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Post by skint4achange on Nov 24, 2017 12:46:48 GMT
The reason most businesses go to places like Lendy is because they are usually faster than banks and not usually as picky.
I am grateful that this one is taking a while. It means (At least to me) that after being burnt on a few occasions, Lendy are finally looking further into some issues rather than throwing OUR money at lenders for a higher return. We all know of the risks and that is why we get good returns, but no point having high returns if you lose your capital.
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zlb
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Post by zlb on Nov 27, 2017 21:51:31 GMT
The reason most businesses go to places like Lendy is because they are usually faster than banks and not usually as picky.
I am grateful that this one is taking a while. It means (At least to me) that after being burnt on a few occasions, Lendy are finally looking further into some issues rather than throwing OUR money at lenders for a higher return. We all know of the risks and that is why we get good returns, but no point having high returns if you lose your capital.
I like your points, but could it take longer simply owing to L (solicitor etc) workload? I'd be interested to know how "picky" banks are ... If they are ultra-careful, perhaps that contributes to understanding the risk. ... As for risk and return, I'd calculated straight diversification of eg &100 in each of 12 projects and 1/6 defaults, that's not good, then. Obviously L realise this, though, so I like to think that this is motivation to recover current wide range of projects in default, suspension, etc. Test cases in spotlight not comfortable.
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zlb
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Post by zlb on Nov 28, 2017 23:03:05 GMT
Why would Lendy feel the need to guage appetite for this loan? It would clearly have no problem getting I funded. : Why do you say that? You might be right, but with all the overdue and suspended loans investor support as shown on this forum seems to be less enthusiastic than it had been in the past. The Lendy loan book has stopped growing, which isn't a good sign either. The fact that Lendy felt it appropriate to offer cashback on a couple of recent DFL tranches, suggests to me that they're concerned about investor support for some loans. No doubt Lendy have been watching as investors have withdrawn large chunks of cash from the platform over the past month rather than using the funds from repayments to buy parts on the SM or sit in their accounts in preparation for future investment opportunities. In the circumstances, it makes sense to me for Lendy to put this loan in the pipeline early and see how well it is pre-funded -- though much of the pre-funding they see could come from default settings that investors don't pay much attention to until the 'going live tomorrow, check your pre-funding level' email is sent, and therefore might not be very reliable. I wouldn't pre fund to show interest until there was more info. Eg disclosure of relationships, photos of inside equipment quality etc. A search for the site shows lots of scrap trains from its previous incarnation. How much does one trust L's seeming confidence and quick turnaround for refinance?
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Post by skint4achange on Nov 29, 2017 11:05:25 GMT
If you look at the valuation document for this property there are lots of photo's of the insides of the buildings/offices. I think the equipment is irrelevant (Not that there really is any) as the valuation would not include fixtures and fittings anyway, AFAIK. If it did, then surely it would be being sold as a business and not as property?
As for relationships, that is a rather more sticky point as Lendy DD doesn't seem to be that good at picking these issues up at the early stage, if at all.
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copacetic
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Post by copacetic on Dec 1, 2017 17:17:47 GMT
There's been an update to this loan today that may affect some people's prefund levels. From what I can understand of it the purchaser is selling for £1m + a promise of £500k 9 months down the road ... so the borrower now is now actually having to sink a much smaller amount of their capital into this project up front.
A rough guess of the borrowers actual commitment might be
£115500 (lendy interest 18% for 6 months and up front fee 2%)
£64500 commercial property stamp duty
£5000 Legal fees (guess based on some googling, maybe someone with more experience might chip in if this seems way out)
Loan value on Lendy £1,050,000
So the borrower is only contributing 1,500,000-(1,050,000+500,000 -115,500-64,500-5,000) = £135000. To me a borrower that's willing to sink £500k+ of their own money into a project is more likely to succeed than one relying on other people's money!
It also indicates the valuation based on purchase price now isn't a straightforward £1.5m since the seller isn't actually receiving that in cash and is taking into account some discount for the risk of not getting the last £500k.
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mary
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Post by mary on Dec 2, 2017 17:57:54 GMT
The only explanation that makes sense to me is that the seller and purchaser are related in some manner.
Either way, the deferred payment must be covered by a 1st charge, which makes Lendy a 2nd charge, which makes this a non-starter for me. (If it's not covered by a first charge, then either the seller is insane or something even more unfathomable is afoot).
Either way this screams avoid.
