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Post by savingstream on Nov 17, 2015 17:01:31 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. grahamg you are being disingenuous here with all of your remarks. Which student site are you referring to? The nursing home at Cadoxton has an issue with the communal areas not being the correct size so they are moving staffing areas around to accomodate the rules. In hand and sorted. There is a small amount of Japanese Knotweed on the site; it is not 'infested', just a small corner of the plot and has already been dealt with. The valuer did not say he ' doubts the validity of the location' in fact the valuer says ' in our opinion the demographics are excellent for a carehome in this locality'. " scruffy site" - its a pre-development site and they are knocking the buildings down... " £200k less in 3 months" - this is incorrect. We have made the loan based on the 180 day sale value of £1.2m. If we had made it on the 90 day sale value, it would be valued at £1m. Given that we are probably going to lend him the funds to build it out, we are looking at the longer term view. The nursing home sector is in anything but decline; the demographics of the UK alone dispute that statement.
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jimbob
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Post by jimbob on Nov 17, 2015 17:16:43 GMT
The Swansea care home looks the pick of the bunch to me.
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registerme
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Post by registerme on Nov 17, 2015 17:22:18 GMT
One concern I have about nursing homes, regardless of the demographics (a comment I agree with), is the combination of the introduction of the living wage next year with continued downward pressure on fees paid by local authorities for care / carers. I'm not sure how viable the businesses will be in the long term (much like primary schools and other businesses / industries that rely on low paid staff and can't command any kind of price premium).
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jimbob
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Post by jimbob on Nov 17, 2015 17:26:28 GMT
One concern I have about nursing homes, regardless of the demographics (a comment I agree with), is the combination of the introduction of the living wage next year with continued downward pressure on fees paid by local authorities for care / carers. I'm not sure how viable the businesses will be in the long term (much like primary schools and other businesses / industries that rely on low paid staff and can't command any kind of price premium). Fees will go up; and the equity in the patient's houses will pay for it.
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sam i am
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Post by sam i am on Nov 17, 2015 17:43:32 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. Bridging loans have a very broad spectrum of interest rates applying to them depending on the specific circumstances. Loans with the kind of security we see on SS may be more expensive elsewhere but loans with the very best security are likely to be cheaper (and not the part of the market in which SS operates).
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ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Nov 17, 2015 17:52:10 GMT
One concern I have about nursing homes, regardless of the demographics (a comment I agree with), is the combination of the introduction of the living wage next year with continued downward pressure on fees paid by local authorities for care / carers. I'm not sure how viable the businesses will be in the long term (much like primary schools and other businesses / industries that rely on low paid staff and can't command any kind of price premium). Fees will go up; and the equity in the patient's houses will pay for it. Indeed, I can't see how the businesses could be anything but viable in general. With the baby-boom generation now starting to approach the sort of age where many of them might start to need some sort of care in a few years' time, then either care will be given and paid for one way or another, or we'll be living in some sort of nightmare where nobody is cared for - we are arguably there already for the unfortunately less well-off people, but the BBs are said to be, on average, comfortable enough to be able to pay, and one way or another, I imagine they will. Edit: having just read OG's post below, it would appear to boil down to whether it's a state-funded or private venture as to how well it will do. A minefield I've not had the misfortune to have to navigate personally as yet, thankfully. Edit 2: Oh, OG's post has gone. Now where did I put it?..................
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Post by ladywhitenap on Nov 17, 2015 18:06:39 GMT
I am one of said baby boomers and already providing a degree of care for my spouse. The very reason I dabble here is that most of our savings is in secure but poor interest yielding safety for that rainy day with a small percentage invested here to provide some degree of growth (and mental stimulus!). We believe that the % we risk in in P2P, we can afford to lose if all goes wrong. I have no idea what care will cost us when I come need it and can no longer provide it to my other half.
LW
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ilmoro
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Post by ilmoro on Nov 17, 2015 19:02:21 GMT
So what do we have ? More student accommodation on a site where the PP expires in december If youre refering to the loan up north work started clearing the site in April so I would expect they have already started work that would satisfy the planning permission. Slightly more than student digs, hotels, retail & residential. Its in the local paper if you google - no link as identifies borower.
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ablender
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Post by ablender on Nov 17, 2015 19:23:08 GMT
So what do we have ? More student accommodation on a site where the PP expires in december If youre refering to the loan up north work started clearing the site in April so I would expect they have already started work that would satisfy the planning permission. Slightly more than student digs, hotels, retail & residential. Its in the local paper if you google - no link as identifies borower. I would like to ask the moderators - if the borrowers are already published and in the public eye, what is the problem with having a link in this forum?
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Post by chielamangus on Nov 17, 2015 20:36:41 GMT
Fees will go up; and the equity in the patient's houses will pay for it. Indeed, I can't see how the businesses could be anything but viable in general. With the baby-boom generation now starting to approach the sort of age where many of them might start to need some sort of care in a few years' time, then either care will be given and paid for one way or another, or we'll be living in some sort of nightmare where nobody is cared for. You both make huge assumptions which are probably wrong. The equity in many houses is run down because people sell all or a part for supplementary income. Or they downsize and give money to their kids to buy houses. And being older than the "baby-boom" generation (I assume you mean the post WW2 boom up to about 1950) I can assure you that neither I nor my wife will ever go into the hell that is a care home. We'd rather top ourselves. Our children might even look after us if we are dementia-free. So don't make the mistake of thinking there is an evergrowing demand for these homes. Think about it, and think of what you can do for your elderly parents!
