dave4
Member of DD Central
Cynical is a hobby not a lifestyle
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Post by dave4 on Oct 27, 2021 10:34:45 GMT
Borrower Sector: Property
Loan Amount: £380,000
Ablrate Lenders’ Amount: £320,000
Term: 12 months (9 months minimum term)
Rate: 11% - Interest Only.
Ect..
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p2pfan
Member of DD Central
Full-Time Investor
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Post by p2pfan on Oct 28, 2021 11:04:07 GMT
What's not to like about this loan?:
- LTV at way over 100% (!!)
- no approved planning permission
- borrower is a relatively new business with no proven track-record whatsoever
- previous loan from borrower on AblRate still not live after two months
- no debenture like the previous loan from this borrower had
- will be tenanted by social tenants
- property not exactly in one of the best areas in London, nowhere near any underground station etc.
- Etc. Etc.
On the plus side, the £60k first loss from P* gives some degree of comfort and this loan pays 11% versus 9% of the previous one from the borrower. Also, maybe I'm being foolish considering how the previously reliable Mr F* has been defaulting on all his loan interest payments on this platform for quite a while now, but P* have always paid on time on this platform thusfar and the association with one of their Directors is a plus.
I was doing my calculations this morning and have lost such enormous amounts of money in capital from my loans to borrowers in the property sector that they override the comparatively low interest earnings from those loans that haven't go awry. Therefore, as we know, these kind of high risk property loans need to be treated with caution.
Thoughts about this loan?
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criston
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Post by criston on Oct 28, 2021 11:29:20 GMT
What's not to like about this loan?: - LTV at way over 100% (!!) - no approved planning permission - borrower is a relatively new business with no proven track-record whatsoever - previous loan from borrower on AblRate still not live after two months - no debenture like the previous loan from this borrower had - will be tenanted by social tenants - property not exactly in one of the best areas in London, nowhere near any underground station etc. - Etc. Etc. On the plus side, the £60k first loss from P* gives some degree of comfort and this loan pays 11% versus 9% of the previous one from the borrower. Also, maybe I'm being foolish considering how the previously reliable Mr F* has been defaulting on all his loan interest payments on this platform for quite a while now, but P* have always paid on time on this platform thusfar and the association with one of their Directors is a plus. I was doing my calculations this morning and have lost such enormous amounts of money in capital from my loans to borrowers in the property sector that they override the comparatively low interest earnings from those loans that haven't go awry. Therefore, as we know, these kind of high risk property loans need to be treated with caution. Thoughts about this loan? Have not had time to study it yet, but when you say LTV way over 100%, how much of the 1st charge funds will initially be handed over.
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Post by overthehill on Oct 28, 2021 11:34:56 GMT
What's not to like about this loan?: - LTV at way over 100% (!!) - no approved planning permission - borrower is a relatively new business with no proven track-record whatsoever - previous loan from borrower on AblRate still not live after two months - no debenture like the previous loan from this borrower had - will be tenanted by social tenants - property not exactly in one of the best areas in London, nowhere near any underground station etc. - Etc. Etc. On the plus side, the £60k first loss from P* gives some degree of comfort and this loan pays 11% versus 9% of the previous one from the borrower. Also, maybe I'm being foolish considering how the previously reliable Mr F* has been defaulting on all his loan interest payments on this platform for quite a while now, but P* have always paid on time on this platform thusfar and the association with one of their Directors is a plus. I was doing my calculations this morning and have lost such enormous amounts of money in capital from my loans to borrowers in the property sector that they override the comparatively low interest earnings from those loans that haven't go awry. Therefore, as we know, these kind of high risk property loans need to be treated with caution. Thoughts about this loan? There are so many loans not paying interest or euphemistically stuck (there doesn't appear to be any loans in default) meaning none of that money can be recycled in new loans. So where is the new money coming from given the current state? As a new investor would you invest? I'm not seeing any progress so I'm not investing right now. Ablrate should be thankful they have a lot of glass half full investors.
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Post by Badly Drawn Stickman on Oct 28, 2021 11:38:10 GMT
I see the loan as a golden opportunity to not invest and send the message that talk the talk is not enough. Time to walk the walk.
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blender
Member of DD Central
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Post by blender on Oct 28, 2021 11:45:47 GMT
I see the loan as a golden opportunity to not invest and send the message that talk the talk is not enough. Time to walk the walk. That's a big step. Perhaps they might do it in stages: talk the walk, walk the talk, walk the walk?
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Post by Badly Drawn Stickman on Oct 28, 2021 11:53:51 GMT
I see the loan as a golden opportunity to not invest and send the message that talk the talk is not enough. Time to walk the walk. That's a big step. Perhaps they might do it in stages: talk the walk, walk the talk, walk the walk? I suspect an underwriter with a bus pass will give them time to decide what order suits them best.
