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Post by MoneyThing on Mar 9, 2015 13:31:31 GMT
Afternoon,
I have been approached by a potential borrower with regards to a 6 month loan facility of £350,000 against a parcel of land in central Brighton valued at £700,000. I just wanted to get a feel from potential investors whether this could be of interest and would appreciate your feedback as to whether to place it on the platform?
Outline:
The land is owned by a property developer who has been granted planning to erect an NHS Doctor's Surgery, with an application to amend the scheme to incorporate 24 Student Accommodation Units above the surgery currently in appeal.
The overall project has a build cost of £2.276m.
The developer is looking for a short term bridging facility of £350,000 against a land value (without planning) of £700,000 for up to 6 months. They have already secured a development facility by another firm after the 6 month period which would cover the overall project and also pay back this bridging facility.
Kind regards,
Ed
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coop
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Post by coop on Mar 9, 2015 13:49:11 GMT
I shant be investing; it's a non-starter for me but that's a personal thing and nothing to do with LTV/security etc.
Best of luck with the loan (I can't say the same for the developer and his PP though!)
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bugs4me
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Post by bugs4me on Mar 9, 2015 13:54:44 GMT
Afternoon, I have been approached by a potential borrower with regards to a 6 month loan facility of £350,000 against a parcel of land in central Brighton valued at £700,000. I just wanted to get a feel from potential investors whether this could be of interest and would appreciate your feedback as to whether to place it on the platform? Outline:The land is owned by a property developer who has been granted planning to erect an NHS Doctor's Surgery, with an application to amend the scheme to incorporate 24 Student Accommodation Units above the surgery currently in appeal. The overall project has a build cost of £2.276m. The developer is looking for a short term bridging facility of £350,000 against a land value (without planning) of £700,000 for up to 6 months. They have already secured a development facility by another firm after the 6 month period which would cover the overall project and also pay back this bridging facility. Kind regards, Ed It would be of interest to me provided there was an independent (suitably redacted) valuation. Also, are you confident that 6 months would be a suitable term. On other platforms, 6 months seems to often be highly optimistic and the term should be for a minimum of 9 months.
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jonno
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Post by jonno on Mar 9, 2015 13:56:52 GMT
Afternoon Ed.
I'd be interested pending some further details e.g. exactly what is the bridging loan to be used for; what assumptions have been included in the land valuation;how concrete (sorry!) is the development offer? Whether it may be a little ambitious re the size of the loan at this stage of development only you can gauge and how reliant you are on us lenders to fully finance the loan.
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coop
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Post by coop on Mar 9, 2015 14:20:40 GMT
Mod: Link Removed
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jonno
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Post by jonno on Mar 9, 2015 14:31:49 GMT
Sorry coop didn't mean to interrupt your din-dins. Perhaps I should have used the word " materially" rather than "fully"
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Post by davee39 on Mar 9, 2015 15:04:33 GMT
I am looking at a property developer who has a 'promise' of cash in 6 months going to a new platform, with limited property expertise and asking about a loan. I am already skeptical about property lending but would imagine that some detailed understanding of the process is required to ensure the legals are in place and an appropriate alternative exit is available. On other platforms there are investors who pore over these prospects with a microscope and there are also those who go for anything offering 12%. Based on your brief comment the exit sounds a bit too much like 'a mate has promised me some cash'.
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ramblin rose
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Post by ramblin rose on Mar 9, 2015 15:06:21 GMT
Afternoon, I have been approached by a potential borrower with regards to a 6 month loan facility of £350,000 against a parcel of land in central Brighton valued at £700,000. I just wanted to get a feel from potential investors whether this could be of interest and would appreciate your feedback as to whether to place it on the platform? Outline:The land is owned by a property developer who has been granted planning to erect an NHS Doctor's Surgery, with an application to amend the scheme to incorporate 24 Student Accommodation Units above the surgery currently in appeal. The overall project has a build cost of £2.276m. The developer is looking for a short term bridging facility of £350,000 against a land value (without planning) of £700,000 for up to 6 months. They have already secured a development facility by another firm after the 6 month period which would cover the overall project and also pay back this bridging facility. Kind regards, Ed It would be of interest to me provided there was an independent (suitably redacted) valuation. Also, are you confident that 6 months would be a suitable term. On other platforms, 6 months seems to often be highly optimistic and the term should be for a minimum of 9 months. Even 9 months could be optimistic from experience gained with bridging loans via other platforms. Even the very highly experienced property bridging lenders on these platforms struggle to get these loans concluded. The borrowers go very quiet and become very hard to pin down whilst they find follow-up long-term finance either harder to come by than they first envisaged or longer to get the legalities tied up if they already have offers in writing. Only with very water-tight legal documentation is it possible to take over the charges on the properties, which almost always needs to be done via the employment of 3rd parties for various, and always-complicated legal reasons. I would say, be very, very certain of what you are doing, and that you have your lenders interests always legally protected from counter-claims in the event of attempting to sell the land in the case of default, because it could ruin a good reputation very quickly if it went badly wrong. Edit: I'm already avoiding the FS property offerings until such time as I have evidence of how they handle the almost inevitable defaults that will arise after the initial 6 month periods are up. I would be doing likewise here. It's a whole different ball-game to gold trinkets from a partner who will buy back the defaults.
