phil
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Post by phil on Oct 16, 2017 17:04:54 GMT
It gives an LTV of 49% in the email. But with a loan of 950k against a valuation of 2.5m , I make that an LTV of just 38% ? Am I missing something, or is this FS at their finest ? Well, I think you should take the valuation with a large pinch of salt. I think you're right, we need to be careful, FS state that the "valuation of £2.5m is on an open market basis considering its present condition and planning permission" yet the valuer states in N2 that "the foregoing is on the basis of a lease in place for 30 year term to housing association prior to work commencement". Edit: I can't see any mention of a lease in place, I'd be happier if the value was set at the purchase price, not barse ackwards residual value.
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Post by brightspark on Oct 16, 2017 20:24:19 GMT
All jolly useful stuff but do we jump into the flames or hold off for something less precarious? I can only tell you that I have taken a small position despite my feelings toward the platform regarding the turbine and Whitehaven fiascos. I too have been turned over by a wind turbine. On other platforms London is my financial graveyard (Seven Sisters and more recently Marylebone). My gut instinct says give this one a miss so I have concluded no small no not even a teeny weeny position on this one. The waters are too muddied. Seems by the slow take up of this loan that my sentiments are shared.
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rogerthat
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Post by rogerthat on Oct 16, 2017 23:00:36 GMT
Seems someone is confident enough to bid £109K plus some small change ...do they know something we don't ?
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Post by martin44 on Oct 17, 2017 0:59:35 GMT
Seems someone is confident enough to bid £109K plus some small change ... do they know something we don't ? Nope... just another Funding secure m*g who cannot be bothered to carry out any DD.
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lobster
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Post by lobster on Oct 17, 2017 7:38:46 GMT
Seems someone is confident enough to bid £109K plus some small change ... do they know something we don't ? Nope... just another Funding secure m*g who cannot be bothered to carry out any DD. Well you may be right, but AFAICS the DD doesn't seem to be throwing up anything too concerning, except for this little beauty at the end of the valuation, mentioned earlier : "the foregoing is on the basis of a lease in place for 30 year term to housing association prior to work commencement". Perhaps that's more than enough to deter most investors. Personally, if I could get some sort of assurance on the above caveat, I'd be taking a chunk of this. Even if the valuation is considerably off the mark, a 38% LTV still leaves more than a little wiggle room.
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stevio
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Post by stevio on Oct 17, 2017 9:05:28 GMT
Nope... just another Funding secure m*g who cannot be bothered to carry out any DD. Well you may be right, but AFAICS the DD doesn't seem to be throwing up anything too concerning, except for this little beauty at the end of the valuation, mentioned earlier : "the foregoing is on the basis of a lease in place for 30 year term to housing association prior to work commencement". Perhaps that's more than enough to deter most investors. Personally, if I could get some sort of assurance on the above caveat, I'd be taking a chunk of this. Even if the valuation is considerably off the mark, a 38% LTV still leaves more than a little wiggle room. Provided the valuation is correct, FS not well known for that....
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rogerthat
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Post by rogerthat on Oct 17, 2017 10:04:11 GMT
Agree with our tasty pink friend above..i might make some enquiries regarding the HA..cos as read..they cant start the FULL dev without the lease in place 1st (and FPP of course ) ...as regards the valuation I always knock 25 - 30% off any figures and see what that does to the LTV..and in this case 30% still leaves an LTV of just over 54%.
However, what concerns me more is that the valuation is based on getting PP on all 25 units Section M (M.08) which the Valuation of £2.5m.. Section N (N.01) specifically refers to.
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SteveT
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Post by SteveT on Oct 17, 2017 10:10:59 GMT
On the plus side, there’s plenty of scope within the current LTV for the loan to be renewed at least a couple of times, even with interest rolled up 😉
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lobster
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Post by lobster on Oct 17, 2017 10:15:34 GMT
...... However, what concerns me more is that the valuation is based on getting PP on all 25 units Section M (M.08) which the Valuation of £2.5m.. Section N (N.01) specifically refers to. You're right - I'd failed to pick up on that. OK, not for me I reckon because of 2 clear risks : Firstly the PP may not materialise, and secondly the 30 lease may not materialise either. Could get unpleasant, and I'm sorry, but I just can't accept that FS have made sufficient allowance in their valuation for the big question mark hanging over the planning. I suppose that's why the borrower can't get cheaper funding elsewhere.
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lobster
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Post by lobster on Oct 17, 2017 10:21:41 GMT
On the plus side, there’s plenty of scope within the current LTV for the loan to be renewed at least a couple of times, even with interest rolled up 😉 But surely if the PP fell through , or the 30 year lease were not to be granted, then FS wouldn't renew the loan (let alone renewing it whilst allowing the interest to roll up).
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rogerthat
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Post by rogerthat on Oct 17, 2017 10:23:21 GMT
Worry ye knot...I'm on the case "But surely if the PP fell through , or the 30 year lease were not to be granted, then FS wouldn't renew the loan (let alone renewing it whilst allowing the interest to roll up)." As I understand it..they have got PP for 5 units internally..if they don't get the 30lease + 20units will they still proceed and how does that affect the original valuation (refer to my last )
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lobster
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Post by lobster on Oct 17, 2017 10:46:20 GMT
Worry ye knot...I'm on the case Fair enough - stick in there Poirot
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rogerthat
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Post by rogerthat on Oct 17, 2017 10:58:23 GMT
Think ive got to the bottom of it
Edit..damn work has cropped up..think theres additional info to come on this..im offski
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r1200gs
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Post by r1200gs on Oct 17, 2017 11:26:07 GMT
Think ive got to the bottom of it Edit..damn work has cropped up..think theres additional info to come on this..im offski You can't do that! I'm going to be checking back every five minutes all day now!
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r00lish67
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Post by r00lish67 on Oct 17, 2017 12:05:00 GMT
As it seems to have been slightly drowned out, I want to echo chielamangus 's point. In fact, I think he's being generous when he says to take the valuation with a large pinch of salt. The only meaningful valuation we should be concerned about is the value that will be realised in the event that this loan defaults. The Residual Valuation, to me, is barely worth the paper it's written on. If the borrower's plans fall through, the next purchaser will be actively disconcerned when negotiating the price. FS however have given us an OMV of £2.5m, which sounds good. The problem I have is that the detailed VR is based upon the RV valuation methodology that I don't trust, whilst the £2.5m figure is derived from a one liner e-mail. To step back from this detail, why would FS be offering this at 17% (formerly 18% apparently?), if the true LTV based upon the security is under 40%? Comparable FS loans not based on RV such as the one in Hillingdon or Bury are typically sold at no more than 11% and have disappeared in seconds. Are FundingSecure being exceptionally generous? Have the other Big Hitters who can dive in at 17% to snap up this low LTV bargain fallen asleep at the wheel? What do you think?
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