Post by jjc on Jul 28, 2014 14:26:19 GMT
Interesting comments but returning to the subject of this thread I'm surprised this loan isn't filling more quickly.
Rate issues aside, it's a small loan easily tradeable on AM, marginal development risk (planning consent already obtained, not a complex construction, experienced developer), works already commenced in May (already half-way through expected 18 weeks build-out time), presumably a v. fast drawdown will follow, easily sellable asset, credible (& perhaps conservative) market valuation, short duration and likely to extend perhaps with some default interest whilst under negotiation - ie ticks many boxes that other bigger loans available now don't.
So where's the catch? Or is it just the weekend effect/lenders away on hols?
I'm considering increasing my bid now the 2k limit has been lifted (beyond what I would normally consider sensible), would be interested in other lender's views on this loan.
The possible issues that spring to mind are:
- possibly lax duedil/conflict of interest due to the borrower's architect doubling up as monitoring surveyor (this however can be addressed by AC's experience making sure the progress steps are properly specified & followed)
- the significant discrepancy between what the borrower is planning to spend & what the valuation expected would be necessary (presumably due to the high-spec finishings planned), & the differences in the completed property valuation (risk of overspeccing? should presumably be unlikely given the borrower is said to be an experienced developer)
- the "shortfall of funds" risk mentioned on page 1 of the CR - given the borrower is asset-rich this suggests that he may have temporary cash-flow issues, that said he could presumably spec-down the finishings if necessary without risking having to sell at lower than the £250k estimation
all told then it appears to be an easily digestible, simple & lower-risk development than other loans of this type offering a similar return..but maybe I'm missing something..
I haven't been able to find any garage or similar listed at 1 Maryland Road, N22 on Google Maps, am guessing it's the plot (with black garage doors, or the adjacent one) next to the first terraced house on the northern pavement at the western end of Maryland Rd, any shedding of light most welcome
Rate issues aside, it's a small loan easily tradeable on AM, marginal development risk (planning consent already obtained, not a complex construction, experienced developer), works already commenced in May (already half-way through expected 18 weeks build-out time), presumably a v. fast drawdown will follow, easily sellable asset, credible (& perhaps conservative) market valuation, short duration and likely to extend perhaps with some default interest whilst under negotiation - ie ticks many boxes that other bigger loans available now don't.
So where's the catch? Or is it just the weekend effect/lenders away on hols?
I'm considering increasing my bid now the 2k limit has been lifted (beyond what I would normally consider sensible), would be interested in other lender's views on this loan.
The possible issues that spring to mind are:
- possibly lax duedil/conflict of interest due to the borrower's architect doubling up as monitoring surveyor (this however can be addressed by AC's experience making sure the progress steps are properly specified & followed)
- the significant discrepancy between what the borrower is planning to spend & what the valuation expected would be necessary (presumably due to the high-spec finishings planned), & the differences in the completed property valuation (risk of overspeccing? should presumably be unlikely given the borrower is said to be an experienced developer)
- the "shortfall of funds" risk mentioned on page 1 of the CR - given the borrower is asset-rich this suggests that he may have temporary cash-flow issues, that said he could presumably spec-down the finishings if necessary without risking having to sell at lower than the £250k estimation
all told then it appears to be an easily digestible, simple & lower-risk development than other loans of this type offering a similar return..but maybe I'm missing something..
I haven't been able to find any garage or similar listed at 1 Maryland Road, N22 on Google Maps, am guessing it's the plot (with black garage doors, or the adjacent one) next to the first terraced house on the northern pavement at the western end of Maryland Rd, any shedding of light most welcome
