huxs
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Post by huxs on Nov 13, 2019 12:19:06 GMT
So 3.31m 1st charge loan ahead of this 850K 2nd charge loan on development land worth what? Why do they need this 850K already when no development has taken place ? Surely they have some of the 3.31m left to start the build?
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criston
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Post by criston on Nov 13, 2019 12:35:36 GMT
On 133 had to drag out the info from Ablrate & eventually told nothing of the First Charge had been drawn down.
Nice to see some LTV GDV % as against what we saw on 131.
Have not read it all yet.
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macq
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Post by macq on Nov 13, 2019 12:56:25 GMT
Probably me rather then the offering - but i can't get past the phrase in security details where it says in point 1. the security suite is shared with future and current loans to P* *********** Ltd (but appreciate there is more in point 2) so not for me
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p2pfan
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Post by p2pfan on Nov 13, 2019 13:03:48 GMT
As others have said, this is a high risk investment (usually outside of my comfort zone), but the high 13% return reflects that.
It's very difficult to determine how realisable the securities will be in actuality in the case of a default. These things often look solid on paper, but calling upon complicated securities on development projects below the first charge in the real world is an entirely different matter.
Nearly a third of the properties (5) are for "affordable housing" but some good news on that front, which should provide lenders with a little bit of peace of mind:
"The Developer has agreed Heads of Terms with
Sage Homes to pre-sell the 5 affordable housing
units on a “golden brick” basis for a purchase price
if £687k. This adds an extra layer of protection to
the realisation of the overall development."
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criston
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Post by criston on Nov 13, 2019 13:26:01 GMT
So 3.31m 1st charge loan ahead of this 850K 2nd charge loan on development land worth what? Why do they need this 850K already when no development has taken place ? Surely they have some of the 3.31m left to start the build? Page 10 shows how the first charge drawdown is dealt with. 'The full funds from the bank will not be drawndown on day 1 but will be provided in a series of agreed staged payments over the course of the project.'
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macq
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Post by macq on Nov 13, 2019 13:32:42 GMT
As others have said, this is a high risk investment (usually outside of my comfort zone), but the high 13% return reflects that. It's very difficult to determine how realisable the securities will be in actuality in the case of a default. These things often look solid on paper, but calling upon complicated securities on development projects below the first charge in the real world is an entirely different matter. Nearly a third of the properties (5) are for "affordable housing" but some good news on that front, which should provide lenders with a little bit of peace of mind: "The Developer has agreed Heads of Terms with Sage Homes to pre-sell the 5 affordable housing units on a “golden brick” basis for a purchase price if £687k. This adds an extra layer of protection to the realisation of the overall development." An online search does say that for the social housing buyer using the Golden brick method that One risk (others mentioned) is insolvency of the developer etc so not sure its completely "an extra layer of protection to the realisation.........." per se
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criston
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Post by criston on Nov 13, 2019 13:46:37 GMT
Hate having to try & interpret information. Why can't it be more straightforward.
GDV £5.3m
Land cost £1.1m
Construction cost £2.5m.
Total loans £4.15m. Presume the extra £650k covers some of the interest as well.
First charge loan eventually £3.3m. First draw down will be £110k (10% of land cost or valuation)
2nd charge loan £850k of which Ablrate initially £765k. Assume 100% drawdown.
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huxs
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Post by huxs on Nov 13, 2019 14:57:57 GMT
Hate having to try & interpret information. Why can't it be more straightforward. GDV £5.3m Land cost £1.1m Construction cost £2.5m. Total loans £4.15m. Presume the extra £650k covers some of the interest as well. First charge loan eventually £3.3m. First draw down will be £110k (10% of land cost or valuation) 2nd charge loan £850k of which Ablrate initially £765k. Assume 100% drawdown. So initial LTV is somewhere in the region of 960k of 1.1m 87% or 79.5% if you take off the first 85K high but seen worse for development projects
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Post by Badly Drawn Stickman on Nov 13, 2019 21:21:51 GMT
The problem I have is that apart from a different end date and build location, to all effective purposes I would really just be increasing my holding to one borrower/asset,
Add that 133 has never traded above par and along with this one is even less likely to do so combined, and I just can't find a reason to invest unless I want a bigger holding.
I consider my holding big enough (and could arguably increase it at below par if I wanted to) so just have no good reason to invest.
Probably the big problem going forward with this model, especially if monthly additions is to be the standard.
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macq
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Post by macq on Nov 13, 2019 22:05:11 GMT
in someways it feels like a portfolio loan in all but name
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macq
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Post by macq on Dec 5, 2019 17:17:29 GMT
so 1000135 is cancelled for not filling quick enough to be replaced by 136 another property loan to the same people? (but smaller size may help)
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johnfleet
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Post by johnfleet on Dec 5, 2019 17:41:21 GMT
so with instant returns to be paid, a very good short-term investment!
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des
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Post by des on Dec 5, 2019 19:51:29 GMT
Has there been an email sent about this?
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criston
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Post by criston on Dec 5, 2019 19:56:51 GMT
Has there been an email sent about this? There has; and another earlier about APPROPRIATENESS TEST.
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des
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Post by des on Dec 5, 2019 20:06:33 GMT
Has there been an email sent about this? There has; and another earlier about APPROPRIATENESS TEST. Thanks, got the APP TEST one, just not the one about 135/6 I'll have to contact abl directly as there are too many emails not being delivered on my Normal, ISA and my Wifes Normal & ISA accounts.
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