Commercial Property deal launching on the 29th

"Googling redditch restaurant fire may or may not provide further background"

..................... post deleted ... old news.

I tried that, and found myself looking at a list of accountants in Redditch.

I looked a bit more closely at the various firms listed, but didn't find one that matched the details in the credit report.  What have I missed?

Perhaps I'm just thick, but how am I supposed to get from that list to any useful info?

I think I found two that had offices in two of the three locations mentioned in the credit report, but not one that had all three of the locations.  And I didn't find one that was established at about the time mentioned in the CR.  I'll admit that I didn't go beyond the first page of results, so perhaps I didn't dig deep enough.

It probably doesn't matter, though, as I'm not sure what I'd gain by knowing which firm it was unless, like you, I had access to the sort of additional info you do.

One thing that did concern me, however, was the possible drawdown delay that might occur.  The borrower clearly has access to the property already because the ground floor refurbishment is progressing.  Once the loan is funded,the borrower knows they can have the loan whenever they like, so that uncertainty goes away for them.  So what incentive does the borrower have to draw down promptly and complete the sale?  Since interest starts accruing at drawdown, why shouldn't they want to delay that as long as possible?  I've asked a question to that effect, and it will be interesting to see what sort of a response we get.

The security looks about as secure to other similar loans I've invested in, but, my overriding concern though is the current state of health of the borrower. If he's got a nasty bout of flu and been told bed rest for 2 weeks would help, that is one thing but without knowing it's not something more sinister I think I'll wait for the next bridging loan at a higher rate. Given that this could, as indicated, be possibly over in 6 months I'm not overly enthusiastic.

The full credit report is now attached to the loan request along with the Sept 2013 valuation.

The credit report largely confirms what I had already deduced with the help of google, but the valuation report makes for rather depressing reading.




It may have been "old" news but it was also highly relevant news. The original fire was 2008, yet the property has still not returned to use, indeed a second fire occured in 2012 caused it seems by the builders. And we now read that in Sept 2013 the building was still a shell. Whilst the credit report does state "Assetz Capital has visited the property in November 2013 and found that much of the refurbishment was well on course", this strikes me as being a bit vague.

Also the description of the current access to the upper floors sounds as if conversion will not be straightforward. I think the risk of very early refinancing from a mainstream lender is lower than some may perceive.

On reflection I think this one may struggle at its current rate of 10.5%, although it has gained new momentum today. I may still contribute but would be happier at 12%.

In addition to the 'after refurbishment' valuation we have been given, I would have liked to see a 'current state' valuation, as that's what we'll have for security at the time of drawdown.  It's encouraging that the refurbishment is already in progress, but until it's complete -- or very nearly so -- all we have is a shell, and I haven't a clue what sort of LTV we really have.  Also, why wasn't the valuer allowed access to the second floor?

The access above the ground floor also struck me as awkward and unhelpful.  And putting five flats into just 2500 square feet strikes me as rather ambitious, especially as some of that space is bound to be lost to internal hall/lobby/stairs.  I have no feel for achievable rents -- is £500/month reasonable for a 450 s.f. flat?

Today's 'momentum' came nearly all from a single £25k bidder late in the day, though there were four other bids of £1k or more that provided another £8.5k.  We'll see tomorrow whether being nearly 50% fulfilled will encourage more participation.  If not, then an interest rate increase may be necessary to create some more enthusiasm.

General question:  If the interest rate were to be increased, would that apply to all bids?  Or just those bids made after the increase was announced?

Edited to fix one of the quotes.