hazellend
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Post by hazellend on Feb 28, 2018 14:24:46 GMT
Unfortunate name given today’s events
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poppyland
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Post by poppyland on Feb 28, 2018 14:34:00 GMT
After problems on other platforms I was almost resolved not to invest in property loans again, but as this is Ablrate (= more trustworthy than most), and the loan is amortising and based on a profitable business, it looks good to me. What do other people think?
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KoR_Wraith
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Post by KoR_Wraith on Feb 28, 2018 14:55:10 GMT
A quick google shows this property was previously marketed for £175,000.
The valuation repeatedly refers to projected profits (£140,000 EBITA in the first year) as the basis of the fair market valuation.
Looks more like a business loan than a secured property loan to me, quite speculative given the lack of trading history to support the valuation.
On the plus side it's amortising and numerous upgrades have presumably been carried out since the £175,000 marketing period.
I look forward to any further details others can discover, however, I'm not feeling super comfortable with this one at the moment.
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nick
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Post by nick on Feb 28, 2018 15:12:35 GMT
A quick google shows this property was previously marketed for £175,000. The valuation repeatedly refers to projected profits (£140,000 EBITA in the first year) as the basis of the fair market valuation. Looks more like a business loan than a secured property loan to me, quite speculative given the lack of trading history to support the valuation. On the plus side it's amortising and numerous upgrades have presumably been carried out since the £175,000 marketing period. I look forward to any further details others can discover, however, I'm not feeling super comfortable with this one at the moment. This is a pub so the valuation is going to be very dependent on trade. In the absence of any historic trading history (post refurb) it is going to be fairly speculative. However, Bur***ngho**e do have have a strong track record in delivering operational performance and I have only had positive experiences when previously lending to various of their ventures on this and other platforms (ie they haven't defaulted and have always paid on time).
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blender
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Post by blender on Feb 28, 2018 15:15:30 GMT
Thank you Ablrate for this new loan opportunity. I expect to contribute the spare cash. One slightly technical question about the documents which is worrying me, please. In the Borrowing Proposal, Key Terms, there is a minimum term stated of 24 months, as in the email. But this does not seem to be reflected in the Loan Terms, which is our agreement with the Borrower. There is no mention of the 24 months minimum, nor more specifically of any guaranteed interest period, which I assume is the same thing and which has to be noted in the Loan Terms according to 7.4. How is the 24 month minimum period contained in the agreement with the Borrower please? I am not sure we could rely on the note in the key terms only. This may be my poor understanding, because exactly the same situation exists with loan 96, which I did mention on the forum but did not follow up.
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blender
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Post by blender on Feb 28, 2018 15:35:23 GMT
A quick google shows this property was previously marketed for £175,000. The valuation repeatedly refers to projected profits (£140,000 EBITA in the first year) as the basis of the fair market valuation. Looks more like a business loan than a secured property loan to me, quite speculative given the lack of trading history to support the valuation. On the plus side it's amortising and numerous upgrades have presumably been carried out since the £175,000 marketing period. I look forward to any further details others can discover, however, I'm not feeling super comfortable with this one at the moment. I think that is a good assessment. The valuation is effectively at least two years in the future, when a business trading record has been established. But the rate being paid overall reflects that, I think. We can rely on the bricks and mortar for some security, but it seems a case where the involvement and additional guarantees of serious people, who have the track record, will count for something with me. Sorry I did not read nick and seem to be repeating - we seem to agree.
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invester
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Post by invester on Feb 28, 2018 15:48:23 GMT
Assuming they acquired for £175,000, does that mean they have spent c.£300k refurbishing it already? And are there any shots of said refurbishment? All the ones I see are CGI images, and the download only shows the bar area.
It seems a good site for a hotel but seeing as there are similar hotels that are well reviewed in the vicinity priced at £30 a night are the profit margins going to be there?
