ablender
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Post by ablender on Nov 16, 2015 13:22:09 GMT
I think that if the valuation and therefore the LTV is against the building, then there is no use of knowing "some figures on the known profitability of similar ventures". Or am I missing something?
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paulg
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Post by paulg on Nov 16, 2015 13:58:31 GMT
The valuation for "Development site with outline planning, Shropshire" is available now, and all the pipeline loans have "Stage" numbers.
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Post by Deleted on Nov 16, 2015 14:04:08 GMT
ShropshireJust had a quick look. I see the valuers reckon it will take £2.3m to upgrade the total site to be worth £4.5m, so any idea why they only want £700k?? Will they have to build, release land, build etc, all a bit odd to have that l piece of info. Thoughts anyone. Looks wet, but I bet the fish and chip shop will welcome the improvement in their view 
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sqh
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Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Nov 16, 2015 14:58:21 GMT
Shropshire
The valuer's back-of-a-fag-packet drawing shows a development of 16 houses (semi or link detached). With a GDV of £4.5M, that means £281k per property. Looking at rightmove modern 4 bed detached properties are being offered at about £245k. That's a big difference. It makes you wonder if GDV's factor in the current rate of price rises with the time to complete.
A very dangerous assumption from the lender prospective.
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registerme
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Post by registerme on Nov 16, 2015 15:54:11 GMT
Re Shropshire, section 15 Market Trends and General Comment. There's a sentence that reads "As such this may well be reinforced over the coming months by heightened political uncertainty ahead of the May 2015 general election". The date of inspection states the 16th October, but even assuming that this was just a copy paste from their current pro forma verbiage it's a little shabby.
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Post by martinox on Nov 16, 2015 16:29:32 GMT
I also see that Shropshire is described as long leasehold without any indication of the length or terms of the lease. As things stand I will be giving that one a miss.
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mikes1531
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Post by mikes1531 on Nov 16, 2015 16:32:31 GMT
ShropshireJust had a quick look. I see the valuers reckon it will take £2.3m to upgrade the total site to be worth £4.5m, so any idea why they only want £700k?? Will they have to build, release land, build etc, all a bit odd to have that l piece of info. Thoughts anyone. I would presume that the £700k loan is being used to fund the property purchase, and perhaps the interest rate they were offered was low-ish because of the 58% LTV and they'd rather have that than a larger loan with a higher interest rate. It's also possible that the agreed purchase price was less than £1.2M, and £700k was all they thought they could borrow. The valuer's back-of-a-fag-packet drawing shows a development of 16 houses (semi or link detached). With a GDV of £4.5M, that means £281k per property. Looking at rightmove modern 4 bed detached properties are being offered at about £245k. That's a big difference. It makes you wonder if GDV's factor in the current rate of price rises with the time to complete. A very dangerous assumption from the lender prospective. A £700k loan won't be nearly enough to fund the development works, so I presume a further development loan will be necessary. The lenders on that loan will be the ones who need to worry about the accuracy of the GDV. And if the developer needs to borrow only the £2.3M suggested by the valuer to complete the works, they still could realise a decent profit even if the £4.5M GDV turns out to be somewhat optimistic, so the lenders of the development loan shouldn't have an unreasonable LTV. Hopefully we'll get a bit more information when savingstream release the loan particulars.
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Balder
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Post by Balder on Nov 16, 2015 17:20:35 GMT
Re Shropshire, section 15 Market Trends and General Comment. There's a sentence that reads "As such this may well be reinforced over the coming months by heightened political uncertainty ahead of the May 2015 general election". The date of inspection states the 16th October, but even assuming that this was just a copy paste from their current pro forma verbiage it's a little shabby. This is worrying especially as this is the loan that SS previously posted the valuation and then removed it stating that they had instructed a new valuation. This looks as if a new valuation hasn't been conducted or if it has then "shabby" in general comment could also be "shabby" valuation. SS need to comment on this and get it corrected especially as the withdrawn valuation was instructed by an individual who didn't return very complimentary results on a Google name search.
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ablender
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Post by ablender on Nov 16, 2015 18:15:59 GMT
Re Shropshire, section 15 Market Trends and General Comment. There's a sentence that reads "As such this may well be reinforced over the coming months by heightened political uncertainty ahead of the May 2015 general election". The date of inspection states the 16th October, but even assuming that this was just a copy paste from their current pro forma verbiage it's a little shabby. This is worrying especially as this is the loan that SS previously posted the valuation and then removed it stating that they had instructed a new valuation. This looks as if a new valuation hasn't been conducted or if it has then "shabby" in general comment could also be "shabby" valuation. SS need to comment on this and get it corrected especially as the withdrawn valuation was instructed by an individual who didn't return very complimentary results on a Google name search. SS, will I be right to say that this document is word-for-word the other document that was taken down with the exception that the reference to the person that previously gave the instruction was changed for someone representing your company? Does this little change reflect any material change related to the people involved with this project? Or put in a different way, has the position of the person giving the original instruction changed with respect to this project?
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Post by savingstream on Nov 16, 2015 18:21:29 GMT
As is the case in short term lending, we have received a re-write of the valuation in our name which was completed last year.
This person who was mentioned in the previous iteration, was a broker involved in the deal before it came to us and has nothing to do with it anymore except as an introducing broker in the chain of brokers.
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ablender
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Post by ablender on Nov 16, 2015 18:36:10 GMT
thanks.
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Post by Deleted on Nov 16, 2015 19:16:06 GMT
"an introducing broker in the chain of brokers"
I think this statement needs a bit of mulling, but it doesn't sound very efficient.
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mikes1531
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Post by mikes1531 on Nov 17, 2015 1:53:08 GMT
"an introducing broker in the chain of brokers" I think this statement needs a bit of mulling, but it doesn't sound very efficient. And pity the poor borrowers if everyone in the chain is expecting a cut of the fees/interest.
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Post by Deleted on Nov 17, 2015 7:57:47 GMT
My mulling tells me that SS should advise on the number of brokers in every deal chain. More brokers the less I want to take the deal.
SS any views?
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paulgul
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Post by paulgul on Nov 17, 2015 8:43:52 GMT
Good to see "proper" stages in use, I see all the loans are stages 1 and 2 so a bit longer to wait I guess
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