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Post by lynnanthony on Feb 26, 2016 4:47:06 GMT
A 13.4% loan on the pipeline.... Almost nothing to go on... just that they signed the contract yesterday, I'm guessing this is a quickie. With the smallest second charge I've ever seen, making it to my mind a first charge. I imagine that's been taken into account in the pricing? I wonder if the amount of the prior charge currently showing is a typo? Why would our loan not pay it off to give us a first charge? Indeed, why not pay it off out of petty cash? Perhaps all will become clear when the documentation is issued.
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mikes1531
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Post by mikes1531 on Feb 26, 2016 19:00:18 GMT
Almost nothing to go on... just that they signed the contract yesterday, I'm guessing this is a quickie. With the smallest second charge I've ever seen, making it to my mind a first charge. I imagine that's been taken into account in the pricing? I wonder if the amount of the prior charge currently showing is a typo? Why would our loan not pay it off to give us a first charge? Indeed, why not pay it off out of petty cash? Perhaps all will become clear when the documentation is issued. I expect someone left out the 'k'. If the first charge were £390 k instead of £390, then the overall LTV would be 70%, which strikes me as being a lot more likely.
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agent69
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Post by agent69 on Feb 26, 2016 19:07:41 GMT
234 due to draw on Monday. 12 month bridge at 9%.
Does the low LTV justify 3% lower interest than SS?
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kermie
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Post by kermie on Feb 26, 2016 19:53:08 GMT
#233 (devon restaurant) drawndown a couple of hours ago.
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am
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Post by am on Feb 26, 2016 20:06:13 GMT
234 due to draw on Monday. 12 month bridge at 9%. Does the low LTV justify 3% lower interest than SS? A loan like this would likely have gone in at 9% or 10% at FC or MT. SS have just floated (and cancelled) a loan with for all intents and purposes an infinite percent LTV. I much prefer 9% on this to 12% on that.
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oldgrumpy
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Post by oldgrumpy on Feb 26, 2016 20:28:37 GMT
More like 8% on Fiscally Chronic - then a 1% lender's fee. Low LTV .... I'll have some safe(ish) 9% on this one. However, AC adamantly refuse to suggest straight away what % of this £240K loan will be allowed to MLIA investors (which they can do, even if they can't say what % of that our allocation will eventually be), so what shall I put in to fund it?  I've got more than ninepence. |
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am
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Post by am on Feb 26, 2016 21:17:13 GMT
A loan like this would likely have gone in at 9% or 10% at FC or MT. SS have just floated (and cancelled) a loan with for all intents and purposes an infinite percent LTV. I much prefer 9% on this to 12% on that. The valuation @ £1.2475mm is being derived from the residual method, rather than comps (I'm not sure why the valuation is £955k on the website) . As a result it's a function of assumptions made around sale prices for the possible 11 houses in the outline PP, build costs, developer's profit margin etc. The LTV seems low @ 19.27% but applying some shock/stresses to those assumptions can quickly push the LTV up. For example, a 15% reduction in the GDV and 15% increase in build costs puts the LTV @ 80.2%. Personally, I'm somewhat concerned about the build cost assumption of effectively just £92/sq ft but I know nothing of the area; it just seems rather low. To be fair, however, most SS loans are secured on valuations which have easily as wide a volatility cone around a central valuation of say 70%. Many of these loans would be 100%+ LTV in fairly modest stress scenarios. In tend to think a 300bp yield give-up on this loan is probably fair assuming those starting valuation assumptions are in the right ballpark. The activity tag says that the valuation has been revised downwards because of title issues. We were supposed to have had a revised valuation and credit report on Wednesday. We did get a revised credit report, but that uses the older valuation. My sanity check was to take rule of thumb values for building plots and sum them. Result £700,000, but I don't know values for that particular area. Regardless, there seems to be plenty of margin on the security, subject to revision in light of the yet unpublished details of the title issues. I've slashed my target investment pending clarification.
