Property Development Loan structuring
Dec 15, 2017 18:33:42 GMT
kermie, locutus, and 2 more like this
Post by r00lish67 on Dec 15, 2017 18:33:42 GMT
There's a topic for a Friday evening...
fundingsecure , I'm currently pondering your newly available Scottish loan, and when it comes to the crunch what puts me off (aside from not being able to invest £100k and earn a bonus), is that once the 2nd part of the facility is launched and work is underway, the value of the property/land becomes that much more fluid, difficult to assess and moreover as a potential investor in the first tranche I have zero input as to what new value you ascribe to the progress and/or GDV, beyond trying to exit on the SM if required.
So, although I'm aware that this sometimes happens when a supplementary facility becomes required, have you given any thought to altering your proposition from the outset in terms of offering Senior/Junior tranches?
In general, I'd be far more comfortable as an investor in a senior 'Facility A' (up to £1.6m in this case, for example) whilst a subsequent junior 'Facility B' subordinate to A, also £1.6m could offered at a higher rate further down the line.
I mention this as a) I'd like it
and b) by the look of how Poole is filling, I appear to have investor counterparts who are more interested in the higher risk/higher rate end of the spectrum too.
Anyone else interested in this option being offered too? (not just for this loan)
Edit: I have a horrible feeling I've asked this before - if so, apologies, and you can blame Christmas/Friday night
fundingsecure , I'm currently pondering your newly available Scottish loan, and when it comes to the crunch what puts me off (aside from not being able to invest £100k and earn a bonus), is that once the 2nd part of the facility is launched and work is underway, the value of the property/land becomes that much more fluid, difficult to assess and moreover as a potential investor in the first tranche I have zero input as to what new value you ascribe to the progress and/or GDV, beyond trying to exit on the SM if required.
So, although I'm aware that this sometimes happens when a supplementary facility becomes required, have you given any thought to altering your proposition from the outset in terms of offering Senior/Junior tranches?
In general, I'd be far more comfortable as an investor in a senior 'Facility A' (up to £1.6m in this case, for example) whilst a subsequent junior 'Facility B' subordinate to A, also £1.6m could offered at a higher rate further down the line.
I mention this as a) I'd like it
and b) by the look of how Poole is filling, I appear to have investor counterparts who are more interested in the higher risk/higher rate end of the spectrum too.Anyone else interested in this option being offered too? (not just for this loan)
Edit: I have a horrible feeling I've asked this before - if so, apologies, and you can blame Christmas/Friday night
