ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Feb 3, 2017 16:52:26 GMT
"I am also not chuffed that I have had to find out most of this for myself," - you're not on your own there micdic.
Thank you for this further information.
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mikes1531
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Post by mikes1531 on Feb 3, 2017 18:34:09 GMT
This is 50% guesswork, but it shows how a seemingly stunning asset could become a pig-in-a-poke very quickly, with developers (purchasers) shying away. It does illustrate quite clearly how relatively small changes in assumptions can have major effects on the resulting valuation. The land value of a development project usually is calculated as the difference between two large numbers -- the GDV, and the cost to develop. As a result, a seemingly small percentage change in one or the other of those two numbers will have a greatly magnified impact on that difference.
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ding
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Post by ding on Jun 19, 2017 9:59:27 GMT
A 3rd tranch for the Lytham loan. Site picture is the same as the previous 2 tranches (old buildings). Tranch 2 update says "Borrower has applied to the council for road closure so that buildings can be demolished" Tranch 3 "The purpose of the facility is to part-fund the purchase of other development land." Erm - ?!? Will pass.
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rogerthat
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Post by rogerthat on Nov 3, 2017 14:39:02 GMT
Have asked the question in chat..awaiting an answer...this might be a quicker way...any opinions ?
' the site is currently valued at £5.65m but is based on 114 apartments (it says that in the asset tab ) but the architects are discussing a revised smaller plan of 105 apartments (it says that also) if the revised plan is given the green light, wont the 'value' be less than £5.65m and hence the LTV be higher ? (50.4%)
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adrian77
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Post by adrian77 on Nov 3, 2017 16:11:35 GMT
To me the costs look on the low side and the valuation on the high side although the infrastructure/legal budget etc looks reasonable to me. There is not even approved final planning yet and no mention of a s106 planning requirement and I think the chance of the council not asking for something back is slim...I also note the original plan was shelved; "This scheme never proceeded due to objections from residents".Well however much did that cost in legal and planning fees etc. To be honest I wonder if "pawning" property at such a relative high rate of interest is a sustainable business model as e.g. 20% goes in interest charges alone so any developer has to make 20% on cash expenditure just to break even and believe me developing is not like "Homes under the Hammer" ! The costs show finance at 4.5% being £1.3m - this is a perfectly valid figure but not what this chap is currently paying.
Looks to as if the LTV will increase somewhat once this project gets underway- granted the developer may quickly get full planning and roll it over but I think he is cutting it fine so I won't be investing- it always worries me when I see a development with so much borrowed money at such an early stage, Also I don't like residual valuations as I have found in practice costs can be much higher than projected and there is always, always some unexpected problem...
As I have said before if this is such a cash-cow then why can't the developer borrower at vastly cheaper rates...
In reply to Rogerthat I would say "YES".
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rogerthat
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Post by rogerthat on Nov 3, 2017 16:34:18 GMT
I note there is an amendment to my point raised now and the 'reasoning' behind that..but this facility still ranks behind all other facilities so no need to go overboard.
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rs
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Post by rs on Nov 3, 2017 17:30:59 GMT
I note there is an amendment to my point raised now and the 'reasoning' behind that..but this facility still ranks behind all other facilities so no need to go overboard. I suspect his will still get 100% funded as lots of IFISA cash who are all hoping on selling on SM after 4 months.
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adrian77
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Post by adrian77 on Nov 4, 2017 17:55:21 GMT
currently we have available Loan Ref: 840060**** - Land in L***** St A**** - 4th facility
with the comments
Checking my account I note I am already in this loan as I have L***** St A**** - 4th tranche (15559****) due to end 31/08/17 with the comments
Has the plot been split into 2 or what (it's the same photo!) - whatever I am not happy as I don't think FS have been very clear. Is loan for 15559**** about to be redeemed - the following relates to loan 15559***
it is well past 07/09/17 + 2 weeks -- we have heard that one before!
I bought this loan on the SM as I expected it to be redeemed but all what seems to be happening is that this borrower is ploughing on with borrowing even more money?
one minute I am reading that my loan is the final tranche of £1m and the next minute
looks to me as if the borrower said he would redeem the first loan but hasn't ?
At least the latest loan ranks behind this first one!
this site is 1.3 acres so I don't think the plot value (not residual value) is anywhere near £2.85m
I am really not happy - anybody think I am being unreasonable?
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SteveT
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Post by SteveT on Nov 4, 2017 18:57:33 GMT
Your loan is “The fourth and final tranche of a facility of £1,000,000 secured by a 1st charge“. That doesn’t mean there won’t be further facilities extended that rank lower. FS do this all the time.
I think the whole facility (or at least the first tranche of it) is due now to be renewed on Monday
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adrian77
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Post by adrian77 on Nov 5, 2017 9:02:37 GMT
below is reply to my post which I originally posted to the wrong thread : quel slaphead !
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adrian77
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Post by adrian77 on Nov 5, 2017 9:03:35 GMT
I never knew that - interesting so thanks for that
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p2pmark
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Post by p2pmark on Nov 11, 2017 22:24:49 GMT
Note that according to the valuation report: "it is clear that the site will receive Planning Consent for Residential Re-development Use.... albeit a detailed Planning Appreciation with appropriate drawings is not currently before the Local planning Authority".
So it seems that getting planning permission of some kind shouldn't be an issue. The bigger risk probably relates to cost overruns as, and is usual for developments, the valuation is very sensitive to costs.
The first ranked loan is coming up for renewal and looks much better than the later loans to me - the much lower LTV more than compensates for the slightly lower return IMO.
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rogerthat
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Post by rogerthat on Nov 11, 2017 22:44:12 GMT
And..it seems on Sunday morning...
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mikes1531
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Post by mikes1531 on Nov 12, 2017 16:16:22 GMT
It seems that only half of the investors in the first tranche (£400k) of the first facility loan opted to roll their investments forward. £600k more of that facility to renew, presumably pretty soon since it's overdue, so there ought to be lots of opportunity to invest.
The tranche took a little while to fill, but that might have been more the result of the banking difficulties FS had receiving deposits than lack of appetite from investors. We'll see how quickly the remaining first facility tranches are funded. If not very quickly, that may not bode well for the renewal of the lower ranking facilities, some of which are overdue already.
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micky
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Post by micky on Nov 12, 2017 19:07:44 GMT
Hopefully, the payment 'will cover interest for all loans' will cover the interest on the second facility as well; which is still secured by the 1st Charge.
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