blender
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Post by blender on Nov 13, 2021 22:56:16 GMT
Should be 'Herd of elephants in the room'
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GreenZero
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The early bird may get the worm, but it's the second mouse who gets the cheese
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Post by GreenZero on Nov 19, 2021 17:09:49 GMT
With only the weekend to go, whilst this loan has passed its required minimum of £500k, it's only 61% filled.
Must be disappointing considering the standing of the company’s other loans with Abl.
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criston
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Post by criston on Nov 21, 2021 11:31:42 GMT
Rejigged for 24 months instead of previous incorrect 12 month period.
Delving into the figures, something is amiss.
Borrowing 90% of the LTGDV & paying interest on top, leaves little or no profit.
13825sqft luxury dwelling area will not cost £4.8m to build. That’s £3738 per sqm.
Should be £2500-£3000 per sqm. Say £2750 per sqm at the most x 1284sqm = £3.53m
Borrowing will therefore be £5.23m
Set up fees Say £5.23m x 5% = £260k
Interest £1.7m x 13% x 2years = £440k
Interest £3.53m x 10% x average 1 year = £350k
Monitoring Fees. £1.7m x 5% x 2 years = £170k
Monitoring Fees. £3.53m x 5% x average 1 year = £180k
Total fees & interest £1.4m
Total land/construction cost/interest/Fees £6.63m
GDV. Ablrate say £7.2m. Savills say £7.4m
Ablrate loan cut off point £5.93m less £1m= £4.93m
£4.93m/£7.4m= 66% LTGDV.
Unless borrower manages to use enhanced 1st Charge tranches to cover interest as well. £5.93m/£7.4m= 80% LTGDV
Overall with PeaOne £6.63m/£7.4m, 90% LTGDV, gives borrower 10% profit, of which PeaOne has a share.
So starts at 60% LTV First Charge & ends at 80% LTGDV Second Charge, assuming Ablrate loan of £1m
So starts at 40% LTV First Charge & ends at 76% LTGDV Second Charge assuming Ablrate loan of £0.7m
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GreenZero
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The early bird may get the worm, but it's the second mouse who gets the cheese
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Post by GreenZero on Nov 21, 2021 12:37:39 GMT
When I looked at it, I (probably wrongly) worked on the below very basic figures.
P* purchased the site in 9/21 for £1.7m (I can't see any mention that this purchase was subject to finance?). P* now want to borrow £1m leaving their remaining investment in the development at £700,000. The proposal doesn't say what P1 intend to use the £1m for (or at least I haven't read).
P*****n have agreed to lend up to £4.8m for the build which is estimated to take 14mths and then up to 9mths to sell the 14 apartments which will have a GDV of £7.2m.
The purchase (£1.7m) plus development and build of up to (£4.8m) totals £6.5m leaving only £700k - £1.4m to service their loans of up to £6.5m or £5.8m depending on if the £700,000 used in the initial purchase was/is subject of a loan.
As previous ventures have proven, their properties tend to sell quickly on phased completion, so it is possible if the development goes well they could be paying back large chunks off the loans in 14mths time. I think some of their previous developments have also benefited from property values going up due to the housing market situation.
Like you say, after the loans have been serviced, there may not be a lot left, however, I suspect some profit are likely contained within the high estimated build cost.
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criston
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Post by criston on Nov 21, 2021 12:44:32 GMT
Adding your observations into the mix should give a bigger picture.
Early sales will reduce the interest.
Higher values will reduce the LTGDV
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criston
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Post by criston on Nov 29, 2021 12:42:46 GMT
Closed off at £693.5k.
'So starts at 40% LTV First Charge & ends at 76% LTGDV Second Charge assuming Ablrate loan of £0.7m'
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