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Post by mrclondon on Jul 12, 2019 20:09:48 GMT
My thanks to the 2 people who bought my stake in the first ranking loan over the last few hours.
I put it uo for sale once I saw today's listing state it was a 2nd charge loan (now corrected ?? to 1st). I don't understand what is going on with this loan, and I've simply lost confidence in it, so am happy for others to take over my exposure. It was already active 114 days due to a long wait for activation, and even with the 1% discount I offered, it only offered a maturity yield of a fraction over the 13% nominal value for basic rate tax payers purchasing it.
To be honest, I'm rapidly losing confidence in FS full stop. I have already posted that I won't bid on loans longer than 6 month term (due to the block on SM sales below -1%), and I certainly won't be bidding on any loan when there is no interest accruing before activation. That's turning the clock back to 2013, and it made no more sense then than it does now. I assume that FS are struggling financially, and are attempting to retain more of the fees paid by the borrowers.
EDITED to add footnote: If this loan had been in England & Wales, I would have simply paid £3 to check whether it was 1st/2nd charge at the land registry. But in Scotland, its not so easy, so the only prudent course of action was to exit the loan.
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Post by df on Jul 12, 2019 20:26:06 GMT
2x£500 "gambles" now. It will be interesting to watch how 2nd charge @9% with no instant return will progress. £7075 of 1st charge is currently available on SM @15% and more @14%. 3 x £500 now. What planet are they living on. Somebody could apply this question to my behaviour when I've made my first investment on RS back in 2016 (2k @ 2.8% on 1-year market) - I didn't have a clue what I'm doing... I guess this is the case with those who throwing £500 into 9% 2nd charge instead of 1st charge @15%. Best of luck, who knows, it might work out OK and they'll get their capital back and £22.50 reward for the risk they've taken in January, but they won't have any chance selling their investments on SM at any discount - I see it as a 6 months high risk/low rate bond. 3 more joined the party - 6 x £500 now.
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Post by df on Jul 12, 2019 20:43:32 GMT
My thanks to the 2 people who bought my stake in the first ranking loan over the last few hours.
I put it uo for sale once I saw today's listing state it was a 2nd charge loan (now corrected ?? to 1st). I don't understand what is going on with this loan, and I've simply lost confidence in it, so am happy for others to take over my exposure. It was already active 114 days due to a long wait for activation, and even with the 1% discount I offered, it only offered a maturity yield of a fraction over the 13% nominal value for basic rate tax payers purchasing it.
To be honest, I'm rapidly losing confidence in FS full stop. I have already posted that I won't bid on loans longer than 6 month term (due to the block on SM sales below -1%), and I certainly won't be bidding on any loan when there is no interest accruing before activation. That's turning the clock back to 2013, and it made no more sense then than it does now. I assume that FS are struggling financially, and are attempting to retain more of the fees paid by the borrowers. The queue has indeed shifted and it looks as I might be thanking someone this evening too (fingers crossed). It was the last FS property loan I've decided to give a go, just before new "minimums" were introduced. I'm still actively investing in pawn, but not FS property.
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adrian77
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Post by adrian77 on Jul 12, 2019 20:46:38 GMT
totally agree with the above - just demolishing the existing building is going to be expensive to do and won't be a quick job so the site will be earning nothing whilst clocking up interest. You can't exactly blow the foundations and let it collapse as the neighbours would not like it! I guess it will need to be stripped, and pulled down inwards from the top with protective scaffolding etc erected. This one looks like Russian Roulette to me and a long-term project not suited to short term high interest rates.
I too just don't understand why anybody would invest in it! Maybe I am being thick and missing something?
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rocky1
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Post by rocky1 on Jul 13, 2019 3:47:14 GMT
Odds on the demolition of this building taking place any time soon.not very likely,these funds are being used elsewhere and this will not be touched only used for more funds for fees/planning/etc very much in the style of mr SD of LY history.i have noticed that this building has been due for demolition for many years and it has been stated that any new owner might have added expense due to the large amount of asbestos that is within the building.maybe this is the real reason the borrower is holding back and not the nonsense reason in the loan description.
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adrian77
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Post by adrian77 on Jul 13, 2019 9:04:55 GMT
I missed that but that is an additional headache and expense. Personally I restore rather then knock down buildings (although this one has zero merit to me). Just as a matter of personal interest is there anybody in the demolition business etc who could comment how much this is likely to cost and how long it is likely to take. I would guess very expensive due to plant hire. major scaffolding, disposal costs and transfer to land-fill or whatever - I thank you.
