ilmoro
Member of DD Central
'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 Apr 26, 2019 13:12:02 GMT
when doing a search of the director is anybody else smiling at the result that comes up like a swear word for a company name Indeed. Slightly amused that got away with calling the company this given its more popular usage and the nature of its business.
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blender
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Post by blender on Apr 26, 2019 13:20:57 GMT
Does the borrower actually own this property already? The borrowing proposal states on page 8 "The funds will be used to acquire and advance the site:". If not, then how can there be a reliable valuation which is twice the yet-to-be-completed purchase price which is disclosed in the proposal? I, too, am sufficiently confused and doubtful about this proposal that I'm not committing any funds. Presumably he has an option to purchase at that price and is seeking the finance. The valuation has been done for Ablrate. He seems to have negotiated a good deal - he would not be proceeding otherwise. I've taken a small punt, on the basis that the interest is pre-funded.
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macq
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Post by macq on Apr 26, 2019 13:25:59 GMT
when doing a search of the director is anybody else smiling at the result that comes up like a swear word for a company name Indeed. Slightly amused that got away with calling the company this given its more popular usage and the nature of its business. by popular do you mean on a t-shirt? shame the loan was not for that company as the puns would have been fun
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ilmoro
Member of DD Central
'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 Apr 26, 2019 13:42:22 GMT
Indeed. Slightly amused that got away with calling the company this given its more popular usage and the nature of its business. by popular do you mean on a t-shirt? shame the loan was not for that company as the puns would have been fun Yes. Ironically the associated company had issues over alcoholic beverages. Sometimes DD goes on strange tangents. More entertaining would have been ordering the Italian beer named like the company but it's no longer brewed.
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Post by Deleted on Apr 26, 2019 15:17:06 GMT
Just to be clear I know the Pool development is pretty good. The Otley Rugby club move is hardly rocket science and does not required a skilled developer as the lead player, he is leading the Rugby Union move because he is the head coach not because he is a skilled developer per se. I don't know the man but I live in the same area.
My concerns are
1) The personal guarantee is worthless as he has few assets.
2) The number of small sheds for lease between Hull and Rotherham is extraordinary. The reason why Doncaster is an un-employment black spot is not due to lack of sheds, but more to do with a lack of entreupreneurial spirit in the population. This is not part of the hub of exciting industrial ideas that makes up Harrogate/York/North Leeds. This is part of the disaster that makes up Doncaster/Sheffield/Rotherham and Wakefield. He can develop all he likes but if no one wants his sheds, he has blown it.
3) If the developer fails to sell on these sheds within the 12 months of the deal, that is it. The core cash flow is blown and we would then have to wait for a "bigger mug" to come and buy the asset from "us". 4) Yorkshire Water property disbursement is normally at a pretty tight price. I've bid or negotiated on two in my life and had to withdraw as the price they went for was too high for me. I doubt there is much profit left in the land. The only hidden money here is resi and I doubt the council could be walked around in one year.
I'm going to sit on my hands, unless anyone can convince me otherwise.
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Balder
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Post by Balder on Apr 26, 2019 15:26:56 GMT
This one at 1st pass does have more of a "Lendy" look about it.
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IFISAcava
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Post by IFISAcava on Apr 26, 2019 15:34:20 GMT
Just to be clear I know the Pool development is pretty good. The Otley Rugby club move is hardly rocket science and does not required a skilled developer as the lead player. I don't know the man but I live in the same area.
My concerns are
1) The personal guarantee is worthless as he has few assets.
2) The number of small sheds for lease between Hull and Rotherham is extraordinary. The reason why Doncaster is an un-employment black spot is not due to lack of sheds, but more to do with a lack of entreupreneurial spirit in the population. This is not part of the hub of exciting industrial ideas that makes up Harrogate/York/North Leeds. This is part of the disaster that makes up Doncaster/Sheffield/Rotherham and Wakefield. He can develop all he likes but if no one wants his sheds, he has blown it.
3) If the developer fails to sell on these sheds within the 12 months of the deal, that is it. The core cash flow is blown and we would then have to wait for a "bigger mug" to come and buy the asset from "us". 4) Yorkshire Water property disbursement is normally at a pretty tight price. I've bid or negotiated on two in my life and had to withdraw as the price they went for was too high for me. I doubt there is much profit left in the land. The only hidden money here is resi and I doubt the council could be walked around in one year.