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oldgrumpy
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Post by oldgrumpy on Feb 27, 2016 18:25:44 GMT
More like 8% on Fiscally Chronic - then a 1% lender's fee. Low LTV .... I'll have some safe(ish) 9% on this one. However, AC adamantly refuse to suggest straight away what % of this £240K loan will be allowed to MLIA investors (which they can do, even if they can't say what % of that our allocation will eventually be), so what shall I put in to fund it? I've got more than ninepence. Interesting that the email I have just received seems to be encouraging investors into everything but the MLIA, which is not even mentioned. Disillusioned with low interest rates?
Dear G****y,
Our products are some of the most exciting and innovative within alternative finance. With our 3 leading accounts listed below we offer investors who understand the risks associated with peer-to-peer lending an alternative to the low interest rates found elsewhere.
Then it details the wonders of QAA, GBBA, and GEIA. Will more and more of loans be allocated to these accounts, I wonder, with the reason "there is very high demand, blah blah" ... followed by "there is little demand for MLIA blah blah so we will be discontinuing it". Chris and Stuart have said before (just check the forums) that MLIA is important to AC. I do hope so. Can you tell us please, on what statistical (or other) basis are these three accounts leading the MLIA, which has been in existence for quite a long time (and contains all my AC investment)?
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mikes1531
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Post by mikes1531 on Feb 27, 2016 19:58:45 GMT
Chris and Stuart have said before (just check the forums) that MLIA is important to AC. I do hope so. Can you tell us please, on what statistical (or other) basis are these three accounts leading the MLIA, which has been in existence for quite a long time (and contains all my AC investment)? I'm speculating, but if AC believe that the ultimate default experience will cost less than the spread between the 7% the GBBA/GEIA pay and what the GBBA/GEIA earn on the investments they hold, then those accounts will produce more profit for AC than investments made via the MLIA would, so they'll want to promote them harder. They also probably realise that there are a lot of 'set-it-and-forget-it' investors who are happy to make black-box investments and not ask penetrating questions. This is not to suggest AC don't like MLIA investors who ask questions, but they recognise that it's a lot more work to keep MLIA investors happy, so if the managed accounts make life easier for AC they might as well encourage that.
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oldgrumpy
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Post by oldgrumpy on Feb 28, 2016 0:07:55 GMT
Mmmm! That may well be so especially for the upcoming ISA war. I'm hoping AC's ISA allows all four accounts to feature, just as we can (if required) have money in all four now (though while I'm able, I would still take my chances on the MLIA).
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Post by lynnanthony on Mar 1, 2016 17:50:32 GMT
234 has drawn down. Max £563.92 (unless any more comes through in dribs and drabs).
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oldgrumpy
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Post by oldgrumpy on Mar 2, 2016 11:20:50 GMT
#235 to draw down tomorrow? Inching the rates down another notch.
I do detest that overused, imprecise and almost meaningless phrase "Mr ****** has owned the property for a number of years".
2, 5, 14 ?
Professional people should avoid this phrase.
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jonno
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nil satis nisi optimum
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Post by jonno on Mar 2, 2016 11:24:57 GMT
#235 to draw down tomorrow? Inching the rates down another notch. I do detest that overused, imprecise and almost meaningless phrase "Mr ****** has owned the property for a number of years". 2, 5, 14 ?Professional people should avoid this phrase. Mmm............I've seen this a number of times before. 
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Post by crabbyoldgit on Mar 2, 2016 19:25:16 GMT
So they have owned the property for a number of years but still need a interest only loan for the first 2 years ,one of the tennents is the son so if his business gets in problems ?, difficult. Owners main income is taxi driver ,competitive area and not the sort of income to support losses in the property business i would think.Na not for me.
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agent69
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Post by agent69 on Mar 2, 2016 19:48:32 GMT
Owners main income is taxi driver Taxi driver who wants to become a property magnate? Can't see how 72% LTV can justify the sub 9% rate, given the borrowers lack of property management experience. Can the man with the barge pole please take one step forward.
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