Balder
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Post by Balder on Nov 17, 2015 9:26:23 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. Then the new valuation should have been re-written to reflect that. It states "The inspection was carried out in the morning of 16 October 2015", this is misleading and incorrect.
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sam i am
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Post by sam i am on Nov 17, 2015 9:31:15 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 I have just noticed that the pipeline stages seem to have changed. It's in the footnotes so maybe it has been a while and I didn't spot it. It probably changed when SS added the stages for the current loans. In the past, stages 1-4 represented the entire loan process from Lendy getting a sniff of the loan up to stage 4 being legals. I thought it was a bit odd that all these loans are being shown as stages 1 and 2 even though SS had informed us some time ago that some of them were in legals. Now I see that the pipeline is only for loans in legals and the numbers represent stages in the legal process. All loans are therefore at stage 4 under the old system, so maybe not quite as long to wait. In the latest general update SS indicated that we might see some action this week, so fingers crossed.
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Post by chielamangus on Nov 17, 2015 12:30:32 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? How is value derived? it is based on the expected profitability of the venture. More accurately, it is based on the next best land use because one only has to pay a little bit more than somebody else to acquire the land. Assuming a competitive market, the land (and any buildings) will be sold at a price which reflects what somebody thinks can make a profit for them. No profit, no point in buying. All LTVs are misleading if the V is a guess. In the three valuations I read I don't think there was any reference to sales of similar development land in the different areas - that is, what others have been willing to pay. Nor have we any idea what the developer could afford to pay based on his expected profitability. But what the heck! This P2P lark is only a bit of fun. There are always doomsayers like me trying to put the dampers on. I'm just a misery guts who never plays bingo, never bets on the geegees or doggies, and nowadays only drinks in moderation. Don't let me spoil the party.
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Liz
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Post by Liz on Nov 17, 2015 13:00:02 GMT
All of these development loans will need a lot of extra cash to complete the build, so I'm a bit confused to how they will complete the build and pay back the SS loans.
The lack of information in the particulars isn't helping, no financial data to how the money is to be used. Is all of the loan going on development or is a big chunk going on the purchase of the land?
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nsinvestor
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Post by nsinvestor on Nov 17, 2015 13:57:24 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  According to the SS loan docs, the initial loan is to enable the borrower to complete the planning process and demolition / site clearance. Once that has happened, further finance will be required to fund the development - Lendy may advance this.
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Post by savingstream on Nov 17, 2015 14:33:58 GMT
All of these development loans will need a lot of extra cash to complete the build, so I'm a bit confused to how they will complete the build and pay back the SS loans. The lack of information in the particulars isn't helping, no financial data to how the money is to be used. Is all of the loan going on development or is a big chunk going on the purchase of the land? These are bridging loans, development funds will be sourced from other lenders or we will make an offer to them in due course. The purpose of the loans is always within the particulars and is very self explanatory.
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Liz
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Post by Liz on Nov 17, 2015 14:48:18 GMT
Thanks for responding Saving Stream. Maybe it's me being over cautious, but I get slightly worried that should a borrower be unable to obtain development finance, then there could be a problem.
There is a good chance of development finance in all of these loans, but nothing is guaranteed with high risk bridging loans. Expect some losses and diversify is all I can do.
What are other members' views?
Edit: After reading again, I do like sound of the Swansea care home, so will at least prefund that one, hopefully its not massively oversubscribed.
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Post by Deleted on Nov 17, 2015 15:10:35 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 According to the SS loan docs, the initial loan is to enable the borrower to complete the planning process and demolition / site clearance. Once that has happened, further finance will be required to fund the development - Lendy may advance this. Thanks that makes a lot of sense and finally helps me make my mind up. I guess for those who still want to invest the questions ought to be 1) When they put a £4.5m valuation on the site is that for cleared with planning or when built up? 2) If position is so important in property why is this site so highly valued given that it is next to the muddy Hull river and a bunch of shops of dubious value. Still, I'm out.
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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 17, 2015 15:16:49 GMT
Thanks for responding Saving Stream. Maybe it's me being over cautious, but I get slightly worried that should a borrower be unable to obtain development finance, then there could be a problem. There is a good chance of development finance in all of these loans, but nothing is guaranteed with high risk bridging loans. Expect some losses and diversify is all I can do. What are other members' views? Edit: After reading again, I do like sound of the Swansea care home, so will at least prefund that one, hopefully its not massively oversubscribed. I think the Shropshire valuation has overestimated the GDV of the land, as I explained yesterday on this thread. My concern about the South Wales care homes is that European regulations are stipulating larger room sizes for dementia care but developers want to get more rooms packed into existing care home projects.
