SteveT
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Post by SteveT on Oct 17, 2017 13:11:23 GMT
Morning. Site was purchased for £2m. Regards, Ed. So, not true then. In fact, almost 100% not true. What the supposed value is today is irrelevant, what you have stated is nowhere near accurate and a misrepresentation of the facts. Congratulations, you have finally reached the same level as Lendy ( or should one say sunk?). I suspect it is the sponsors, F&P, who should mostly be blamed for the “spin”. I can’t believe MoneyThing appreciate having to back-track when F&P’s IP document proves less than water-tight!
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seeingred
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Post by seeingred on Oct 17, 2017 13:22:37 GMT
The world has gone full circle on this one.I started out with the view - lovely old building, worthwhile project to support (and I like supporting worthwhile conversions of old iconic buildings into good residential city centre accommodation - I have over £100k in various of these across several platforms). But, oh dear me - the borrower and the family criminal record. Then I started to read more about the family, the borrowers achievements, and I came to the view I would go with him on this one. Many successful and straight people have a dark secret somewhere. We are allowed a mistake or two in life. The borrowers statement (which MT should have included previously) didn't convince me - I had already been convinced. But a mole waved a red flag "purchase price". Alarm bells. MT said one thing, the LR said another. Could I no longer trust MT? Now it is the PROJECT and indeed the MT platform and not the borrower that is giving me second thoughts. I would have expected better. The past year in P2P have shown TIME AND TIME AGAIN that when platforms omit information or try to gloss over some pertinent facts, these are both discovered and then staked out in the sun while the forum vultures gather. It seems platforms need to learn that WE WILL FIND OUT. So why not save everyone a lot of time and trouble (not to mention bad forum comment that will be available on-line forever) by being honest and upfront in the first place?. SophieThing
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oldgrumpy
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Post by oldgrumpy on Oct 17, 2017 13:30:37 GMT
seeingredIt is certainly not the platform reputation that Ed has worked so hard and effectively to build over the last couple of years.
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stokeloans
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Post by stokeloans on Oct 17, 2017 13:33:21 GMT
The world has gone full circle on this one.I started out with the view - lovely old building, worthwhile project to support (and I like supporting worthwhile conversions of old iconic buildings into good residential city centre accommodation - I have over £100k in various of these across several platforms). But, oh dear me - the borrower and the family criminal record. Then I started to read more about the family, the borrowers achievements, and I came to the view I would go with him on this one. Many successful and straight people have a dark secret somewhere. We are allowed a mistake or two in life. The borrowers statement (which MT should have included previously) didn't convince me - I had already been convinced. But a mole waved a red flag "purchase price". Alarm bells. MT said one thing, the LR said another. Could I no longer trust MT? Now it is the PROJECT and indeed the MT platform and not the borrower that is giving me second thoughts. I would have expected better. The past year in P2P have shown TIME AND TIME AGAIN that when platforms omit information or try to gloss over some pertinent facts, these are both discovered and then staked out in the sun while the forum vultures gather. It seems platforms need to learn that WE WILL FIND OUT. So why not save everyone a lot of time and trouble (not to mention bad forum comment that will be available on-line forever) by being honest and upfront in the first place?. SophieThing Because they take everything the borrowers tell them at face value
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seeingred
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Post by seeingred on Oct 17, 2017 13:43:37 GMT
seeingred It is certainly not the platform reputation that Ed has worked so hard and effectively to build over the last couple of years. I think we are getting close to formulating a new set of ground rules (sorry about the pun) for building projects across all P2P platforms. 1. Be honest about the borrower. WE WILL FIND OUT. 2. Don't feed us stupid valuations stamped RICS approved. If we choke on them, you may suffer as well. These things take time. 3. Don't use weasel words. Most of us speak English. Some of us even taught it. 4. Some people have short memories. Computers do not. 5. Keep properly abreast of what is going on on-site. We need REGULAR and proper photographs of progress for DFL projects. 6. Drone technology will increasingly be brought to bear for site inspection. Whether platforms like it or not. 7. Some investors are highly qualified and experienced builders, surveyors, scientists, and self made millionaires. Stop treating us as if we are children.
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littleoldlady
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Post by littleoldlady on Oct 17, 2017 13:46:08 GMT
MT's reputation for honesty and trust took years to establish. It can be destroyed much more quickly.
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jjc
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Post by jjc on Oct 17, 2017 13:46:42 GMT
£3 for a LR doc & a corresponding box that needs to be checked on MT’s (& F&P’s) dd process should not be too much to ask. This loan was in the pipeline for months.
At this point I think we deserve a proper explanation wrt what exactly the remaining (claimed) £1.2m has been spent on?
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keystone
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Post by keystone on Oct 17, 2017 13:54:09 GMT
I'm sorry but I'm not convinced. The borrower has spent a total of £2.2m including the £1M purchase cost on the building. What exactly has the rest of the £1.2 million been spent on? This is a £750,000 loan yet £1.2 million of his own funds has already been spent but there is not any discernible change in the appearance of the building according to local reports.
Time and time again valuations are questioned and discussions have gone on throughout the year regarding other platforms on this and recently on MT, but yet here we are again questioning the valuations.
