PBL064 - Tenanted Office Block, Somerset DEFAULT

Yes, as suggested to SS long ago as a result of lenders' DD, this particular borrower has a record lasting many years of (with his trusty chosen solicitors) making sure everything turns out OK .... for him. I will be astonished if SS don't have a couple of years more trouble with the two connected loans here.

Appraisal standards sometimes reflect deductions and discounts for holding costs, marketing costs, and
entrepreneurial profit for such funding. In some circumstances, an appraisal may rely on the individual unit(s) to meet the agencies’ appraisal requirements
and to determine market value for calculating the loan-to-value (LTV) ratio because as higher as the LTV ratio, the more riskier the loan is for a lender.

what a revealing Gazette article that is!

As I've mentioned before, the Saving Stream due diligence on this one seems to have been non existant.

By definition, high cost bridging loans are used by people who cannot get mainstream finance for a variety of reasons and are secured.

The problem with this one, regardless of the prior history of the individual, is the valuation report.

In the accounts for the company that owns the building, the building was valued at £925k early 2015.

Having then signed a 20 year lease for over the odds rent with a tenant (another company owned by the same individual which was set up exactly 2 months before Savings Stream lent the money), the valuation jumped to £2,870m.

This was reflected in the company accounts in its valuation reserve and used by the valuers as the basis for saving stream to lend.

Potentially the office block could be worth that IF you can find a commercial property buyer AND you can find someone to pay the rent on half of it (if the individual cannot pay back Savings Stream high probability his other company can't pay the rent...)

Savings Stream seem now  now to be believing the bullshit - this individual (and his son) won't be able to re-finance against their whole business. Their personal credit risk is shot and all the companies are cross-lending to each other. When you aggregate it, there ain't no money there

I can't  believe with all the updates and warning signs especially the last update  people are still buying this and the farm  loan  .Must be true a "fool and his money are  soon parted"

Interesting article in Telegraph re struck off solicitor

I wonder who his 'business partner' could be

056/064 are looking increasingly ominous & SS credibility is on the line with that 056 update of 2 months ago
 In legals. Offers received that will sufficiently repay the loan.