I'm going to sit on my hands, unless anyone can convince me otherwise.
I might be persuaded by a discount on the SM, as it will likely need a hefty one to ever sell it. Almost all the interest only loans end up selling below par.
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blender
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Post by blender on Apr 26, 2019 15:36:27 GMT
You don't have to sell the sheds, Bobo. If lenders foresee shedloads of trouble then it will not fill and you will get your instant returns. If it does fill then you get up to twelve months of pre-paid interest, and it's up to you how long you hold. Your concerns are those of someone who needs to hold the loan to term. OK you may have to sell a little below par, but you start at 14% and if you sell at six months at 98% then you are still doing 10%. I prefer to believe that this borrower and ablrate know more about this opportunity than we do. Edit: Yes this one may get underwritten, but we have been told that underwriters may not sell under par - in the new package launched today but not unveiled to us in any detail.
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Post by ablrate on Apr 26, 2019 15:38:34 GMT
We think there needs to be some clarification here as the story is not as portrayed in some of the comments... but, as usual we appreciate feedback and will put together an addendum addressing the points above.
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SteveT
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Post by SteveT on Apr 26, 2019 15:39:12 GMT
ablrate, the VR raises the question of whether the site actually abuts the public highway or whether there may be a strip of 3rd-party owned land in between, which it recommends the "bank" should establish for certain before lending. Has this been done? I'm struggling to think why, having themselves applied to renew the planning consent just months ago, the water company is happy to sell the site to the borrower for £720k if it's worth anything like £1.5m. It's not like he's the one creating the planning gain (or risking a penny of his own money, for that matter)
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blender
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Post by blender on Apr 26, 2019 15:41:14 GMT
We think there needs to be some clarification here as the story is not as portrayed in some of the comments... but, as usual we appreciate feedback and will put together and addendum addressing the points above. The problem seems to be that people believe that the borrower has too good a deal to be true. You can't win.
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Post by Deleted on Apr 26, 2019 15:44:06 GMT
You don't have to sell the sheds, Bobo. If lenders foresee shedloads of trouble then it will not fill and you will get your instant returns. If it does fill then you get up to twelve months of pre-paid interest, and it's up to you how long you hold. Your concerns are those of someone who needs to hold the loan to term. OK you may have to sell a little below par, but you start at 14% and if you sell at six months at 98% then you are still doing 10%. I prefer to believe that this borrower and ablrate know more about this opportunity than we do. Edit: Yes this one may get underwritten, but we have been told that underwriters may not sell under par - in the new package launched today but not unveiled to us in any detail. Thanks blender, good points well made. My life requires fire & forget so....
Like you I suspect there may be a piece of knowledge here that is not being shared or I've missed.
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Post by ablrate on Apr 26, 2019 15:52:14 GMT
ablrate , the VR raises the question of whether the site actually abuts the public highway or whether there may be a strip of 3rd-party owned land in between, which it recommends the "bank" should establish for certain before lending. Has this been done? I'm struggling to think why, having themselves applied to renew the planning consent just months ago, the water company is happy to sell the site to the borrower for £720k if it's worth anything like £1.5m. It's not like he's the one creating the planning gain (or risking a penny of his own money, for that matter) They had bought an option to purchase the land at that price prior to doing work on the planning and zoning...and then exercised that option when they progressed. We will see what other comments come in over the weekend and do an addendum.
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sapphire
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Post by sapphire on Apr 27, 2019 9:56:53 GMT
ablrate In the planned Addendum it would be helpful if you could clarify: a. The total amount personally spent by the borrower to date (for buying the option to purchase the land and any other costs/fees incurred) and the total amount expected to be personally spent going forward (i.e. in addition to the funds from this loan). (This will help highlight his personal stake in the project.) b. Whether the planning permission now sought is identical to the one which expired or if it's scope has been enhanced or reduced in comparison.
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Post by ladywhitenap on Apr 27, 2019 11:45:35 GMT
Furthermore, the current planning application shows a response from the transportation department to the effect that there is a strip of land between the subject land of the application and the highway known as Little Lane. Could the Addendum from ablrate also include details of how the applicant proposes to own land to provide adequate vehicular access to the site to be acceptable to the transportation department. We don't want any repeat of the "ransom" strip of land situation that there is with a LY loan. LW
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