As someone said earlier in this thread, are there not enough red flags already. The borrowers "interesting" past is based on facts that happened, Valuations however, continue to just be plucked out of thin air. Good luck to those investing.
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am
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Post by am on Oct 17, 2017 14:11:13 GMT
To bring up another point that hasn't yet been covered.
If I haven't missed something the valuation is based on the residual value of the project, with comparables used to estimate the GDV. Additionally, if I haven't missed anything, there's no planning permission, not even outline planning permission. In my opinion this means that a planning risk discount needs to be applied to the valuation.
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GeorgeT
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Post by GeorgeT on Oct 17, 2017 14:16:38 GMT
A point of concern I have is that we were first advised the property was acquired for £2m.
The Valuer states that in his opinion the market value with VP is £2m.
Often, and in the absence of direct comparable evidence, a valuer will consider that the price paid in the recent past is the best indicator of market value.
I note the valuer was instructed by the borrower and not by MT and the valuer relied on information provided by the borrower.
Did the erroneous £2m purchase price figure come from the borrower, and did the valuer rely on it in arriving at the valuation of £2m??? .. I don't know.
Also investors should note the obvious and reasonable caveat in the VR as follows -
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am
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Post by am on Oct 17, 2017 14:17:08 GMT
I'm sorry but I'm not convinced. The borrower has spent a total of £2.2m including the £1M purchase cost on the building. What exactly has the rest of the £1.2 million been spent on? This is a £750,000 loan yet £1.2 million of his own funds has already been spent but there is not any discernible change in the appearance of the building according to local reports. Time and time again valuations are questioned and discussions have gone on throughout the year regarding other platforms on this and recently on MT, but yet here we are again questioning the valuations. As someone said earlier in this thread, are there not enough red flags already. The borrowers "interesting" past is based on facts that happened, Valuations however, continue to just be plucked out of thin air. Good luck to those investing. According to MT money has been spent on making the building safe and asbestos removal, and romy points out that money will have been spent on architects and making the planning application.
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bugs4me
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Post by bugs4me on Oct 17, 2017 14:18:33 GMT
I wish that was true although it was fairly obvious that after all the apparent 'deception' or shall we be kind and say (the convenient) 'omission of material facts' being employed by many platforms it was only a matter of time before a loan came under the microscope in such detail. A couple of platforms I'm withdrawing from - the trust has gone out of the window brought on by in many cases their total cavalier attitude towards lender's funds, failure to communicate, deferring obvious defaults either to massage their headline default rate or simply being inept at dealing with them. So with those platforms any DD on my part is obviously zero as I have no further interest in them apart from withdrawing funds although I may have to wait a while with more than a couple of loans. In all credit to MoneyThing (not F&P the introducers), at least they have taken many comments on board and answered them which many platforms do not as we are all aware. So whilst there may be a small dent in their well earned reputation I believe everyone has learned from this episode. I do feel that F&P should be taken to task over this. How, I have no idea but there is a platform that had several adverse loans introduced to them by a single firm/company that IIRC all went bad. Wouldn't want the same thing to happen to MT not that I'm suggesting F&P fall into the same category.
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littleoldlady
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Post by littleoldlady on Oct 17, 2017 14:23:39 GMT
To bring up another point that hasn't yet been covered. If I haven't missed something the valuation is based on the residual value of the project, with comparables used to estimate the GDV. Additionally, if I haven't missed anything, there's no planning permission, not even outline planning permission. In my opinion this means that a planning risk discount needs to be applied to the valuation. An allied point is why does the borrower need the money now? He has already paid for it and cannot start work on it until when and if he gets PP. Perhaps he needs it for another project? We have seen this before.
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r00lish67
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Post by r00lish67 on Oct 17, 2017 14:32:42 GMT
A point re: the overall proposal. If all tranches were to be released (a further £4.25m after this one), this loan will be broadly comparable in size to the Hall loan, with the same rate and significantly more risk factors identified. Once PP is (hopefully) obtained, and we start moving away from the much more solid ground of the LR valuation with additional tranches being released, the real firesale valuation becomes even less of a known. How is 11% going to compensate for this?
My view at the moment therefore, notwithstanding the dented MT reputation, is the only way this is going to work is for this initial tranche to rank ahead of the development tranches, and for the Dev tranches to be offered at 13-14%.
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bugs4me
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Post by bugs4me on Oct 17, 2017 14:40:31 GMT
A point of concern I have is that we were first advised the property was acquired for £2m. The Valuer states that in his opinion the market value with VP is £2m. Often, and in the absence of direct comparable evidence, a valuer will consider that the price paid in the recent past is the best indicator of market value. I note the valuer was instructed by the borrower and not by MT and the valuer relied on information provided by the borrower. Did the erroneous £2m purchase price figure come from the borrower, and did the valuer rely on it in arriving at the valuation of £2m??? .. I don't know. Also investors should note the obvious and reasonable caveat in the VR as follows - Typical sloppy schoolboy howler. Why not just state the property was purchased for £1m, the borrower has spent a further £1m making improvements and we now value it at £2m. What is so difficult about that - obviously everything with these VR's. Beginning to wonder - why bother with VR's at all. They seem pointless as it's now essential to do DD on the borrower, we're also doing DD on the VR's.
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