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p2pfan
Member of DD Central
Full-Time Investor
Posts: 742
Likes: 835
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Post by p2pfan on Oct 28, 2021 12:33:37 GMT
What's not to like about this loan?: - LTV at way over 100% (!!) - no approved planning permission - borrower is a relatively new business with no proven track-record whatsoever - previous loan from borrower on AblRate still not live after two months - no debenture like the previous loan from this borrower had - will be tenanted by social tenants - property not exactly in one of the best areas in London, nowhere near any underground station etc. - Etc. Etc. On the plus side, the £60k first loss from P* gives some degree of comfort and this loan pays 11% versus 9% of the previous one from the borrower. Also, maybe I'm being foolish considering how the previously reliable Mr F* has been defaulting on all his loan interest payments on this platform for quite a while now, but P* have always paid on time on this platform thusfar and the association with one of their Directors is a plus. I was doing my calculations this morning and have lost such enormous amounts of money in capital from my loans to borrowers in the property sector that they override the comparatively low interest earnings from those loans that haven't go awry. Therefore, as we know, these kind of high risk property loans need to be treated with caution. Thoughts about this loan? Have not had time to study it yet, but when you say LTV way over 100%, how much of the 1st charge funds will initially be handed over. One major reason I am put off by Ablrate is they misleadingly spin GDV to be LTV with this and other loans. On the 'Details' page of this loan, it states: "Loan to value: 78%". It's not right. I've gone through the proposal and can't see any reference to the funds from either the first charge lender Q***** Finance or Ablrate being given to the borrower in tranches. Anybody else? I hope this loan does not fly and then finally Ablrate will realise they can't continue to treat lenders as abysmally as they keep doing (two free tips: getting payments from your borrowers is not "optional" and extending loans again and again and again is not something lenders take too kindly to).
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GreenZero
Member of DD Central
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 Oct 28, 2021 16:07:56 GMT
My thoughts on this loan....It's a none starter I'm afraid. I'm struggling to understand how ablrate is able to release 170 whilst 166 has not gone through due diligence and been approved. 166 was released on 01/09 (I'm not sure what date it closed) On 24/09 we were told there was a delay in completion due to "legals" taking longer than expected. On 08/10 we were then told a problem had been identifed due to "administrative errors" in the vendors paperwork. The latest update on 20/10 cited the legals were now moving more quickly and abl very much hoped to complete very soon. Yet to date it has still not completed?? Funny how on completion 165 was able to shoot straighy out of the door? A matter of days before the G issue arose. |
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criston
Member of DD Central
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Post by criston on Oct 28, 2021 16:48:52 GMT
Have not had time to study it yet, but when you say LTV way over 100%, how much of the 1st charge funds will initially be handed over. One major reason I am put off by Ablrate is they misleadingly spin GDV to be LTV with this and other loans. On the 'Details' page of this loan, it states: "Loan to value: 78%". It's not right. I've gone through the proposal and can't see any reference to the funds from either the first charge lender Q***** Finance or Ablrate being given to the borrower in tranches. Anybody else? I hope this loan does not fly and then finally Ablrate will realise they can't continue to treat lenders as abysmally as they keep doing (two free tips: getting payments from your borrowers is not "optional" and extending loans again and again and again is not something lenders take too kindly to). The only arbitrary mention of tranche is on 14 under 'How will I be Paid' 'The loan is structured as an interest only facility with a bullet repayment. This means that the Company is
obliged to make monthly payments of interest only and then repay the loan tranche balance at expiry of the
loan in 12 months time (assuming full term).'
I don't understand why they do not make it clearer though !
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macq
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Post by macq on Oct 28, 2021 16:56:00 GMT
That's a big step. Perhaps they might do it in stages: talk the walk, walk the talk, walk the walk? I suspect an underwriter with a bus pass will give them time to decide what order suits them best. Hopefully not the same one who is due to cover about £80,000 on the bond loan today or tomorrow
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Post by df on Oct 28, 2021 18:37:28 GMT
Have not had time to study it yet, but when you say LTV way over 100%, how much of the 1st charge funds will initially be handed over. One major reason I am put off by Ablrate is they misleadingly spin GDV to be LTV with this and other loans. On the 'Details' page of this loan, it states: "Loan to value: 78%". It's not right. I've gone through the proposal and can't see any reference to the funds from either the first charge lender Q***** Finance or Ablrate being given to the borrower in tranches. Anybody else? I hope this loan does not fly and then finally Ablrate will realise they can't continue to treat lenders as abysmally as they keep doing (two free tips: getting payments from your borrowers is not "optional" and extending loans again and again and again is not something lenders take too kindly to). Definitely not flying, rather crawling at £91,460 atm. There's still plenty of 171 available at 13%, so 170 has a very slim chance - I don't think ABL timed this well. Nothing will be flying until AFs start repaying.
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criston
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Post by criston on Oct 28, 2021 21:19:41 GMT
£60k of the £91k is the Peawon contribution.
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huxs
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Post by huxs on Oct 29, 2021 7:46:55 GMT
Am I reading the exist strategy right ? they have a guarantee of 1,600 month rent which is 19,200 par year which if my math is correct is less than 2% return on the 1,070,000 total loan amount are they going to find a lender willing to refinance at that rate ?
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criston
Member of DD Central
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Post by criston on Oct 31, 2021 13:23:16 GMT
Facts & Figures for my records (from an Ex building surveyor, estimator & buyer)
From the proposal. 'gross development value of £1,290,000 (based on a yield of 6.5% gross).'
Value based on HMO rental yield, as with 166.
Good deal for borrower, with 10 year rental agreement.
During conversion works, using LTGDV would be wildly overstated & inaccurate; more so if the borrower has problems with construction work or finances.
Rental agreement with Government/Housing Association does not kick in until conversion is complete & handed over.
Assuming the 1st charge holder provides an initial tranche to pay for the partial purchase of the property to be converted, over & above the Ablrate/PeeOne contribution; then at no point, until nearing completion will the LTV be less than 100%.
The GDV for a purchaser buying the property, (if defaulted by the current borrower), without a rental agreement could be as low as £720k. Half started property conversions have on average a 60% valuation of the finished GDV; this could be even worse at present due to escalating labour & material costs as well as shortages of labour & materials.
Only 11% interest.
No risk to borrower.
DYOR
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