm not totally sure what to make of it - it looks encouraging, but I'm not sure whether it's sufficient to enable me to feel comfortable investing in the loan.
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btc
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Post by btc on Oct 10, 2017 10:50:36 GMT
MT have uploaded their supplementary info onto the loan webpage, but haven't yet e-mailed round to inform lenders of this (well at least I haven't received an e-mail). I'm not totally sure what to make of it - it looks encouraging, but I'm not sure whether it's sufficient to enable me to feel comfortable investing in the loan. email was sent a minute before your post
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