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Post by harryvederci on Dec 2, 2017 19:17:26 GMT
The goalposts have moved - Ly need to make crystal clear is this property purchase going through the Land Reg at a stated consideration of £1m, or £1.5m, which has implications for stamp duty apart from anything else.
As others have pointed out above, how is the 'deferred' £500,000 to be secured?
The property has been valued to assumed purchase price of £1.5m - if that now turns out to be £1m I would have thought Ly would want to revert back to solicitors/surveyors to put someone on the liability hook (other than investors) if it goes wrong.
I cant see how this could possibly be remortgaged out within 6 months if there is £1.05m Ly and £500k vendor loan secured on it, it doesnt make any sense to me.
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Post by martin44 on Dec 2, 2017 21:28:21 GMT
I would also like to know, Lendy Support how soon after the funds are drawn down will the said company be moving out of the rented premises and into the purchased (our security) premises, i would feel far more comfortable with any investment i may make, knowing that the borrower and his business will be 'in situ' when the 6 months loan term is up, this would assure me that the borrower is committed and would be looking hard for re-finance if their business is of any importance. However, if the property is to remain empty for the next six months while the borrower 'tries' to refinance, while covering their own back's by remaining in the rented property, then this would not be one for me, i know rotherham fairly well, a town in the dolbrums at the moment, i do not think this is worth anything like £1.5m and should the borrower not be able to re-finance, i would suspect this will end up as a sub £1m firesale, how sub is anyone's guess. |
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zlb
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Post by zlb on Dec 3, 2017 21:50:31 GMT
The only explanation that makes sense to me is that the seller and purchaser are related in some manner. Either way, the deferred payment must be covered by a 1st charge, which makes Lendy a 2nd charge, which makes this a non-starter for me. (If it's not covered by a first charge, then either the seller is insane or something even more unfathomable is afoot). Either way this screams avoid. Although my description isn't as logical, I might agree without clear information. It seems knotted string or strings, that one can't follow clearly in order to make an assessment - including clarity over the valuation as mentioned by others. Perhaps later information will be more clear. I thought that I had read at some point a long while back, though, that Lendy always will arrange first legal charge of the security/valuation property.
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zlb
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Post by zlb on Dec 3, 2017 21:51:41 GMT
If you look at the valuation document for this property there are lots of photo's of the insides of the buildings/offices. I think the equipment is irrelevant (Not that there really is any) as the valuation would not include fixtures and fittings anyway, AFAIK. If it did, then surely it would be being sold as a business and not as property?
As for relationships, that is a rather more sticky point as Lendy DD doesn't seem to be that good at picking these issues up at the early stage, if at all.
Thanks, I had assumed that as the main image was poor, that there weren't any others, and that it was a skeleton description presently.
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hazellend
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Post by hazellend on Dec 3, 2017 22:45:32 GMT
I was interested but now I’m not.
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warn
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Post by warn on Dec 4, 2017 0:31:20 GMT
Hey, it's 12%. Throw a few thou in, then flip it to a mug after 79 days, Easy money, what can go wrong?
I really, really hope that I didn't need to include a smiley of some sort up there.
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Liz
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Post by Liz on Dec 4, 2017 0:38:37 GMT
Hey, it's 12%. Throw a few thou in, then flip it to a mug after 79 days, Easy money, what can go wrong?
I really, really hope that I didn't need to include a smiley of some sort up there.you needed a "  " Indeed what could possibly go wrong 
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mary
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Post by mary on Dec 5, 2017 15:54:08 GMT
Quite how they can justifiably claim the LTV hasn't been affected escapes me, but we shall see what - if any - response I get to my support ticket. Word from on high (my bold): All I can say is that is one VERY generous and understanding vendor... Show me 1 sane person that would swap a real property for some of its value plus an unsecured loan? This is more fishy than a fish market.
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Post by harryvederci on Dec 5, 2017 16:20:17 GMT
from the valuation report...
The property has been sold to your applicant borrower,
subject to contract, via the marketing agents Knight Frank
and Fernie Greaves at a stated consideration of £1,500,000,
as confirmed by the marketing agents and upon which we
have placed reliance. Sales particulars are appended and
lenders legal advisers are also requested to confirm the
purchase price is as stated.
But its not £1.5m is it Ly, its £1m all funded by Ly with the buyer getting a 100% free ride and not putting anything into the deal
...so Ly investors are going to carry the can if anything goes wrong with this?
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"