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jonno
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Post by jonno on Mar 9, 2015 15:12:47 GMT
I am looking at a property developer who has a 'promise' of cash in 6 months going to a new platform, with limited property expertise and asking about a loan. I am already skeptical about property lending but would imagine that some detailed understanding of the process is required to ensure the legals are in place and an appropriate alternative exit is available. On other platforms there are investors who pore over these prospects with a microscope and there are also those who go for anything offering 12%. Based on your brief comment the exit sounds a bit too much like 'a mate has promised me some cash'. davee39: I share some of your concerns hence my questions above. I do wonder if your being a little presumptious in asserting MT ( or CAPITAL MORTGAGES) have limited property expertise?
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Post by MoneyThing on Mar 9, 2015 15:44:20 GMT
Afternoon,
Thank you all so much for the feedback so far.
Just a couple of additional points to add to the mix:
1) I would only be funding the loan myself upon assurance/commitment of the development funding was in place at the end of the 6 month period and that it was written in to the legals that this was to be used to repay our facility first (and that it was in no way conditional upon the successful appeal of planning for the student accommodation).
2) The development funding is being provided by a large and respected firm on the Island.
3) The borrower is also well known local man who has got a good track record of similar type projects.
4) Should MoneyThing proceed with the loan, like all our lending it will still be our money that is used to fund the loan first and therefore it is not dependant on being funded via the platform (on the basis that may not attract any/many investors). My wanting to discuss it on this forum was to get a feel as to whether to make it available on the platform or undertake it offline.
Kind regards,
Ed
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bugs4me
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Post by bugs4me on Mar 9, 2015 15:50:39 GMT
Afternoon, Thank you all so much for the feedback so far. Just a couple of additional points to add to the mix: 1) I would only be funding the loan myself upon assurance/commitment of the development funding was in place at the end of the 6 month period and that it was written in to the legals that this was to be used to repay our facility first (and that it was in no way conditional upon the successful appeal of planning for the student accommodation). 2) The development funding is being provided by a large and respected firm on the Island. 3) The borrower is also well known local man who has got a good track record of similar type projects. 4) Should MoneyThing proceed with the loan, like all our lending it will still be our money that is used to fund the loan first and therefore it is not dependant on being funded via the platform (on the basis that may not attract any/many investors). My wanting to discuss it on this forum was to get a feel as to whether to make it available on the platform or undertake it offline. Kind regards, Ed So can I sum this up Ed. The loan would automatically be repaid by yourself irrespective as to the outcome of any external factors - is that an accurate assessment? If that summing up is correct I cannot see any reason as to why it should not be listed with (redacted) documentation.
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Post by bracknellboy on Mar 9, 2015 15:58:46 GMT
Oddly, given how much of new kid on the block MT is, I might be more likely to go with a property loan here than I would with FS or SS.
Some concerns I might have:
Given that this is 'local community', and the general experience of short bridging loans morphing into less-short-than-expected bridging loans, I would want some clarity on the terms to apply should the loan not be paid back in time. No judgement intended, but I can envisage 2 things: - Highly likely given current lender base that MT will end up funding the bulk of the loan - You may be reluctant to rock the boat with the borrower too much if it overruns
With those 2 things in mind, I think you may need to be creative in advance in laying out what the protocol / action will be in the event of the loan overrunning. Apologies if you have already done so in relation to your property lends in general.
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Post by Deleted on Mar 9, 2015 16:08:25 GMT
1) I think you are being brave moving from little steps to a fairly big one 2) I try and stay away from bridging as it always over runs 3) There those you trust and those you trust to be competent and honest, take care you don't confuse the two 4) If I had started so well I'd think deeply about getting into something like this so early on, I'll pass this time and I suggest you do too.
I suggest the way to build this portal is lots of smaller pawnbroker transfers, it is a nice model, you are presenting the information well and keeping it simple. Moving to this just sounds "messy".
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Post by duncandive on Mar 9, 2015 16:16:54 GMT
Afternoon, Thank you all so much for the feedback so far. Just a couple of additional points to add to the mix: 1) I would only be funding the loan myself upon assurance/commitment of the development funding was in place at the end of the 6 month period and that it was written in to the legals that this was to be used to repay our facility first (and that it was in no way conditional upon the successful appeal of planning for the student accommodation). 2) The development funding is being provided by a large and respected firm on the Island. 3) The borrower is also well known local man who has got a good track record of similar type projects. 4) Should MoneyThing proceed with the loan, like all our lending it will still be our money that is used to fund the loan first and therefore it is not dependant on being funded via the platform (on the basis that may not attract any/many investors). My wanting to discuss it on this forum was to get a feel as to whether to make it available on the platform or undertake it offline. Kind regards, Ed Hi Ed, having read all the comments in response to your question, I would be happy to get involved in the loan. So I do hope that you will list it on the platform. After all it would be good to spread some of my repayments from another p2p due very soon. 6 months may end up being on the short side, however so long as this is dealt with in the legals and options made clear, I would be as confident as I have been in my other investments elsewhere.
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jonno
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Post by jonno on Mar 9, 2015 16:23:35 GMT
Ed, I've got a feeling that some posters think that you are moving straight from pawn type transactions and taking a huge leap into the "murky" world of property bridges,with little or no previous experience. It might be helpful if you give an overview of your/your company's experience in this field,and the type of property transactions that you've been involved in/over what period.
Regards Jonno.
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