mullet
Member of DD Central
Posts: 126 
Likes: 137
|
Post by mullet on Dec 21, 2017 16:26:34 GMT
Can someone explain to me how the properties are now worth £65k each despite being purchased only a few months ago for 31k and 33k (albeit those purchase prices do look disproportionately cheap for the area)
|
|
kermie
Member of DD Central
Posts: 691
Likes: 462
|
Post by kermie on Dec 21, 2017 16:57:15 GMT
I cannot. I suspect they were bought, refurbished and then tenanted; but that's pure speculation.
If the valuation's rental of £475/month is to be believed, the borrower is making a 9.5% p.a. return. You'll not see that down south with BTL!
|
|
ozboy
Member of DD Central
Mine's a Large One! (Snigger, snigger .......)
Posts: 3,168
Likes: 4,859
|
Post by ozboy on Dec 21, 2017 17:06:13 GMT
22 has, in the VR, "been extensively refurbished and extended", so I guess its mate next door has too? (No time to read another VR)
|
|
|
|
Post by charlata on Dec 21, 2017 17:22:22 GMT
The sale prices do seem anomalously low. If the stated rent figure of £475 a month is true, that's an 18% yield on purchase price.
Graham J. s is the only valuer I've seen on any loan anywhere who just asserts a value without giving any indication of how he arrived at it. I can only assume he is very cheap.
|
|
michaelc
Member of DD Central
Say No To T.D.S.
Posts: 5,717
Likes: 2,986
|
Post by michaelc on Dec 21, 2017 18:19:25 GMT
I have to say I'm VERY angry about this. So much so that unless I hear a good explanation from FS I'll be withdrawing from the platform completely.
How can this "valuer" come to such a conclusion? How can he get away with it? Its almost a bare faced lie. When more of these type of loans go sour, I really do hope some of these valuers end up getting sued.
|
|
|
|
Post by mrclondon on Dec 21, 2017 18:51:02 GMT
Not sure anything can be read into those recent sale prices of £31k and £34k. They are as others have pointed out suspiciously low, and given the lack of any obvious evidence that they have been marketed this year, those prices could be as a result of a transfer between connected parties.
The VR OMV of £65k each based on a rental yield of £475 pcm and the surveryor not noting any obvious defects, feels about right to me.
To recover the capital and say 12 months accrued interest plus recovery fees they would need to sell for around £50k each which would be an invetsment yield of 11.4%.
EDIT: Google is throwing up quite a bit of evidence that £450-£475 pcm is the "going rate" for these 2 bed terraced properties.
|
|
michaelc
Member of DD Central
Say No To T.D.S.
Posts: 5,717
Likes: 2,986
|
Post by michaelc on Dec 21, 2017 19:14:57 GMT
Not sure anything can be read into those recent sale prices of £31k and £34k. They are as others have pointed out suspiciously low, and given the lack of any obvious evidence that they have been marketed this year, those prices could be as a result of a transfer between connected parties. The VR OMV of £65k each based on a rental yield of £475 pcm and the surveryor not noting any obvious defects, feels about right to me. To recover the capital and say 12 months accrued interest plus recovery fees they would need to sell for around £50k each which would be an invetsment yield of 11.4%. And breath.... (me that is !) Feel a lot calmer now - thanks Looking a little more I notice that one of them was sold for 55K in Dec 2014 and there's nothing so bad about or different about them that they should be valued at 50% of the other properties on the road. In which case, this is moving from being disastrous to being quite a nice loan....
|
|
adrian77
Member of DD Central
Posts: 3,920
Likes: 4,145
|
Post by adrian77 on Dec 21, 2017 19:17:49 GMT
I have no idea but I wonder if it was sold with problem tenants - for the record I no longer offer accommodation to DHS claimants. One of the houses looks in poor condition in Google maps
Also £65K seems on the top end to me - I think I will pass on this one....
|
|
james21
Member of DD Central
Posts: 651
Likes: 669
|
Post by james21 on Dec 21, 2017 19:29:02 GMT
Clearly this is another loan to FS largest borrower; NW based Merseyside focused. The valuation is overstated. I will avoid
|
|
ozboy
Member of DD Central
Mine's a Large One! (Snigger, snigger .......)
Posts: 3,168
Likes: 4,859
|
Post by ozboy on Dec 21, 2017 19:36:33 GMT
I have to say I'm VERY angry about this. So much so that unless I hear a good explanation from FS [1] I'll be withdrawing from the platform completely.
How can this "valuer" come to such a conclusion? How can he get away with it? Its almost a bare faced lie. When more of these type of loans go sour, [2] I really do hope some of these valuers end up getting sued.[1] Are they bovvered?  [2] You, me, and everyone else on this site who is an Investor. 
|
|
r1200gs
Member of DD Central
Posts: 1,336
Likes: 1,883
|
Post by r1200gs on Dec 22, 2017 9:49:25 GMT
65K seems a bit high to me(oh what a surprise!) but these are surely going to sell for 50K in decent nick with a tenant paying £475. Heck, I might buy them myself for that!
|
|
|
|
Post by ribble on Dec 22, 2017 11:01:02 GMT
Updated 30mins ago. Some photos added.
|
|
jonno
Member of DD Central
nil satis nisi optimum
Posts: 2,808
Likes: 3,242
|
Post by jonno on Dec 22, 2017 11:09:28 GMT
It is possible to pick up some real property bargains around Liverpool if they need serious renovation. I picked one up a few years ago for £15k (yes £15k) spent £25K on it and sold it in weeks for £65K. So it can be done in this area.
|
|
michaelc
Member of DD Central
Say No To T.D.S.
Posts: 5,717
Likes: 2,986
|
Post by michaelc on Dec 22, 2017 14:52:28 GMT
This was a loan to a new borrower. Think I'll be more careful in future whose "DD" I take note of .
|
|
mikes1531
Member of DD Central
Posts: 6,453
Likes: 2,320
|
Post by mikes1531 on Dec 30, 2017 2:13:38 GMT
It is possible to pick up some real property bargains around Liverpool if they need serious renovation. I picked one up a few years ago for £15k (yes £15k) spent £25K on it and sold it in weeks for £65K. So it can be done in this area. The House Crowd started out a few years ago doing that in the area around Manchester using crowdfunding. In general, though, the results have been somewhat disappointing, with some DHS tenants being problematical and nicely refurbished houses seemingly needing re-refurbishing a couple years later. I don't know how much impact HMG moves to reduce the attractiveness of BtL -- especially for companies/SPVs -- have had, but THC's strategy has changed completely and they're now doing lending rather than BtL these days.
|
|
