cb25
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Post by cb25 on Aug 8, 2018 16:28:22 GMT
I understand the wish/need to sell 5 plots at a discount, but I'm at a bit of a loss to understand why "£30,000 per plot is held back by H*** H*** until they have completed on all five properties". Surely money other than a deposit (and £30K/plot seems too high to be a deposit) is always held back until completion ?
Also, not sure I like "The loan amount remains unchanged from the original Credit Report but there is potential for the total facility to gross development value to increase from 68.8% to 83.7%"
What do other lenders think ?
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angrysaveruk
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Say No To T.D.S
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Post by angrysaveruk on Aug 8, 2018 16:52:01 GMT
As long as I get my money back I dont care tbh. I assume if they could sell them for more they would.
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rick24
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Post by rick24 on Aug 8, 2018 18:52:39 GMT
Depends whether you regard the buyers as a good prospect. I had a look on their website. They look legit. Haven't looked into their financial record. If it pays off the loan quicker, I would be in favour, albeit it involves a bit of juggling.
Edit: I note that Property Partner often buy their properties at a 10% discount for a bulk buy, so this wouldn't be outrageous by that standard (just short of 10% when fully settled).
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Post by brightspark on Aug 8, 2018 20:30:17 GMT
I like things kept simple so not for me. In particular I don't like the £30k per plot held back.
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Post by df on Aug 8, 2018 21:22:38 GMT
I understand the wish/need to sell 5 plots at a discount, but I'm at a bit of a loss to understand why "£30,000 per plot is held back by H*** H*** until they have completed on all five properties". Surely money other than a deposit (and £30K/plot seems too high to be a deposit) is always held back until completion ?
Also, not sure I like "The loan amount remains unchanged from the original Credit Report but there is potential for the total facility to gross development value to increase from 68.8% to 83.7%"
What do other lenders think ?
I don't think GDV increase makes much difference in the event of default. To me option A looks like a reasonable one. Earlier repayment would be nice.
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baldpate
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Post by baldpate on Aug 8, 2018 21:34:48 GMT
I understand the wish/need to sell 5 plots at a discount, but I'm at a bit of a loss to understand why "£30,000 per plot is held back by H*** H*** until they have completed on all five properties". Surely money other than a deposit (and £30K/plot seems too high to be a deposit) is always held back until completion ? I believe the 'completion' being referred to is completion of the eventual onward sales by H*** H***. In other words, HH with defer payment of the final £150K due to our borrower/us until they themselves have completed their onward sale of all 5 properties (note: "ALL five properties" - the proposal, as formulated, isn't to release £30K at a time, as each onward sale completes). Very nice deal for HH, not so good for us lenders.
Guess which way I'll be voting!
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baldpate
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Post by baldpate on Aug 8, 2018 21:43:04 GMT
Depends whether you regard the buyers as a good prospect. I had a look on their website. They look legit. Haven't looked into their financial record. If it pays off the loan quicker, I would be in favour, albeit it involves a bit of juggling. Edit: I note that Property Partner often buy their properties at a 10% discount for a bulk buy, so this wouldn't be outrageous by that standard (just short of 10% when fully settled). Whilst I agree with you about a discount of around 10% for bulk buy being reasonable, I am very unhappy about being asked to make what amounts to an unsecured loan of £150K to a third party.
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cb25
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Post by cb25 on Aug 9, 2018 8:52:23 GMT
Depends whether you regard the buyers as a good prospect. I had a look on their website. They look legit. Haven't looked into their financial record. If it pays off the loan quicker, I would be in favour, albeit it involves a bit of juggling. Edit: I note that Property Partner often buy their properties at a 10% discount for a bulk buy, so this wouldn't be outrageous by that standard (just short of 10% when fully settled). Whilst I agree with you about a discount of around 10% for bulk buy being reasonable, I am very unhappy about being asked to make what amounts to an unsecured loan of £150K to a third party. I agree and have voted B
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rick24
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Post by rick24 on Aug 9, 2018 10:32:58 GMT
I understand the wish/need to sell 5 plots at a discount, but I'm at a bit of a loss to understand why "£30,000 per plot is held back by H*** H*** until they have completed on all five properties". Surely money other than a deposit (and £30K/plot seems too high to be a deposit) is always held back until completion ? I believe the 'completion' being referred to is completion of the eventual onward sales by H*** H***. In other words, HH with defer payment of the final £150K due to our borrower/us until they themselves have completed their onward sale of all 5 properties (note: "ALL five properties" - the proposal, as formulated, isn't to release £30K at a time, as each onward sale completes). Very nice deal for HH, not so good for us lenders.
Guess which way I'll be voting!
That's not the way I interpret it, given the additional comment: " we will hold a Solicitors Undertaking for the residual £150,000, conditional on all five properties being delivered." That seems to suggest that the completion = delivery of the properties from the builders to HH, rather than onward sale by HH. It's the 'unsecured loan' element that makes me feel a little insecure.
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cb25
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Post by cb25 on Aug 9, 2018 10:35:14 GMT
I believe the 'completion' being referred to is completion of the eventual onward sales by H*** H***. In other words, HH with defer payment of the final £150K due to our borrower/us until they themselves have completed their onward sale of all 5 properties (note: "ALL five properties" - the proposal, as formulated, isn't to release £30K at a time, as each onward sale completes). Very nice deal for HH, not so good for us lenders.
Guess which way I'll be voting!
That's not the way I interpret it, given the additional comment: " we will hold a Solicitors Undertaking for the residual £150,000, conditional on all five properties being delivered." That seems to suggest that the completion = delivery of the properties from the builders to HH, rather than onward sale by HH. It's the 'unsecured loan' element that makes me feel a little insecure. I wouldn't have expected HH to pay 100% of the monies until they'd received the properties, which is what made me thinking I'm missing something here.
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rick24
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Post by rick24 on Aug 9, 2018 10:38:22 GMT
Think I would be more concerned about lack of other sales.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Aug 9, 2018 10:40:15 GMT
Will wait until Q is answered as seems to have lost much in translation
I assume people have spotted there are two votes?
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cb25
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Post by cb25 on Aug 9, 2018 11:34:20 GMT
AC's answer in the Q&A
The £30,000 per plot is not a deposit.
HH operate on the basis they take a minimum of five units at a time. They have buyers lined up for these but as they will not all complete contemporaneously, they withhold an amount, in this case £150,000 – the deferred payment is effectively their ‘condition’ for making sure all 5 houses are completed and delivered.
That said the borrowers do fully expect to receive these funds in early course as this represents an element of their profit.
In the event the amount is not paid, there is still sufficient value within the development to repay Investors in full.
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ton27
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Post by ton27 on Aug 9, 2018 12:20:09 GMT
My vote was a B - I do not mind waiting longer for the loan to repay.
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cb25
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Post by cb25 on Aug 9, 2018 16:54:21 GMT
The vote has been re-issued, as AC apparently got some figures wrong the first time (see AC's Q&A for question by AMS).
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