GeorgeT
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Post by GeorgeT on Nov 28, 2017 15:08:51 GMT
BL00078 - Development Site at H********* Road, Blackburn
Security Value: £2,700,000 Loan Amount: £1,890,000 (Split into 4 tranches of £472,500) % PA: 12% (+ cashback on primary market) Loan to Value (LTV): 70% Loan Start Date: 28/11/2017 Term: 366 days (6 months' interest paid upfront)
Exit strategy: Depending on whether COL do the development finance the exit will change. The borrower may refinance the loan prior to the development stage which would be a refinance exit, alternatively if COL do the development the exit will be by way of sales of the properties.
Security: The loan security is the land with planning for a residential development consisting of 79 dwellings with a valuation of £2,700,000 and a GDV of £15,010,000 on completion of proposed planning and development.
Note: The borrower is paying £1,600,000 plus vat, stamp duty and legal fees bringing it to around £2,100,000 negotiating with the agents to buy the site undervalue. The site has been to auction with a lower guide price which was set to attract buyers to the auction. The reserve was not met because this was significantly higher than the guide price and often high price development sites struggle to sell at auction. The site has previously been marketed at £4.5m. The land has been independently valued at £2.7m.
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sj
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Post by sj on Nov 28, 2017 15:40:40 GMT
I'm struggling to see how the "real world" LTV is 70% if the buyer has only paid £1.6 mil for it. I think any prospective buyers in the case of a default would pay attention to that figure more than what it is valued at - what are the chances of a full recovery if it does go belly-up? Speaking of which, I wonder what the reasoning behind marketing it at £4.5 mil was, if it was valued at far less?
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GeorgeT
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Post by GeorgeT on Nov 28, 2017 16:01:12 GMT
I struggle consistently with the frequent claims from P2P platforms that the purchase price should be ignored because the borrower has bought it undervalue. This is often used to indicate a lower LTV and keep within the claimed 70% limit.
If something has been marketed properly and for a proper period of time and there is a willing buyer and willing seller, who are not connected, then the price they negotiate and are both prepared to deal at, is - by definition - the 'market value' as at the date of the sale.
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sj
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Post by sj on Nov 28, 2017 16:14:14 GMT
Exactly! If I was looking at buying a house that I knew the owner had bought recently for £160k, and his asking price was £270k, then i'd tell the owner to do one! And i'm not going to pretend that this land would be any different, so i'm out on the basis of the "real life" LTV being too high (>100% in fact)
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Nov 28, 2017 16:15:34 GMT
You, me, and everyone else on here knows exactly why all the Platforms play this Game georget, we all struggle with how we're treated like idiots.
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boundah
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Post by boundah on Nov 28, 2017 16:23:13 GMT
From the VR: 'The property has previously been offered for sale on the open market with a guide price of £4.5 million, however, it has recently been reduced with an asking price of “Offers in Excess of £1.2 million”.'
But valued at 2.7m?
They're living in the land of the cloud cuckoo (IMHO obviously).
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Post by Badly Drawn Stickman on Nov 28, 2017 16:27:09 GMT
You, me, and everyone else on here knows exactly why all the Platforms play this Game georget, we all struggle with how we're treated like idiots. I have pretty much mastered the being treated as an Idiot thing. Personally without any research at all I know I won't be having anything to do with this one. I'm happy to be treated as an Idiot, but strongly resent being treated unfairly. Its either the same cashback for all or none at all and a proper rate.
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madpierre
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Post by madpierre on Nov 28, 2017 16:34:19 GMT
I imagine the borrower is delighted to have been offered a loan of £1.89m for this project and the potential of funding every step of the way. This will be a very low risk development.... for the borrower
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Post by eascogo on Nov 28, 2017 16:34:42 GMT
You, me, and everyone else on here knows exactly why all the Platforms play this Game georget, we all struggle with how we're treated like idiots. On the other hand how many p2p platform indicate how much the borrower paid for the goodies? So COL is just that little bit more honest than the rest.
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Nov 28, 2017 16:40:44 GMT
I'm worn out on this broken record. DO something about it Fellow Investors, or put up with the barrage of lies and BS shovelled onto and burying us regularly.
I'm not aware of such crass information being allowed in any other form of Investment, WHY does P2P get away with it?!!!!!!!
This is a General Comment and NOT a direct comment on or about Collateral.
(Sighs heavily and slinks away for a coldie from the fridge.)
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Post by mrclondon on Nov 28, 2017 16:49:27 GMT
From the loan details "The site extends to approximately 8.5 acres and is currently unoccupied and overgrown. The borrower is paying £1,600,000 plus vat, stamp duty and legal fees bringing it to around £2,100,000" (Loan is for £1,890,000 vs valuation of £2,700,000) Applying my usual sense check of the government published typical land values to development land valuations, Blackburn with Darwen council area consented residential development land is suggested to be c. £665k / hectare (2015 figures), so at 3.44 hectares the site value would be c. £2.3m (implying LTV of 82%). EDIT: By the same measure, the Darwen site owned by the same borrower came out at c. 170% LTV.
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Post by genialharry on Nov 28, 2017 17:03:18 GMT
I have got some of the other two loansof mr bu***n but i want col to find out when he will start the work on the other ones darwen and Waveledge. I saw the other day that the goverment is going to crack down on developer's who stock pile land and dont evn build houses with permission theyve already got Lets hope this developer does not get compulsorly purchased for not building perhaps i will buy some of this one on the SM when work actualy starts and development loans appear if they are seperate.
harry g
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msenanna
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Post by msenanna on Nov 28, 2017 17:28:14 GMT
As I can't even get onto Collateral website due to the Avast/AVG issue I won't be participating in this loan so I will watch from the wings over the coming months.
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Post by mrclondon on Nov 28, 2017 17:37:58 GMT
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Post by mrclondon on Nov 28, 2017 18:55:20 GMT
The planning application referenced on page 2 of the VR ( Blackburn Planning Search or direct link on DD Central) has various documents attached. The (May 2007) Planning Statement states (para 2.2) that the site is a disused quarry that has lain vacant for 40 years [now 50 years] and is covered in poor quality scrub vegetation. The document called 'Amended Merged' is the planning application form and various associated documents, including on page 10 a site plan which also features the 'public open space' which might be where the extra homes are hoped to go. My major concern about this borrower and all the development sites that COL are funding (currently Darwen, Burnley & Great Harwood) is he is buying up plots of land that no-one else has been able to make a financial success of over many years, in a fairly depressed part of the country (mostly with our money). Whilst his aim of founding a new residential property developing group ('brand name') is almost certainly noble and well intentioned, I'm just (very) sceptical that he has the experience to pull this off on the scale he is intending.
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