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grahamg
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Post by grahamg on Nov 17, 2015 15:19:41 GMT
So what do we have ?
More student accommodation on a site where the PP expires in december
A nursing home on a site thats too small and infested with japanese knotweed
Another nursing home on an old mining site where the valuer doubts the viability of the location
A scruffy site with only outline PP where the valuer says it will be worth 200K less in 3 months , so should have 70% LTV not 58%
Just not impressed with any of it as an investment.
Edit.. and as nursing home sector is in decline what's the chance of selling one where the borrower has gone M's up, other than at the value of the site.
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huxs
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Post by huxs on Nov 17, 2015 16:02:56 GMT
Its looking like these seems to be the types of investment that you get for a 12% returns, my guess as more and more P2P platforms fight it out for loans and new challenger banks enter these markets the quality of loans that SS can get to pay the 18+% to keep the 12% return for investors will get riskier.
Less risky bridging loans are available but paying less. For example eMoneyunion's current loan for 9% which in my uneducated view seems a lot safer and then you have the steady stream of Property loans on FC but these pay even less post fees.
Just to clarify, saying all that I will be investing in these SS loans as I am comfortable with my wide diversification and keen to mix both lower and higher risk loans at this point.
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sam i am
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Post by sam i am on Nov 17, 2015 16:03:48 GMT
If I had a pound for every SS bridging loan that had some kind of issue with the security, I'd probably have £64 by now. If the security was watertight, the borrower would go to their local bank and raise the funds at half the interest rate.
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mikes1531
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Post by mikes1531 on Nov 17, 2015 16:14:24 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 I have just noticed that the pipeline stages seem to have changed. It's in the footnotes so maybe it has been a while and I didn't spot it. It probably changed when SS added the stages for the current loans. In the past, stages 1-4 represented the entire loan process from Lendy getting a sniff of the loan up to stage 4 being legals. I thought it was a bit odd that all these loans are being shown as stages 1 and 2 even though SS had informed us some time ago that some of them were in legals. Now I see that the pipeline is only for loans in legals and the numbers represent stages in the legal process. All loans are therefore at stage 4 under the old system, so maybe not quite as long to wait. In the latest general update SS indicated that we might see some action this week, so fingers crossed. I'm a bit confused by the new stages. Stage 4 is "Funds sent to solicitor". Doesn't the loan have to exit the pipeline and be made live before that can happen? Or are savingstream still using their own money to fund loans and then paying themselves back when their investors put their money up? Is that still possible under the new Ts&Cs now that investors are supposed to be lending directly to the borrowers, with SS merely acting as agent/broker/facilitator?
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ablender
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Post by ablender on Nov 17, 2015 16:35:38 GMT
If I had a pound for every SS bridging loan that had some kind of issue with the security, I'd probably have £64 by now. If the security was watertight, the borrower would go to their local bank and raise the funds at half the interest rate. Really. I read some where else that bridging loans are much dearer elsewhere.
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ablender
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Post by ablender on Nov 17, 2015 16:37:09 GMT
I have just noticed that the pipeline stages seem to have changed. It's in the footnotes so maybe it has been a while and I didn't spot it. It probably changed when SS added the stages for the current loans. In the past, stages 1-4 represented the entire loan process from Lendy getting a sniff of the loan up to stage 4 being legals. I thought it was a bit odd that all these loans are being shown as stages 1 and 2 even though SS had informed us some time ago that some of them were in legals. Now I see that the pipeline is only for loans in legals and the numbers represent stages in the legal process. All loans are therefore at stage 4 under the old system, so maybe not quite as long to wait. In the latest general update SS indicated that we might see some action this week, so fingers crossed. I'm a bit confused by the new stages. Stage 4 is "Funds sent to solicitor". Doesn't the loan have to exit the pipeline and be made live before that can happen? Or are savingstream still using their own money to fund loans and then paying themselves back when their investors put their money up? Is that still possible under the new Ts&Cs now that investors are supposed to be lending directly to the borrowers, with SS merely acting as agent/broker/facilitator? What about if SS is another lender?
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