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iRobot
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Post by iRobot on Jul 13, 2019 12:27:58 GMT
I missed that but that is an additional headache and expense. Personally I restore rather then knock down buildings (although this one has zero merit to me). Just as a matter of personal interest is there anybody in the demolition business etc who could comment how much this is likely to cost and how long it is likely to take. I would guess very expensive due to plant hire. major scaffolding, disposal costs and transfer to land-fill or whatever - I thank you. You may wish to acquaint yourselves with the June 2019 VR. "34.5 ASBESTOS Whilst we are not aware of the existence of either asbestos at the Property or an Asbestos Management Plan in accordance with the Control of Asbestos Regulations (CAR) 2012, we have assumed that steps have been taken to comply with the regulations and that an Asbestos Management Plan is in place. We have been advised
that any asbestos has already been removed from the site." That ties in with FS' statement " We have had confirmation that whilst the developer has stripped the site ready for demolition" and my own, very limited (non-physical!) exposure to this sort of situation where any asbestos present in a building was carefully - and at no small expense - removed prior to the actual demolition. (Logically, it's impossible to effectively manage the presence of airborne particulates when the dynamite and/or bulldozers have free reign of the site.) BTW - did you know that each year in the UK, more people die from an asbestos related disease than from road traffic accidents?
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Doc
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Post by Doc on Jul 18, 2019 11:11:19 GMT
fundingsecure - you have an error in the latest loan listing due to go live at 4pm (and the email sent announcing it) - it should be 14% not 9% Hmmm ....
I'm sure the listing contained the same line as the email
In the event of a default this loan will rank behind previous ones. We are therefore offering an increased rate of 14% Rates have just been increased on the Clyde Street and Ladybank loans - I think the error in listing the new tranches at a lower rate than previous tranches has been realised.
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adrian77
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Post by adrian77 on Jul 18, 2019 17:10:49 GMT
My architect tells me that hotels are very expensive to build and can easily be 3 or more times the cost of standard houses. I have never heard of some large projects being funded by short- time high interest rates so this is an interesting one to follow. As I have said before if this one is such a cash cow then why does the developer need to borrow at such high rates...
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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 Jul 18, 2019 19:15:28 GMT
MT successfully funded one ... well a holiday inn
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trium
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Post by trium on Jul 20, 2019 15:11:44 GMT
My concern with this loan (which I am in at about 150% above normal exposure) is what happens if/when the supplemental fails to fill. Being one of the new style loans, it gets cancelled and funds are returned to lenders, leaving the borrower without funds to complete (let's suppose that's what he intends to do). The supposedly predetermined date for activation/cancellation is so far undeclared but I don't see too many lenders stampeding to stump up a minimum £500 to start earning interest goodness knows when, if at all, so I'm now sitting uneasily on my primary investment watching how the supplemental is going (and if MrC is out, I should be out too)
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rogerthat
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Post by rogerthat on Jul 20, 2019 15:58:12 GMT
Seems to me you've answered your own dilemma...SELL
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09dolphin
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Post by 09dolphin on Jul 20, 2019 17:58:39 GMT
Seems to me you've answered your own dilemma...SELL The problem will be is if there is anyone who wants to buy even at a 1% discount. If nobody buys you are left holding the proverbial baby. There seems to be a lesson here. If you know there are multiple tranches how will you react if a tranche is not filled and what will FS do to ensure you are protected. Perhaps we can all take a lesson from the debacle of Whitehaven where there were multiple tranches under the 1st charge.
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rogerthat
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Post by rogerthat on Jul 20, 2019 18:31:14 GMT
Seems to me you've answered your own dilemma...SELL
There seems to be a lesson here. If you know there are multiple tranches how will you react if a tranche is not filled and what will FS do to ensure you are protected. Perhaps we can all take a lesson from the debacle of Whitehaven where there were multiple tranches under the 1st charge. Indeedy..I almost typed "tell me about it"..so I did anyway  ..without wanting to attract any moths with an incendiary comment, a certain house in Wales is a classic example..prior tranche/s were already overdue, yet FS still issued more. I put the majority %age of my stake in the earlier tranches knowing full well that it would require more tranche/s to fulfil the 1st facility but instead of renewing the overdues first, they issued more. Another fine mess.
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Godanubis
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Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Jul 20, 2019 20:19:07 GMT
With FS now offering loans that only accrue interest after activation those of you that buy new loans need to be more diligent or you could have months of your money inaccessible and not gaining interest.
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..without wanting to attract any moths with an incendiary comment, a certain house in Wales is a classic example..prior tranche/s were already overdue, yet FS still issued more. I put the majority %age of my stake in the earlier tranches knowing full well that it would require more tranche/s to fulfil the 1st facility but instead of renewing the overdues first, they issued more. Another fine mess.