seb8072
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Post by seb8072 on Apr 1, 2018 16:22:18 GMT
I’m new to the forum to apologies I can’t work out how to reply to a post and quote , ... Just click on the "Quote" button at the top right of the post you want to quote.
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Imothep
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Post by Imothep on Apr 1, 2018 16:44:32 GMT
thanks, i was using the one for the post below !
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zedi
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Post by zedi on Apr 3, 2018 12:43:15 GMT
I would expect development loans and bridging loans on developed prop to have similar risks in normal economic environments (it´s always project specific and the risk may vary) but behave differently in a economic downturn/real estate bubble/platform failure. Both may run into liquidity problems if they cannot sell/refinance the property but as already mentioned above, the security market value of developement loans may be much lower than the loan value in certain project states. I would expect refinancing a development loan in a chaotic market environment to be quite difficult...
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zedi
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Post by zedi on Apr 3, 2018 12:47:12 GMT
Does anyone know sources for historic return/default rates of development and also bridging loans? Those sources can easily be found for consumer loans (credit card debts) or morgages but so far I haven´t found anything similar for these more risky property loans.
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Imothep
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Post by Imothep on Apr 4, 2018 19:06:04 GMT
Does anyone know sources for historic return/default rates of development and also bridging loans? Those sources can easily be found for consumer loans (credit card debts) or morgages but so far I haven´t found anything similar for these more risky property loans. if development loans are underwitten properly they are no more risky than others , if lenders stick to less than 70% of GDV, 80% of cost, the site has been properly valued , a QS has verified the consruction costs and the stage payments are only given on works completed with no materials off site payments and more importantly the lenders rep visits or gets a monthly report then they offer a great return ...
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zedi
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Post by zedi on Apr 4, 2018 22:41:38 GMT
Does anyone know sources for historic return/default rates of development and also bridging loans? Those sources can easily be found for consumer loans (credit card debts) or morgages but so far I haven´t found anything similar for these more risky property loans. if development loans are underwitten properly they are no more risky than others , if lenders stick to less than 70% of GDV, 80% of cost, the site has been properly valued , a QS has verified the consruction costs and the stage payments are only given on works completed with no materials off site payments and more importantly the lenders rep visits or gets a monthly report then they offer a great return ... But then they won´t yield returns in the range of 7-14% as is the case with those on p2p-platforms... What interest rate would you roughly expect for such a properly underwritten development loan under the conditions you mentioned?
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sapphire
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Post by sapphire on Apr 5, 2018 16:59:17 GMT
I would be keen to know which platforms/providers, if any, offer development loans meeting the criteria mentioned by @imothep
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Imothep
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Post by Imothep on Apr 5, 2018 17:09:10 GMT
I would be keen to know which platforms/providers, if any, offer development loans meeting the criteria mentioned by @imothep i don’t know saphire, i’m going to research , but that’s the minimum i would expect to chuck my dough in ...
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Imothep
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Post by Imothep on Apr 5, 2018 17:11:06 GMT
if development loans are underwitten properly they are no more risky than others , if lenders stick to less than 70% of GDV, 80% of cost, the site has been properly valued , a QS has verified the consruction costs and the stage payments are only given on works completed with no materials off site payments and more importantly the lenders rep visits or gets a monthly report then they offer a great return ... But then they won´t yield returns in the range of 7-14% as is the case with those on p2p-platforms... What interest rate would you roughly expect for such a properly underwritten development loan under the conditions you mentioned? depends on lender , small developer specialist lender , say up to 2M, i guess , base plus 3 and one on the in and one on the out, wrapped to the end , 12 month facility , maybe cheaper
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zedi
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Post by zedi on Apr 5, 2018 18:35:53 GMT
But then they won´t yield returns in the range of 7-14% as is the case with those on p2p-platforms... What interest rate would you roughly expect for such a properly underwritten development loan under the conditions you mentioned? depends on lender , small developer specialist lender , say up to 2M, i guess , base plus 3 and one on the in and one on the out, wrapped to the end , 12 month facility , maybe cheaper Well, that would also be my guess for a "safe" developer loan but it´s way off what LY, MT, ABL or COL charge/charged...
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zedi
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Post by zedi on Apr 5, 2018 18:45:05 GMT
I would be keen to know which platforms/providers, if any, offer development loans meeting the criteria mentioned by @imothep Most of these criteria are hard to check from the distance. I would assess Assetz Capital and Kuflink as less risky as LY, MT, ABL or FS. Where Kuflink also invests alongside investors into each loan. I am sure there are also other lower risk platforms in this sector. The big problem that I see is that none of these property development/bridging loan related companies exists long enough to have seen (and survived) a market crash...that makes it hard to assess the risk properly and as mentioned above, I couldn´t finde any historic data to similar loans...
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Imothep
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Post by Imothep on Apr 6, 2018 19:21:18 GMT
I would be keen to know which platforms/providers, if any, offer development loans meeting the criteria mentioned by @imothep Most of these criteria are hard to check from the distance. I would assess Assetz Capital and Kuflink as less risky as LY, MT, ABL or FS. Where Kuflink also invests alongside investors into each loan. I am sure there are also other lower risk platforms in this sector. The big problem that I see is that none of these property development/bridging loan related companies exists long enough to have seen (and survived) a market crash...that makes it hard to assess the risk properly and as mentioned above, I couldn´t finde any historic data to similar loans... lol, if the property market crashes, the least of my worries will be the p2p platforms 
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