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Post by Deleted on May 13, 2015 16:00:38 GMT
Thanks Grandad, I always worry about the LTV on these things, the £1k is probably new retail price so with a 70% mark up the real cost is more like £600 or a true LTV of summit like 85%, still 6 months on £25 at 12% must be worth ooooh £1.50.  |
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ilmoro
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Post by ilmoro on May 13, 2015 16:27:35 GMT
Nice one, Grandad. Managed to get a bit of this one after yesterdays frustration of watching it trickle out while waiting for FS to add funds for 2 hours! Still havent got into the habit of keeping £25 available & that EEs idea of 3G mobile internet doesnt include the mobile bit  |
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mikes1531
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Post by mikes1531 on May 13, 2015 16:40:51 GMT
I always worry about the LTV on these things, the £1k is probably new retail price so with a 70% mark up the real cost is more like £600 or a true LTV of summit like 85%... have said the valuation is supposed to be roughly what a dealer would offer for the item if the borrower defaulted and it was necessary to sell the security. If the wholesale cost of today's bracelet actually was £600, there would be no way, short of getting rather lucky, for FS lenders to have a good result from a default because of the costs involved -- auction house, storage, FS fees, etc., etc. Even with a conservative valuation as is supposed to be the case, another couple of months likely will have passed by the time an item gets to auction, so a LTV below 80% -- and possibly below 70% -- is needed to have some confidence that things will work out well for FS lenders. With FS's recent default experiences, I would hope they'll be using very conservative valuations from here forward.
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Post by fundingsecure on May 15, 2015 8:25:37 GMT
New loan at 11 am this morning (Friday 15th May) Secured against Rolex Watch £3,400 13% pa LTV 68.0% £25 bid restriction for first 24 hours as this is a renewal More detailsFundingSecure |
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Post by fundingsecure on May 15, 2015 8:28:04 GMT
New loan at 12 noon today (Friday 15th May) Secured against Six Persian Silk carpets £45,000 13% pa LTV 45.0% £500 bid restriction for first 24 hours as this is a renewal More detailsFundingSecure |
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SteveT
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Post by SteveT on May 15, 2015 13:15:34 GMT
Large new property loan just gone live. £490k (70% LTV) at 13%. Bonus rates for very large investments. No restrictions.
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Post by fundingsecure on May 15, 2015 13:27:41 GMT
New loan just posted Secured against Somerset Property £490,000 13% pa +1% Bonus for bids of £10,000 or more (Totalling 14% pa) +2.5% Bonus for bids of £25,000 or more (Totalling 15.5% pa) LTV 70.0% No bid restriction More detailsFundingSecure |
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mikes1531
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Post by mikes1531 on May 15, 2015 14:19:20 GMT
New loan just posted Secured against Somerset Property £490,000 Reading the valuation report, I don't see an awful lot of scope for developer gain. Buying the land for £0.7M and paying £1.0M to build a property with a market value of £2.0M doesn't leave a lot of room to cover the interest on bridging/development finance from now until the finished house is sold and the cost of selling. But I'm no expert at all. Perhaps this is the sort or margin a developer expects.
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Post by shadoh on May 15, 2015 14:28:16 GMT
i would have thought 20% profit is acceptable.
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mikes1531
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Post by mikes1531 on May 15, 2015 14:43:41 GMT
i would have thought 20% profit is acceptable. Yes, but I don't see how that would be possible once the financing and selling costs are included. I would have thought that borrowing £1.7M at bridging/development loan rates would cost a minimum of £0.2M in interest alone, if the project needs a year from land purchase to house sale completion.
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Post by shadoh on May 15, 2015 14:56:28 GMT
but it's only a 6 month loan
I've invested
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Post by mrclondon on May 15, 2015 15:08:22 GMT
The valuation report states that demand from developers will be limited. Plots / developments like this will in general only appeal to self-build owner-occupiers ... i.e. someone who falls in love with the location, and has the appetite and finance to take on the build themselves.
So if this loan defaults it could take an awful long time to sell the land at fair price. Which no doubt explains the 13% yield comapred to the 12% norm on FS property deals, as a small recognition of the extra risk here. At 70% LTV, I'm not convinced though.
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sqh
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Post by sqh on May 15, 2015 15:09:10 GMT
i would have thought 20% profit is acceptable. Yes, but I don't see how that would be possible once the financing and selling costs are included. I would have thought that borrowing £1.7M at bridging/development loan rates would cost a minimum of £0.2M in interest alone, if the project needs a year from land purchase to house sale completion. It's a 3.5 acre plot. I think the developer may keep some land for further development.
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mikes1531
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Post by mikes1531 on May 15, 2015 19:17:44 GMT
Yes, but I don't see how that would be possible once the financing and selling costs are included. I would have thought that borrowing £1.7M at bridging/development loan rates would cost a minimum of £0.2M in interest alone, if the project needs a year from land purchase to house sale completion. Might the £490k be the only loan, with the rest being developer equity? (" First and only charge") I expect so. But does the borrower have £1M sitting around that they can use to fund the construction? I'd have thought they'd want to obtain a development loan, but they could be hard pressed to do that on the basis of the valuation report. An alternative would be to sell the property to a developer, but that could be difficult according to the VR. I've dipped a small toe in, but I really don't expect the loan to be repaid in six months. How long does it take to build a £1M house? Is it even completely designed yet?
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bugs4me
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Post by bugs4me on May 15, 2015 19:35:00 GMT
Might the £490k be the only loan, with the rest being developer equity? (" First and only charge") I expect so. But does the borrower have £1M sitting around that they can use to fund the construction? I'd have thought they'd want to obtain a development loan, but they could be hard pressed to do that on the basis of the valuation report. An alternative would be to sell the property to a developer, but that could be difficult according to the VR. I've dipped a small toe in, but I really don't expect the loan to be repaid in six months. How long does it take to build a £1M house? Is it even completely designed yet? I also doubt an exit repayment in 6 months and will need to reconsider if or when they require a rollover. But if the worst came to the worst I'm confident that the property could be disposed of comfortably to repay the lenders in full with interest.
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