ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Jan 29, 2017 18:33:51 GMT
Can't see any postings on this one, thoughts people? Just put my toe in the water and considering more, unless one or more nasties turn up courtesy of one or more of you Sherlocks.
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ozboy
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Post by ozboy on Jan 30, 2017 21:20:51 GMT
Now a 1st Charge so arguably more palatable - duly bunged some more spondoolies in.
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This loan was initially posted as a second charge. In fact, the first charge holder will now be settled from the first tranche. Therefore this loan will now be secured on a first charge. As a result, the initial drawdown has increased from £250,000 to £400,000.
The first tranche of a facility of £1,000,000 secured by a 1st charge over a development site in L***** ** A***s valued at £5.5m
LTV is 17.7%
All tranches rank equally.
The loan is divided into tranches in order that they can drawdown as funds become available.
Loan will be repaid through sale. An offer of £3.6m has been received but refused.
Land in xxxxxxxxxxxxx
A redevelopment parcel in xxxxxxxxxx of 1.3 acres comprising 7 buildings with the reasonable expectation of planning permission being granted for construction of 114 apartments across 3 blocks.
The site is zoned for residential. A previous residential scheme for 20 houses was approved but never went ahead.
The site has been valued at £5,650,000
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max
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Post by max on Jan 31, 2017 10:19:27 GMT
I can see two distinct evaluations are provided - one dated 2012 for HSBC and the other dated 2017 for FS. HSBC valuation: 114 residential units at average Sale Price of £150,000 = 17 million; less total costs @ 11.5 million = 5.5 residual value FS valuation: 114 residential units at average Sale Price of £185,000 = 21 million; less total costs @ 15.4 million = 5.6 residual value If you mix and match you could obtain a residual value of 1.6 million. This is not meant to provide a more accurate estimate, but it is still a possibility. However, my main concern is that these residential units are going to be an unspecified mix of 1 and 2 bedroom flats according the the VR. It's hard to find flats being sold for the prices reported above and within a 1/2 miles radius. I find hard to conceive how the owner could have received and declined an offer to sell the site for 3.6m. Perhaps, the flats will be top notch and will sold according to the reported estimates, or perhaps not. Having said all the above - I've just made a (small) bid
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ozboy
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Post by ozboy on Jan 31, 2017 12:09:45 GMT
Thanks max, interesting. It's always difficult with these Loans unless we spend hours doing our own DD, which none of us has the time for on each Loan.
Given it's First Tranche and First Charge I'm in at just over four figures and going to leave it at that.
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stub8535
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personal opinions only. Not qualified to advise on investment products.
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Post by stub8535 on Jan 31, 2017 13:53:00 GMT
I wonder why one of the drawings shows boundaries different from all the others? Anyone got any idea?
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shimself
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Post by shimself on Jan 31, 2017 14:34:42 GMT
Can't see any postings on this one, thoughts people? Just put my toe in the water and considering more, unless one or more nasties turn up courtesy of one or more of you Sherlocks. I often wonder why a bank wouldn't go for a loan with 17% ltv. I've decided it's worth a K
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r1200gs
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Post by r1200gs on Jan 31, 2017 15:27:54 GMT
I don't really understand why it's not going faster, either. I've taken some as well. If this was on SS it would have been 50 times oversubscribed.
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ozboy
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Post by ozboy on Jan 31, 2017 15:58:08 GMT
Nope, me neither, I'm a bit bewildered, obvs everyone else has spotted something I've missed!
I hope not.
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Steerpike
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Post by Steerpike on Jan 31, 2017 16:20:44 GMT
Of course, this is the first tranche and so the LTV will not remain at 17%, and given concerns that the valuation may be over optimistic, and the absence of specific planning permission may be causing investors to hold back.
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duck
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Post by duck on Jan 31, 2017 16:37:26 GMT
Nope, me neither, I'm a bit bewildered, obvs everyone else has spotted something I've missed! I hope not. Not me, the site is at the weaker end of L****** and there was a charge that represented a 'challenge' .... this was sorted with the update. The site has needed redevelopment since @2007 and there have been 'schemes' that would never get off the ground and one residential scheme that could have worked but never got going (check local papers ) there is also a name 'involved' (extent unknown) who I see quite often when I search Companies House.
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lobster
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Post by lobster on Jan 31, 2017 17:32:49 GMT
Of course, this is the first tranche and so the LTV will not remain at 17%, and given concerns that the valuation may be over optimistic, and the absence of specific planning permission may be causing investors to hold back. This is indeed the first tranche, amounting to 400k . The total loan will be for 1m , against a valuation of 5.65m. The LTV of 17.7% is calculated by dividing 1m / 5.65m = 17.7% So why are you suggesting that the LTV will not remain at 17.7 % ?? Surely the size of the first tranche is irrelevant - it's the size of the total loan that matters. However, I fully agree regarding the absence of specific planning permission as yet.
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Steerpike
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Post by Steerpike on Jan 31, 2017 17:50:40 GMT
Of course, this is the first tranche and so the LTV will not remain at 17%, and given concerns that the valuation may be over optimistic, and the absence of specific planning permission may be causing investors to hold back. This is indeed the first tranche, amounting to 400k . The total loan will be for 1m , against a valuation of 5.65m. The LTV of 17.7% is calculated by dividing 1m / 5.65m = 17.7% So why are you suggesting that the LTV will not remain at 17.7 % ?? Surely the size of the first tranche is irrelevant - it's the size of the total loan that matters. However, I fully agree regarding the absence of specific planning permission as yet. It appears that you are correct, given the total development costs I had ass-u-med that the total loan would be much more than £1m.
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Post by d_saver on Jan 31, 2017 18:35:57 GMT
This is indeed the first tranche, amounting to 400k . The total loan will be for 1m , against a valuation of 5.65m. The LTV of 17.7% is calculated by dividing 1m / 5.65m = 17.7% So why are you suggesting that the LTV will not remain at 17.7 % ?? Surely the size of the first tranche is irrelevant - it's the size of the total loan that matters. However, I fully agree regarding the absence of specific planning permission as yet. It appears that you are correct, given the total development costs I had ass-u-med that the total loan would be much more than £1m. I wasn't sure the loan was being used for the development, but planning, maybe clearing the site and then resale of the site to a developer? " Loan will be repaid through sale. An offer of £3.6m has been received but refused." Though the valuation is based on the development plans, I'm not sure the loan is being used for full development development of the site? The exit plan is not clear to me.
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09dolphin
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Post by 09dolphin on Jan 31, 2017 19:04:41 GMT
The details also seems a little convoluted or confused to me. The LTV is it's selling point and made it a "must have" for me. At that LTV I haven't actually bothered doing any DD as it seems it would be pointless. Even as an allotment or camp site I think the land is likely to be worth the sum requested.
I've put all I intend to invest into this tranche. Am unlikely to put anymore into future tranches, unless I find I have money in the pot that's looking for a home.
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lobster
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Post by lobster on Jan 31, 2017 19:05:56 GMT
It appears that you are correct, given the total development costs I had ass-u-med that the total loan would be much more than £1m. I wasn't sure the loan was being used for the development, but planning, maybe clearing the site and then resale of the site to a developer? " Loan will be repaid through sale. An offer of £3.6m has been received but refused." Though the valuation is based on the development plans, I'm not sure the loan is being used for full development development of the site? The exit plan is not clear to me. The figures on page 8 of the valuation report suggest that the value of the developed site will be approx 21m. Also on page 8 it says the total cost of the development is approx 15.4m , so there is a profit there of 21 - 15.4 = 5.6m approx , and this is basically the quoted valuation.
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