mikes1531
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Post by mikes1531 on Sept 27, 2017 15:15:15 GMT
This one's a real fixer-upper! £60k valuation -- I wonder what the buyer paid for it at auction. GDV of £250k for seven apartments -- less than £40k each.
I do hope FS have learned from Whitehaven, and stick to their plan of not releasing T2 until they "have confirmation that the first fix has been completed."
The £36k loan had a £500 bid restriction and filled in about three minutes.
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adrian77
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Post by adrian77 on Sept 27, 2017 17:07:40 GMT
I have looked at this site on Google and you can see the auctioneer- will see if I can get the price paid when I have time.
Not sure if I can post the google link?
I am in this business and have lived in Accrington but I escaped many years ago. However there seems very little room for parking etc but worse there is no way on this planet I can see this renovation costing under the estimated final value and that is before interest charges. I love to restore old buildings but this one is in a very poor state and I am not even convinced the structure is sound. It does not seem to be in a very good area.
On the other hand the price for the flats (studios?) does seem on the low side so if they sell for £65K each then that is 7x65 = £455K which I think would make this development a possible runner
Could anybody with local knowledge comment - maybe worth a punt for the first tranche?
As with all FS property loans I ask myself why does the borrower need to essentially pawn his property...
I thank you.
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adrian77
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Post by adrian77 on Sept 27, 2017 17:34:56 GMT
update - just noticed a (freehold) house in this street sold in June 2017 for £40K and I thought I came from a depressed Northern Mill Town!
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mikes1531
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Post by mikes1531 on Sept 27, 2017 18:59:56 GMT
... there is no way on this planet I can see this renovation costing under the estimated final value and that is before interest charges. According to the VR, the borrower supplied a development cost estimate of £108k. The valuer said they felt that estimate was on the light side. I thought that the development could be successful financially even if the development cost were to turn out to be half again as much as the borrower thought, so I put in a bid. If the valuer was being unreasonably gentle in their criticism of the borrower's cost estimate, and adrian77's estimate is more accurate, then the economics of the development look dubious, to say the least. I don't know where the borrower's estimate came from. Are they a builder? If not, and they have to bring in a builder, they ought to be able to get a reasonably accurate estimate before they start the work, so they ought to know where they stand before they start spending big money. If they know their estimate is wrong early enough they probably could get out without losing an awful lot. The disaster scenario would be going into the project thinking their estimate is right and not finding out that it isn't until a lot of money is spent and the project is behind schedule and over budget. If FS don't advance any further money until the 1st fix actually is complete, and presuming any significant problems would show up before that, then this loan ought to be OK for FS investors. This presumes FS have learned from Whitehaven and don't skimp on project monitoring.
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badersleg
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Post by badersleg on Sept 27, 2017 19:50:00 GMT
I have looked at this site on Google and you can see the auctioneer- will see if I can get the price paid when I have time. Not sure if I can post the google link? I am in this business and have lived in Accrington but I escaped many years ago. However there seems very little room for parking etc but worse there is no way on this planet I can see this renovation costing under the estimated final value and that is before interest charges. I love to restore old buildings but this one is in a very poor state and I am not even convinced the structure is sound. It does not seem to be in a very good area. On the other hand the price for the flats (studios?) does seem on the low side so if they sell for £65K each then that is 7x65 = £455K which I think would make this development a possible runner Could anybody with local knowledge comment - maybe worth a punt for the first tranche? As with all FS property loans I ask myself why does the borrower need to essentially pawn his property... I thank you. From looking at the auctioneers' website:The property went to auction in Feb 2016 (complete with planning) with a guide price of 50 to 60 thousand. It appears not to have sold on the day, but may have received bids after.
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adrian77
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Post by adrian77 on Sept 28, 2017 6:39:42 GMT
I think this borrower has been watching too much of Homes Under The Hammer!
Nice presenters but crazy costings given...
Not sure of the floor area but it is a big building and no way on this planet will £108K cover it. For a building like this, £108K would be my contingency fund! Happy for a second opinion but I can easily see this costing 3 times this amount once architect fees, fire regulations etc etc are taken into account. One problem with old mills is that the floors often have to be removed as they are soaked in oil and a fire hazard - not sure if this building still has any floors!
Totally agree the problem would be that funds are borrowed to progress this development which runs out of money before completion. These flats are in an commercial/industrial area
surrounded by very cheap housing not exactly Canary Wharf!
Have FS taken any professional opinion whatsover?
