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Post by emoney on Jul 1, 2015 9:43:43 GMT
Good morning crowd, we have been presented with a deal outside our normal criteria, but it seems like a no-brainer. The borrower is a farmer and has a secured loan with his business bankers against his farm.
He is looking to raise £150K against his mortgage/charge free 110 acres of grazing land in Cornwall, which has an open market £880K Val forced/auction value of £550K (£5K an acre forced sale £8K open market). Therefore the loan to value is 27% and we would look to be paying 12% p.a. fixed yield x 5Y on a capital repayment basis.
Would this type of loan be supported by the crowd?
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huxs
Member of DD Central
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Likes: 218
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Post by huxs on Jul 1, 2015 10:49:14 GMT
Hi,
This sounds like a sensible loan to me and one I would investing.
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Post by rumdoodle on Jul 1, 2015 10:57:17 GMT
Lee et al
You indicate that the farmer has a secured loan on his farm, but is looking to raise £150,000 on mortgage/charge free land. Clearly, a lot more detail/clarification is needed before a considered opinion can be formed. The 'crowd' may well jump in at 12%, but I would refrain until much more detail and evidence of relevant 'good practice' becomes available.
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Post by sailbadthesinner on Jul 1, 2015 11:02:25 GMT
Agreed this seems a good opportunity but I remember something about obtaining a legal charge on land that has no built property on it. Can't remember the details but any conveyancing solicitor should know. Something to do with tenancy of freehold. Not saying it can't be done just there is some complication but this is all from a long time ago (pre land registry days) so it may not be an issue at all anymore.
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Post by emoney on Jul 1, 2015 11:08:30 GMT
Hi, thx both for your feedback, rumdoodle what do you mean by "good practice" Interestingly we've had verbal commitment to fund 100% of the loan already! so it looks like we've well and truly lit the disruptive torch paper  |
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Post by emoney on Jul 1, 2015 11:10:03 GMT
Hi, thx both for your feedback, rumdoodle what do you mean by "good practice" Interestingly we've had verbal commitment to fund 100% of the loan already! so it looks like we've well and truly lit the disruptive torch paper Agreed regarding clarity of security, our lawyers at Metis Law would have to validate any legal security on behalf of lenders.
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Post by veganline on Jul 1, 2015 14:24:21 GMT
Hi, thx both for your feedback, rumdoodle what do you mean by "good practice" Interestingly we've had verbal commitment to fund 100% of the loan already! so it looks like we've well and truly lit the disruptive torch paper Maybe a screen-shot of the land registry entry is all that's needed, or maybe something more. I hope a lawyer could advise us how to set-up a fool-proof system of evidence presented to share with lenders, so there's no need to check each case. Going-off on a tangent. If lawyers are needed to double-check each case and give assurance, I read that "virtual law" is a good google search to find firms of good lawyers with low overheads, although Mantis Law might be one such for all I know. A legal firm with a city centre office and a hugely well-paid layer of senior partners shouldn't be necessary. Getting back to the point, I can't think of anything against land loans.
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sqh
Member of DD Central
Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Jul 2, 2015 22:25:30 GMT
How comprehensive is the land valuation ?
Have soil tests been conducted ?
Does the farmland comply with EU farming regulations ?
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Post by emoney on Jul 3, 2015 13:45:55 GMT
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