bababill
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Post by bababill on Dec 4, 2017 4:39:51 GMT
Does anyone know why the VR mentions
“EPCs are all E and below and therefore, potentially the property is incapable of being let or sold from April 2018. “
This is under section 31 General Remarks.
I ask this not because of the impending 2018 regulations but rather it seems to contradict the EPCs provided for the individual floors two pages earlier in the VR.
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Post by proplend on Dec 4, 2017 11:39:49 GMT
Does anyone know why the VR mentions “EPCs are all E and below and therefore, potentially the property is incapable of being let or sold from April 2018. “ This is under section 31 General Remarks. I ask this not because of the impending 2018 regulations but rather it seems to contradict the EPCs provided for the individual floors two pages earlier in the VR. Good morning bababill Having spoken with our borrowing team I understand that the April 2018 date does not apply to existing leases and this borrower plans to convert to residential - for which this commercial EPC won't apply. Thanks, Richard
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r00lish67
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Post by r00lish67 on Dec 5, 2017 9:52:13 GMT
Does anyone know why the VR mentions “EPCs are all E and below and therefore, potentially the property is incapable of being let or sold from April 2018. “ This is under section 31 General Remarks. I ask this not because of the impending 2018 regulations but rather it seems to contradict the EPCs provided for the individual floors two pages earlier in the VR. Good morning bababill Having spoken with our borrowing team I understand that the April 2018 date does not apply to existing leases and this borrower plans to convert to residential - for which this commercial EPC won't apply. Thanks, Richard Hi proplend , I'm interested in this too. I think, as lenders, we need to assume the worst case i.e. that the planning is turned down, and the building carries on being used for its current purpose. To support the valuation, it would therefore need to be able to be occupied by new tenants as and when leases expire. So, the questions are: 1) if the planning were to be turned down, how would the borrower support new commercial lessees if the EPC's are all E and below? 2) I'm not sure you addressed all of Baba's question, in that there's an apparent contradiction in the EPC's within different sections of the VR. Can you clarify? Thanks
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Post by proplend on Dec 5, 2017 16:33:43 GMT
Good morning bababill Having spoken with our borrowing team I understand that the April 2018 date does not apply to existing leases and this borrower plans to convert to residential - for which this commercial EPC won't apply. Thanks, Richard Hi proplend , I'm interested in this too. I think, as lenders, we need to assume the worst case i.e. that the planning is turned down, and the building carries on being used for its current purpose. To support the valuation, it would therefore need to be able to be occupied by new tenants as and when leases expire. So, the questions are: 1) if the planning were to be turned down, how would the borrower support new commercial lessees if the EPC's are all E and below? 2) I'm not sure you addressed all of Baba's question, in that there's an apparent contradiction in the EPC's within different sections of the VR. Can you clarify? Thanks Apologies for the delay in responding and the slight inconsistency in the valuation report. We can confirm that at the time of the valuation only the Sixth Floor had an EPC rating of F (see section 27) - and we understand that energy efficiency improvements are being made to this floor even prior to purchase. Given the demand for residential accommodation in the area is extremely high, we view the likelihood of the local council rejecting the request for planning permission to convert the premises to residential as low. In the event that planning permission is not granted, the borrower will refurbish the building where required in order that it remains suitable for commercial letting. It is in no one's interest to allow the building to remain in an unlettable condition. The borrower is a very experienced property investor and developer to whom we have extended other facilities, each of which have performed as agreed. He is aware of EPC regulations for letting post April 2018. Richard
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sapphire
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Post by sapphire on Dec 13, 2017 4:15:31 GMT
I am trying to understand how the returns are split between the lenders and Proplend.
The 'Loan Request Summary' mentions an overall blended interest rate of 10% p.a. payable by the borrower.
As Proplend deduct 10% from the interest paid to lenders, I think this would mean that overall the lenders receive (net) 9% p.a. and Proplend 1% p.a.
The 'Loan Request Summary' also notes Arrangement Fee of 1% and a Broker fee of 1%
Does the above cover *all* the fees/charges which Proplend is expected to receive or am I missing something?
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elliotn
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Post by elliotn on Dec 13, 2017 6:40:52 GMT
Looks like it, there may be default interest payable, an older hat than me may have to confirm if lenders share this (although they have not had a long term overdue loan 😊 ).
There is also an additional 0.5% each time a seller sells on the PLE.
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sapphire
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Post by sapphire on Dec 13, 2017 8:42:48 GMT
The loan agreement states that in the event of a default the interest payable would increase to 120% of the agreed interest - so in this loan would mean an overall interest rate of 12% p.a.
As proplend take a 10% share of the interest, this would mean an extra 0.2% p.a to them.
There does not appear to be any mention of any other fees payable to Proplend in the event of a default.
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sapphire
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Post by sapphire on Dec 13, 2017 8:50:09 GMT
Just noticed that the loan agreement mentions a 'Completion Fee payable by borrower to Proplend' of £29,000. On the loan of £1,495,000 this is slightly just over 2%.
There are also references in the loan agreement to the 'Arrangement Fee' payable by the borrower but the amount payable is not specifically mentioned in this agreement. The 'Loan Request' document mentions the arrangement fees to be 1%.
There does not appear to be any mention to the 'Completion Fee' in the 'Loan Request' document.
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Post by proplend on Dec 14, 2017 10:31:53 GMT
Just noticed that the loan agreement mentions a 'Completion Fee payable by borrower to Proplend' of £29,000. On the loan of £1,495,000 this is slightly just over 2%. There are also references in the loan agreement to the 'Arrangement Fee' payable by the borrower but the amount payable is not specifically mentioned in this agreement. The 'Loan Request' document mentions the arrangement fees to be 1%. There does not appear to be any mention to the 'Completion Fee' in the 'Loan Request' document. Good morning sapphire I believe you're actually talking about the Burton loan (not the Birmingham Office Block loan this thread relates to), so perhaps start a new thread to continue to discuss. I can however confirm that there is only ever one fee payable to Proplend upon loan draw-down. The completion fee mentioned in the loan agreement in question is actually what we typically refer to as the Arrangement Fee - apologies we'll try to be more consistent with our usage. Our Arrangement Fee is 2% - the loan request goes into more detail about how/if this is split. Please feel free to get in touch with us if you'd like us to answer any specific questions about this loan. Thanks, Richard
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sapphire
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Post by sapphire on Dec 21, 2017 8:14:53 GMT
Good morning sapphire I believe you're actually talking about the Burton loan (not the Birmingham Office Block loan this thread relates to), so perhaps start a new thread to continue to discuss. I can however confirm that there is only ever one fee payable to Proplend upon loan draw-down. The completion fee mentioned in the loan agreement in question is actually what we typically refer to as the Arrangement Fee - apologies we'll try to be more consistent with our usage. Our Arrangement Fee is 2% - the loan request goes into more detail about how/if this is split. Please feel free to get in touch with us if you'd like us to answer any specific questions about this loan. Thanks, Richard My apologies for getting the two deals mixed up. Yes, it would be good if a consistent terminology is used across various documents. I think Proplend's "Loan Request Summary" document is amongst the good ones in the industry. From an investor's perspective it would be helpful if the following information is grouped together and easily accessible in one place in the Loan Request Summary: Assuming the loan is paid on maturity: A. The Total interest, charges and fees payable by the borrower (interest, arrangement fees, broker fees etc.) B. The Total amount which the investors would receive as interest (net of Proplend's 10% fees). C. The Total amount which Proplend would receive (as arrangement fees, 10% share of the interest etc.) D. The Total amount which third parties would receive (Brokers, Valuers etc.). I expect A=B+C+D.
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