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boundah
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Post by boundah on Feb 28, 2018 15:55:05 GMT
I'm a bit cautious on pubs given the rate of closure over the last few years. And the valuation of this one is based largely on presumably rosy projections of trade, with (if I've read the docs correctly) a little bit of work left to do before opening.
On the positive side, it's secured by first charge over bricks-and-mortar and guarantees from what seem like fairly solid company/personal assets. Location seems good (opposite railway station in salubrious area) and management have a decent track record.
On balance: I'm in unless further digging or comments here unearth anything more worrying.
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elliotn
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Post by elliotn on Feb 28, 2018 16:06:30 GMT
Assuming they acquired for £175,000, does that mean they have spent c.£300k refurbishing it already? And are there any shots of said refurbishment? All the ones I see are CGI images, and the download only shows the bar area. It seems a good site for a hotel but seeing as there are similar hotels that are well reviewed in the vicinity priced at £30 a night are the profit margins going to be there? BP mentioned 434k of refurb. It's being run as a pub, the flat above is on 999 leasehold.
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eeyore
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Post by eeyore on Feb 28, 2018 16:33:29 GMT
I've walked past this property many times over the last forty-odd years when my partner and I have returned to Southport to visit her mother. The location is alongside the railway station and its car park - the station's main entrance is on Chapel Street; the principal tourist attractions (Lord Street and the Promenade) are to the north-west. The majority of passers-by are walking between the town centre and the ASDA & associated retail units car park to the south-east at the end of London Road.
To my recollection, the pub has always been sad and run-down, pretty much in accordance with the surveyor's photographs in the valuation report. What I found surprising is that image presented in the sales brochure showing a crowd outside the pub - I've never seen anyone outside the A**** Hotel or indeed anyone entering or leaving it; my partner speculated that the brochure photograph was taken on Orange Day when the Ulster unionists of Merseyside have gathered for their annual parade through Southport.
I'd love to make an investment in this project but, once again, the valuation doesn't inspire confidence. The sales brochure in the valuation report shows that the property was offered at £175,000+VAT. So, in the event that trade at the A**** Hotel does not meet expectation and the loan defaults, I just cannot see how the refurbishment can increase the market value of this property to FOUR times that.
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blender
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Post by blender on Feb 28, 2018 16:40:09 GMT
Assuming they acquired for £175,000, does that mean they have spent c.£300k refurbishing it already?And are there any shots of said refurbishment? All the ones I see are CGI images, and the download only shows the bar area. It seems a good site for a hotel but seeing as there are similar hotels that are well reviewed in the vicinity priced at £30 a night are the profit margins going to be there? No, it means that they have a facility for approx that amount, perhaps including interest and fees, which needs to be refinanced. We do not know how much of that has been spent on refurbishment, how much on business project related matters (it is trading) and how much is still cash.
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invester
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Post by invester on Feb 28, 2018 19:00:49 GMT
Cheers.
It is very much the type of hotel you would see on a program with Alex Polizzi.
Southport station numbers appear good according to Wiki: 2.5m in 2012/2013 to 4.24m in 2016/2017. That is some increase.
A crude look on the map seems to suggest this will be the closest hotel to the station. No real knowledge about the area but are the summer months really busy here like a place like Newquay?
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nick
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Post by nick on Feb 28, 2018 19:15:25 GMT
Cheers. It is very much the type of hotel you would see on a program with Alex Polizzi. Southport station numbers appear good according to Wiki: 2.5m in 2012/2013 to 4.24m in 2016/2017. That is some increase. A crude look on the map seems to suggest this will be the closest hotel to the station. No real knowledge about the area but are the summer months really busy here like a place like Newquay? Remember its being operated as pub/bar not as a hotel despite the name....
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david42
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Post by david42 on Feb 28, 2018 19:17:44 GMT
I see that Google street view lets you look around inside the ground floor of this building. I think the Google view is before the refurbishment.
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Post by investorman on Feb 28, 2018 20:01:56 GMT
51% in one minute.
To be fair, the burger menu did look good.
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