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Post by rollercoaster on Oct 31, 2019 11:18:26 GMT
Keep things simple in your assessment. Would a sale of the site cover the monies owing?
It has been on the market for a while so is probably too expensive to sell at the current price. What is it actually worth in the current market?
Current monies owing are the capital loan and missing interest payments since default.
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Jaydee
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Post by Jaydee on Oct 31, 2019 12:43:35 GMT
Keep things simple in your assessment. Would a sale of the site cover the monies owing? It has been on the market for a while so is probably too expensive to sell at the current price. What is it actually worth in the current market? Current monies owing are the capital loan and missing interest payments since default. Considering that the original valuation was for planning for one residence which was obtained and the borrower decided that he could get more money for a greater number of units on the site, yes the greedy bugger is trying to milk it by reapplying and getting planning for four units. The approved planning application is a really dire block of town houses that would probably struggle to sell for decent money any where else but London. In today's market, buyers / developers have their pick of sites and that is probably one of the reasons this site is proving difficult to sell. MT should just tell the borrower to get it sold now. The borrower is going to make a handsome profit anyway.
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Post by mrclondon on Oct 31, 2019 13:19:35 GMT
. MT should just tell the borrower to get it sold now. Yes, the length of time MT has indulged the borrower's choice of selling agent (based in Manchester) is becoming a tad excessive. It needs listing with a local agent, with contacts in the local building industry. A single small plot is unlikely to be of interest to builders outside a fairly small radius of the site (5 ish miles ?). I suspect though that local agents would be reluctant to list it at its current asking price.
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Post by rollercoaster on Oct 31, 2019 19:12:58 GMT
"The borrower is going to make a handsome profit anyway" I'd disagree with you there, my maths guesses that the borrower will make a small loss at the current sale price. The borrower paid the interest for quite a while (at 10+%), so a couple of hundred K, plus the now higher rate of interest debt, plus the architect, planning and legal fees. I think he paid too much in the first place, I'd guess it was via a sealed bidding process to the council (similar to the other site down the road still listed on Zoopla). Presumably betting on rising property values and getting planning for more units made the amount seem viable at the time. Whilst the 4 house planning does add some value to the site, property prices have fallen and build costs are rising. I'm not sure the agent's location makes that much difference in the internet age - a local agent might have contacts that don't use RightMove I suppose, but builders for this scale will be looking at buying houses to knock down and redevelop. I note it is not listed on Zoopla, and the Zoopla one is not on Rightmove. mrclondon hits the nail on the head: If a property doesn't sell it is usually down to price. So back to the simple question: Would a sale of the site cover the monies owing? As time progresses when does the answer to that question become "no"?
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Jaydee
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Post by Jaydee on Nov 1, 2019 15:59:57 GMT
"The borrower is going to make a handsome profit anyway" I'd disagree with you there, my maths guesses that the borrower will make a small loss at the current sale price. The borrower paid the interest for quite a while (at 10+%), so a couple of hundred K, plus the now higher rate of interest debt, plus the architect, planning and legal fees. I think he paid too much in the first place, I'd guess it was via a sealed bidding process to the council (similar to the other site down the road still listed on Zoopla). Presumably betting on rising property values and getting planning for more units made the amount seem viable at the time. Whilst the 4 house planning does add some value to the site, property prices have fallen and build costs are rising. I'm not sure the agent's location makes that much difference in the internet age - a local agent might have contacts that don't use RightMove I suppose, but builders for this scale will be looking at buying houses to knock down and redevelop. I note it is not listed on Zoopla, and the Zoopla one is not on Rightmove. mrclondon hits the nail on the head: If a property doesn't sell it is usually down to price. So back to the simple question: Would a sale of the site cover the monies owing? As time progresses when does the answer to that question become "no"? From the loan blurb......................... Loan value - £927.5k. Own cash to be used for change of PP etc - £500k Purchase price with planning for 1 house - £1367k Offer to purchase site available on day 1 - £1650k Day 1 profit available - £283k The borrower decided not take up the offer to purchase, which would have given him a profit of £283k less MT's interest and fees on a (probably) 6 month short term loan, say around £70k. this would have left him with a profit of around £213k for doing nothing. He decided that he could make more money by getting planning for 4 houses and building them out within 24 months. So that would have seen these house built out and sold by 22 March of this year. Yet here we are with nothing to show but a vacant site in London. probably still valued at the initial figure of £1325k. The loan including fess and all interest, both due and paid, including a figure for MT's share has probably cost the borrower £1193k. I don't know how much of his own £500k he has spent. £100k tops? Lets say costs date of £1300k. For sale at offers over £1500k Potential profit of £200k if it sells soon. The interest figures do not include the "default" portion which will eat into any profit. Now would you have gone for the initial profit or gone down the path of the borrower.
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Post by rollercoaster on Nov 1, 2019 17:50:46 GMT
You have forgotten the 440k the borrower had to pay when he bought the place. The borrower has spent: - Purchase of property (excluding MT loan): 440K
- Legal fees, architect fees, planning fees, money transfer fees 50k??