Personally for me this one is "get in. get out and shake it all about"....good luck to this developer !
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ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Sept 29, 2017 9:35:49 GMT
Could anybody with local knowledge comment - maybe worth a punt for the first tranche? Up until a year or so ago I was living within walking distance of this place, and have been wondering if this one would pop up somewhere - it was for sale for quite a long time. Lots of similar old mills round here are. Most get demolished before development as the old stone buildings are expensive to get up to the requirements of current building regs wrt insulation etc, quite apart from the other potential problems noted by adrian77. It would be fair to say that most of Accrington is generally run down. This particular area isn't one of the worst by any means - there are some areas that I even hesitated to walk round in daylight, but this wasn't one of them. It is an easy walk into town and the station from it, so with respect to Accrington, not a bad location. That's not to say I'd want to live there though. There is a fair amount of new-build housing in the area, so the old terraces have to sell cheaply to compete. Having said that, they do sell as they still constitute by far the vast majority of the housing stock. (Almost by definition; it is a mill town that didn't really exist prior to the industrial revolution, so of course it's essentially all terraces). Nicely done mill conversions do sell at a bit of a premium, but usually there needs to be some other draw for them to work. For example, canalside developments close to where the canalside in general is being regenerated, or developments by one of the old mill lodges. Accrington town centre is supposedly getting a bit of a revamp, but M&S recently closed their store and there's nothing of much note to get people into town as it stands at the moment. All of which means IMO that only locals who want to stay local will be buying here. I can see no reason why anyone would relocate into Accrington, except potentially the fact there's a direct train link into Manchester Victoria and it would be cheaper than the better options are.
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mikes1531
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Post by mikes1531 on Sept 29, 2017 15:34:45 GMT
The critical question for me is... If the borrower gets a firm redevelopment cost estimate that turns out to be as suggested above, which makes the plan uneconomic, and gives up the idea and doesn't repay, could the security be sold for enough to produce the roughly £40k of net proceeds required to return investors' capital and pay the accrued interest?
Has anyone managed to determine what the borrower paid for the property? Is that info available via the Land Registry?
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adrian77
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Post by adrian77 on Sept 29, 2017 19:30:37 GMT
Thanks for the interesting update ---L****n Road Bath sounds a much better investment to me. Although I will keep an eye on this one and I sure won't be returning to Accrington!
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Post by angrykittens on Jan 2, 2018 10:22:11 GMT
Tranche 2 coming later today, from the picture it does look like a lot of work has actually been done! Several questions though, if you could answer fundingsecure Has the chimney stack been removed? It's hard to tell from the new picture as the angle is slightly different, there appears to be something that could be the chimney stack. The initial evaluation report seems quite insistent that the chimney stack be removed. The loan update says "External wall insulation completed" It looks to me that the extension on the left side has indeed had external cladding applied. Is this not needed for the main building which is still bare stone from the picture? Or is internal insulation being used here to retain the external look of the building? |
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Post by badboyyardy on Jan 2, 2018 12:05:45 GMT
All gone in a minute good DD thanks
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rogerthat
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Post by rogerthat on Apr 9, 2018 8:55:23 GMT
Renewal of (1464591652) with 3061058249
£36K @ 12%...LTV 34%
11am 10/04/18
£500 restriction
Disappeared quickly 1st time around..will it the 2nd ?
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james21
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Post by james21 on Apr 9, 2018 9:01:04 GMT
21/3 update "Work continues to progress on site and we have confirmation from Building Control they have inspected the site and are happy with the work that has been carried out so far"
Happy with what work carried out so far? Is it so much trouble for FS to say exactly what has been done for our money"
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rogerthat
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Post by rogerthat on Apr 9, 2018 9:06:11 GMT
21/3 update "Work continues to progress on site and we have confirmation from Building Control they have inspected the site and are happy with the work that has been carried out so far" Happy with what work carried out so far? Is it so much trouble for FS to say exactly what has been done for our money" The new loan number contains update (6/4) under assets tab on what is left to do to complete ?
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james21
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Post by james21 on Apr 9, 2018 9:39:49 GMT
21/3 update "Work continues to progress on site and we have confirmation from Building Control they have inspected the site and are happy with the work that has been carried out so far" Happy with what work carried out so far? Is it so much trouble for FS to say exactly what has been done for our money" The new loan number contains update (6/4) under assets tab on what is left to do to complete ? Thanks for that did not look under assets tab, they could have added to the updates "see assets tab for details"
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