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Post by diamon89 on Nov 20, 2017 10:29:52 GMT
Can't find a thread on this one, so starting new thread.
Hard to reconcile this update:
"The development is continuing well with the brickwork now up to second floor level. The site now has an estimated value of £1,160,000"
With overall GDV of £1,245,000
Surely, if the completed development is expected to be worth £1.245m, the current site cannot be worth 93% of that? It doesn't sound like it is 93% complete, by a long way. There is a whole further storey to build yet, as well as all the internal finishing etc. etc.
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Post by mrclondon on Nov 20, 2017 12:20:12 GMT
A good analysis diamon89 , I suspect the answer lies in the sentence that follows the ones you referred to "We are waiting for an updated valuation report that confirms an uplift in the GDV due to a slight change in the plans."However, whether the slight change in the plans will make a big difference in the GDV remains to be seen. The approach FS use of calculating current valuation on development projects is based on interpolation of the total planned expenditure. Not an ideal approach if costs incurred are actually higher than was budgeted as it can mean the project is valued at 100% of planned costs when actually still unfinished. This is the role of a MS (monitoring surveyor, rarely employed by FS) to say whether the costs incurred are appropriate. |
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Post by wangja on Nov 21, 2017 6:09:54 GMT
[...] Surely, if the completed development is expected to be worth £1.245m, the current site cannot be worth 93% of that? It doesn't sound like it is 93% complete, by a long way. There is a whole further storey to build yet, as well as all the internal finishing etc. etc. Agreed. It is a sad fact that a partially built development is not worth much more than the land, at least until watertight. Until then, if left alone, it deteriorates leaving remedial work for the next purchaser in what might then amount to a forced sale.
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adrian77
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Post by adrian77 on Nov 21, 2017 10:34:20 GMT
Totally agree- also fitting out a property can easily cost as much as the shell. In my experience the biggest problem in development is cash-flow. If a developer starts off heavily indebted and then hits cost and schedule overruns then things can get extremely sticky. If such a developer has a "build now but pay later loan" then he has no choice but to borrow even more money and things can spiral out of control......this is why I am not happy with residual valuations nor in fact to be honest the overall level of DD that FS do for their (our money) property loans.
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mikes1531
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Post by mikes1531 on Jan 5, 2018 21:34:31 GMT
Hard to reconcile this update: "The development is continuing well with the brickwork now up to second floor level. The site now has an estimated value of £1,160,000" With overall GDV of £1,245,000 Surely, if the completed development is expected to be worth £1.245m, the current site cannot be worth 93% of that? It doesn't sound like it is 93% complete, by a long way. There is a whole further storey to build yet, as well as all the internal finishing etc. etc. A good analysis diamon89 , I suspect the answer lies in the sentence that follows the ones you referred to "We are waiting for an updated valuation report that confirms an uplift in the GDV due to a slight change in the plans."However, whether the slight change in the plans will make a big difference in the GDV remains to be seen. Totally agree- also fitting out a property can easily cost as much as the shell. In my experience the biggest problem in development is cash-flow. If a developer starts off heavily indebted and then hits cost and schedule overruns then things can get extremely sticky. Tranche 5 (£50k) of this development loan is up for renewal tomorrow. The good news is that the borrower seems to have come up with the cash to fund the renewal. The bad news is that FS haven't provided an update since the one quoted in the OP above. That was produced at the time of the issuance of Tranche 9. I expect that some of the funds raised will have been used to fund the subsequent three renewals (T2, T3, & T4, totalling £155k) but there still should have been nearly £50k of what T9 raised available to fund further progress and increase the project value by now. The fact that FS have not provided an update makes me worry that the updated VR they were waiting for in mid-Nov did not confirm the hoped-for GDV increase. Even worse, it may not have supported FS's calculation -- based on the previous VR -- that the progress made by mid-Nov meant the part-build project was worth 93% of the original GDV. I think we really need some more input from fundingsecure.
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sarahcount
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Post by sarahcount on Jan 30, 2018 17:10:20 GMT
Renewal going live tomorrow.
FS E-mail update says;
"Update 30/01/2019
The development is continuing well with the brickwork now up to the top floor level."
Either usual FS lack of attention to detail or their time machine is reporting back that there has been a lack of progress in the intervening 12 months.
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rogerthat
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Post by rogerthat on Jan 30, 2018 21:39:56 GMT
Renewal going live tomorrow.
FS E-mail update says;
"Update 30/01/2019
The development is continuing well with the brickwork now up to the top floor level."
Either usual FS lack of attention to detail or their time machine is reporting back that there has been a lack of progress in the intervening 12 months. Probably 5mins to 5..sloppy I know..like one of the other loans tomoz with a revised LTV...granted it shouldn't happen but better the devil you know ?
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rogerthat
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Post by rogerthat on Jan 31, 2018 11:23:12 GMT
Anyone else spot the glaring error on the renewal listing of Tranche 6 which has just filled ?  ( I mean other than the e.mail date of 31/01/19 ) ....on your marks...get set....GO  Tick tock tick tock....  |
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woodland
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Post by woodland on Jan 31, 2018 11:47:04 GMT
Wrong link / for tranche #9 - opens up tranche #2!
Should Link to loan #2119549458.
Do I get a Blue Peter badge? 😂
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woodland
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Post by woodland on Jan 31, 2018 11:47:35 GMT
Wrong link / number....
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rogerthat
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Post by rogerthat on Jan 31, 2018 11:52:42 GMT
Woodland...I was going to award you that coveted badge..but you must learn to press 'Quote' on the right hand side of page relevant to the comment you want to reply to..however I'm in a generous mood today so as you're the only one to spot it..the badge is yours for the day The general tab has indeed got the same loan number for Tranches 2 & 9...well done 
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woodland
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Post by woodland on Jan 31, 2018 11:58:49 GMT
Woodland...I was going to award you that coveted badge..but you must learn to press 'Quote' on the right hand side of page relevant to the comment you want to reply to..however I'm in a generous mood today so as you're the only one to spot it..the badge is yours for the day The general tab has indeed got the same loan number for Tranches 2 & 9...well done Made my day rogerthat! 😂 Still learning to use these forums - hope the quote works this time. Here goes....
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woodland
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Post by woodland on Jan 31, 2018 11:59:10 GMT
It worked! 😀
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rogerthat
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Post by rogerthat on Jan 31, 2018 12:04:01 GMT
Now you're just showing off...
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rogerthat
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Post by rogerthat on Mar 22, 2018 17:33:13 GMT
Renewal of (7577995195) with 4782170078 £100K @ 13%...LTV 64% 11am 23rd March 2018 Update 30/01/2018 The development is continuing well with the brickwork now up to the top floor level. We are expecting an updated valuation shortly to confirm the latest value of the property, in the meantime we are continuing to use the previous value to calculate LTV. Where is the updated valuation FS were expecting ? seems we have to guesstimate what progress has been made in almost the last two months  |
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( I mean other than the e.mail date of 31/01/19 ) ....on your marks...get set....GO 