- Interest on loan over 2 years: £200k approx
Total: £690k If the place sells tomorrow at £1.5m: - Repay MT loan capital: £928k
- Minus some more legal and default interest cost ??
Total (less than ) 573K
So the borrower loses money, around £115k. If that offer of purchase 2 years ago was real then, yes, he has missed out big time.
MT lenders shouldn't need to worry about the borrower too much though due MT's charge on the property. MT need to keep a close eye on the achievable sale price. If it is less than the total of capital + outstanding debt then MT lenders will be losing money. Presumably that value is currently just under £1m. Would the property sell for £1m today?
So a bind - MT would probably be happy with a £1m sale price. Borrower doesn't want to sell at less than £1.5m. Will MT call in the loan, possess the property and get an order for sale from the courts?
I think everyone will wait until after Brexit is resolved (one way or another!) and London property starts selling again, praying that there isn't yet another extension and further delay. Meanwhile the borrower might complete the sale (MT applying pressure to accept any offer lower than 1.5m but over £1m).
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Jaydee
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Post by Jaydee on Nov 1, 2019 19:14:09 GMT
You have forgotten the 440k the borrower had to pay when he bought the place. The borrower has spent: - Purchase of property (excluding MT loan): 440K
- Legal fees, architect fees, planning fees, money transfer fees 50k??
- Interest on loan over 2 years: £200k approx
Total: £690k If the place sells tomorrow at £1.5m: - Repay MT loan capital: £928k
- Minus some more legal and default interest cost ??
Total (less than ) 573K
So the borrower loses money, around £115k. If that offer of purchase 2 years ago was real then, yes, he has missed out big time.
MT lenders shouldn't need to worry about the borrower too much though due MT's charge on the property. MT need to keep a close eye on the achievable sale price. If it is less than the total of capital + outstanding debt then MT lenders will be losing money. Presumably that value is currently just under £1m. Would the property sell for £1m today?
So a bind - MT would probably be happy with a £1m sale price. Borrower doesn't want to sell at less than £1.5m. Will MT call in the loan, possess the property and get an order for sale from the courts?
I think everyone will wait until after Brexit is resolved (one way or another!) and London property starts selling again, praying that there isn't yet another extension and further delay. Meanwhile the borrower might complete the sale (MT applying pressure to accept any offer lower than 1.5m but over £1m).
The borrower had stated at loan draw down he was using £500k of his own cash. That gave him £1427.5k of available funds at site purchase time. If he had flipped the site, he would have had a profit of £233k less MT fees and interest. His decision to go for a change in planning will have cost him fees etc say circa £70k. So to date, excluding paid interest, he has spent around £1487k. He has 6 months interest outstanding at a default rate of 12.5%. So will he recoup the cash he has paid out from his own pocket? Highly unlikely. I would guesstimate outstanding interest (including MT share) and fees to be around £80k. So even if he could get the original offer, he will probably suffer a loss.
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upperdeane
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Post by upperdeane on Nov 4, 2019 21:09:10 GMT
I just logged on and noticed somebody has placed a sell order at 90 percent on the secondary market.
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upperdeane
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Post by upperdeane on Nov 15, 2019 18:22:47 GMT
Update on MT site (MT hope to update us next week).
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Post by GSV3MIaC on Dec 20, 2019 19:53:02 GMT
Update on site (Please don't copy MT updates verbatim and post them here)
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star dust
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Post by star dust on Apr 20, 2020 12:19:39 GMT
Update on the platform for this and a couple of others. Old habits die hard I still log in daily. Maybe we could re purpose one of the threads to 'spread the word' when they are spotted. I guess understandably MoneyThing and the much reduced team don't give notice on here. No repurposing required, but I have stickied this thread p2pindependentforum.com/post/49527/thread to make it easier to spot if anyone wants to use it when reporting multiple loan updates
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up
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Post by up on May 27, 2020 16:07:35 GMT
promising update exchange hopeful within week
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cedarcourtcapital
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Post by cedarcourtcapital on May 27, 2020 19:04:45 GMT
Let's hope today's update proves more accurate than the last two 'positive' ones below:
27th March - Exchange is expected within next month.
20th December - The borrower is close to finalising a sale of the site. Exchange of contracts is expected early in the new year.
I genuinely hope the update is truthful, but ....
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Post by Badly Drawn Stickman on May 27, 2020 19:24:22 GMT
Let's hope today's update proves more accurate than the last two 'positive' ones below: 27th March - Exchange is expected within next month. 20th December - The borrower is close to finalising a sale of the site. Exchange of contracts is expected early in the new year. I genuinely hope the update is truthful, but .... You could go further back than that, I think at least a year ago (probably when interest was last paid) a deal was imminent. From memory penalty interest has been in place since last April, but never increased again since I think. This time hopefully will be different.
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derbyfella
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Post by derbyfella on Jul 24, 2020 19:12:00 GMT
On the 30th June we were told that an update would be provided within a week...
still waiting....jus sayin
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