R*******e Avenue, Warrington (2235181450 - final id) DEFAULT

Forgive me for not calling this one 'ours', I am reluctant to become overly attached to it.

The rot only concerns the detached garage woodwork, 35 year old electrics would in theory only need a new con unit and supplementary earthing upgrade. The central heating would again mostly be a replacement boiler and new radiators. House buyers rarely look beyond the decor, and patently surveyors even less.

Having said that the current valuation is obviously high, when are they not?

Yes, the valuation is a joke but TBH I've checked the Zoopla estimate (about £230k) so there's plenty of room for error.

I'd rather lend at 65% residential than say 40% on anything weird and wonderful... like castles and half finished holiday parks

Agree but what concerns me was a combination of the renovation work needed and the possibility there was or could be a problem tenant in the house. As I have said before I buy and sell distressed properties and pay nowhere near the estate agent's market valuation. 
Not the worst loan on the block but lack of info for me to risk my shekels.

That said looks a better bet than some other recent property loans!

Badly Drawn Stickman and Jeepers :  It looks to me as if you are presuming the property would be sold after six months, i.e. as soon as the borrower doesn't repay the loan at the end of the term.  IMHO, that's incredibly overoptimistic.  Based on what I've seen happen on other loans -- at FS and on other platforms -- the reality is likely to look more like...

• Firstly, there will be a delay while the borrower claims they'll pay the interest and renew the loan, or that they're working on a refinance. 
  
• It would be a few months, at best, before FS would be convinced that the borrower is making so little progress that they need to appoint receivers. 
  
• once appointed, the receivers will take a couple of months to put together their proposed plan of action.
• The property would go on the market and stay there for a minimum of 2-3 months.
• Potential buyers will know that it's receivers selling the property, so any offers received will be at quite a discount from the actual 'market value'.
• If no acceptable offers are received, a decision will be taken to put the property up for auction.
• There will be a month or two delay waiting for an appropriate auction.
• With a bit of luck, the bidding will reach the reserve price, and the buyer will then have a month to complete the sale.
• (If the reserve isn't reached, go back a couple steps and wait for another auction...

I'd guess the whole process would take about a year after the loan matures, so instead of needing a sale at £155-160k for a full recovery of the £138k loan, it would require a sale for more like £200k, especially as there will have extra costs mounting up during the process.

Please don't get me wrong.  I'm not suggesting this is a bad loan.  I've put some money into it myself.  But I feel that if the borrower doesn't repay it will be a struggle to make a full recovery.  I'm hoping that recovery of all capital would be possible.

Having read the VR, I got the impression that a fair amount of refurbishment/updating would be required to bring this property up to the standard of the others for which there are recently sold prices available.  Hence, I didn't think it would be easy to achieve similar prices.

But that's JMHO.

A 25% 'platform incompetence levy' might well be in order whilst doing due diligence. I have a full week of experience of using FS so am probably not well placed to judge (I have however followed their progress on here for some time).

My contribution was a self serving attempt to encourage a return to the levels of DD this platform is capable of achieving, especially with the advent of DDc. Even with the very small amount of information that was supplied, i'm pretty sure the right people on here could have discovered the owners identity and background and probably have traced their family tree back ten generations.