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Post by chielamangus on Nov 17, 2015 20:57:00 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. You at SS might think everything is self explanatory but I think you need to change your ideas. Investors are no longer lending to Lendy who hold a broad portfolio of loans but to the individual developer. This is the guy that has to pay the interest and repay the principal. So we need a LOT more information on the developer's plans, cash flow projections, and what EXACTLY he is going to do with the money. The "reports" provided at the moment are a joke. Take the Shropshire loan - I have looked in vain for the area of the land to be developed, the number of houses to be erected, the value of comparable development land in South Shropshire (yes, there is plenty), how the interest is to be paid in the absence of any revenue earning activities, etc. Or is everything to be funded out of the future planned loan after this one? Sounds suspect. Based on the information provided by your valuers, most of it culled from the local guide book, I have no faith at all in their valuation. Well might they hedge their bets with reference to a 15 per cent variation in value, and point out that some academics think the variation much greater. MUCH greater. So valuations need to be justified, and full development plans with financials provided. But I suspect these have never existed. Has so much investment ever been requested on the basis of so little information? Apart from the South Sea Bubble, of course.
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ilmoro
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Post by ilmoro on Nov 17, 2015 21:16:19 GMT
how the interest is to be paid in the absence of any revenue earning activities, etc. Included in the loan amount advanced for the initial term
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mikes1531
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Post by mikes1531 on Nov 17, 2015 22:20:44 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. : IMHO the loan purpose stated in the care home loan particulars is not "self explanatory" -- in fact, I would suggest that it contradicts what you've said above. The Cadoxton particulars state the borrower "has an agreement with a national operator to take on the carehome on a 25 year lease which will allow a bank to refinance our loan when the building is complete" -- and the Bryn particulars say the same thing in slightly different words. Since the development work requires about £3M at Cadoxton (and probably a similar amount at Bryn), then unless the borrower is going to provide all those funds themselves -- which you've suggested above that they aren't -- the exit from these loans won't be "Refinance with commercial mortgage" as stated in the particulars at all. Is the exit strategy not really something like "refinance with development loan -- from SS or similar provider -- once final planning permission is obtained"? The exit strategies stated in the current particulars would appear to be more appropriate for the future development loan particulars. Or am I misunderstanding something? This raises a further question... What would happen if the planning requests for larger (increased numbers of beds) developments are refused? Is the developer prepared to proceed anyway in that case? If not, then ISTM that these projects are not viable without the additional beds. And if that's the case, then the chances of finding an alternative developer willing to buy the property for anything near the stated valuation could be slim indeed. In short, are the prospects of a successful outcome for these loans highly dependent on the success of the borrowers current planning applications? Please comment.
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ramblin rose
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Post by ramblin rose on Nov 17, 2015 22:45:40 GMT
Indeed, I can't see how the businesses could be anything but viable in general. With the baby-boom generation now starting to approach the sort of age where many of them might start to need some sort of care in a few years' time, then either care will be given and paid for one way or another, or we'll be living in some sort of nightmare where nobody is cared for. You both make huge assumptions which are probably wrong. The equity in many houses is run down because people sell all or a part for supplementary income. Or they downsize and give money to their kids to buy houses. And being older than the "baby-boom" generation (I assume you mean the post WW2 boom up to about 1950) I can assure you that neither I nor my wife will ever go into the hell that is a care home. We'd rather top ourselves. Our children might even look after us if we are dementia-free. So don't make the mistake of thinking there is an evergrowing demand for these homes. Think about it, and think of what you can do for your elderly parents! Of course not everybody will need them, just as they don't now, but if 'x' people need them now, then with a bigger number of people in the appropriate age group going forwards, then it seems clear that 'more than x' will need them in future years, and it's really just that mathematical point I was making. It is not the case that most people's kids will be in a position to provide 24 hour care. I do think about it a lot already it as it happens, and I have spent a great deal of time recently caring for an elderly parent. When she gets to the point of needing 24 hour care for more than a month or two at a time (as I provide now), it will be because of regular falling and inability to get up rather than not being able to eat and drink or have any other quality of life, which will be the case for many I am sure. At that point, probably not too far away, then I would equally not like to think it was time for her to 'top herself', but neither would I be able to spend 24 hours a day with her either, nor even parts of all of 365 days a year. There are equally a great many people with no children to do any looking after whatsoever, so you are very lucky and privileged if you have children who both could and would be willing to do that for you. The vision of life where all those without children able to do full time caring are to 'top themselves' isn't a particularly lovely one. I would counter your "Don't make the mistake of.............." with one of my own: Don't make the mistake of thinking that it is fair to expect your children to give up all their ability to earn a living and have any life other than providing you with 24 hour care just because you think having someone else care for you is unacceptable. I know a number of elderly people living fulfilling lives in care homes - they get out and about quite often but are safe all the time, and their children can devote quality time to be with them regularly, take them out shopping, for lunch, to the cinema etc. Think about it, and think of what is reasonable to expect of your children - it's not just dementia that means full time care is required.
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webwiz
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Post by webwiz on Nov 17, 2015 22:52:38 GMT
The valuation of the Shropshire land does throw up some queries. No development plans are given but nonetheless the valuer has put a value of £4.5m on the completed development. Has he had a sight of the proposals? If so may we see them? If he has not I am at a loss to understand how he can value them. To obtain £4.5m would require as an example 18 houses at £250,000. It is hard to see how this many could be fitted into the site. If house prices are higher than this can we see comparables? Is £500,000 per house achievable with a total of 9 houses?
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