Greenwood2
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Post by Greenwood2 on May 30, 2019 6:32:41 GMT
The other thing is the GDV figure is prone to change in slight changes in assumptions. For example a lot of these GDV were based on a cost of capital figure of 8%, but clearly the cost of capital was nearer 18-20%. No, that'd change the developer's profit figure - which is irrelevant to us as lenders, so long as the developer thinks it worthwhile. The GDV is the total sale price of all the units in the development. That's what the security is based on. X houses multiplied by £X sale value (estimated on Xsqft floor area at £X/psf). All relevant assumptions stated in there. How much they cost to build, and how much the money costs, is not the problem of the buyers of those X houses, and doesn't affect what they pay. But that's a bit chicken and eggs, the developer must have based his projected sale price of the properties on his costs in: finance, cost of the plot, costs of building the properties, etc and his required profit. If his costs go up (or have been underestimated) his profits go down, or he has to raise the projected property prices (with the risk they may not sell), in the extreme the whole project becomes unviable and collapses.
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rocky1
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Post by rocky1 on May 30, 2019 6:45:20 GMT
Is it possible that a lot of these developers already took their profit/large salary from tranche after tranche of loans that has seen next to nothing completed.so much money never went for what is was intended for on these loans.
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adrianc
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Post by adrianc on May 30, 2019 7:05:55 GMT
No, that'd change the developer's profit figure - which is irrelevant to us as lenders, so long as the developer thinks it worthwhile. The GDV is the total sale price of all the units in the development. That's what the security is based on. X houses multiplied by £X sale value (estimated on Xsqft floor area at £X/psf). All relevant assumptions stated in there. How much they cost to build, and how much the money costs, is not the problem of the buyers of those X houses, and doesn't affect what they pay. Residual value calcs are also used to value land. Ie Plug in say 20.% for developer profit to obtain land value. Yes - and the bit I quoted above gives the proportions used by Ly to calculate it for this project.
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zccax77
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Post by zccax77 on May 30, 2019 10:37:03 GMT
Is it possible that a lot of these developers already took their profit/large salary from tranche after tranche of loans that has seen next to nothing completed.so much money never went for what is was intended for on these loans. Look at dfl19 and ask yourself where 16m has gone . All I can see is a bunch of sheds. However I like the borrower and what he has done with dfl05, how could he have messed up dfl19 so bad.
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Post by GSV3MIaC on May 30, 2019 14:59:55 GMT
What he's done with DFL05 is fail to repay it when he should have. This borrower is not on my Xmas card list, although i agree 5 looks more like the artist's impression than 19 does.
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adrianc
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Post by adrianc on Jun 3, 2019 7:34:23 GMT
DFL019 updates show IMS visits in May/June/September/November 2017, March/June/August 2018 - look through those in order, and it certainly seems to predict this situation in plenty of time. The first mention of site delays is the November 2017 IMS report. Then the loss of general platform confidence meant that there simply wasn't the lender demand to fill later tranches, so the flow of money dried up - the first reports of that in updates are in April 2018.
There's also this, from the 1st Feb 2019 update...
So, if there is some kind of platform-level incompetence gone on, then it's happened either with the collusion of the IMS and other surveyors, or by blatantly and consistently misrepresenting their reports since late 2017. Or we're trying to retrospectively fit today's perceptions to the situation going back a year and a half... Occam's Razor applies, as ever.
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