ben
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Post by ben on Jan 7, 2016 9:10:41 GMT
I do not understand why you can not discuss particular loans? If you are discussing that you disagree with a certain part of the report surely that is the idea of this forum.
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shimself
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Post by shimself on Jan 7, 2016 9:40:53 GMT
I do not understand why you can not discuss particular loans? If you are discussing that you disagree with a certain part of the report surely that is the idea of this forum. The mods will say it better - but they don't want the forum to get into trouble by allowing criticism (esp libel of third parties, such as the valuer mentioned in this thread)
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ben
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Post by ben on Jan 7, 2016 9:44:27 GMT
I do not understand why you can not discuss particular loans? If you are discussing that you disagree with a certain part of the report surely that is the idea of this forum. The mods will say it better - but they don't want the forum to get into trouble by allowing criticism (esp libel of third parties, such as the valuer mentioned in this thread) There is a difference between libel and not agreeing with someone, if you disagree with a point of a report surely its a good thing to discuss it
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Post by Deleted on Jan 7, 2016 9:45:45 GMT
... What I do value, is the comments on this forum, even after I have read the details I always come on here to see what others think and it gets me to scurry back and check which of us is right. I suspect a link to p2pindependentforum would be more valuable than a new form. But (even on this thread) we are told we cannot discuss any particular loan here in a clear way. My philosophy is moving ever more strongly to restricting my activity to those platforms which have a q&a/forum. Rather a new forUm than a new form You are right, but I generally find that we do talk about loans we just don't mention the names, after all a large development next to two rivers could be anywhere but we all know what we are talking about. The place in Bristol 
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on Jan 7, 2016 9:48:10 GMT
The worst case probably is when the developer cannot complete the project and the lender is left trying to sell a part-finished project. In that situation, it seems quite likely that the Monitoring Surveyor's valuation is unlikely to be shared by any new developer as they will have their own opinion of the best way to finish the project and that may involve the undoing of some of the previous developer's work . Very helpful, thanks Ben. One question on this paragraph: Shouldn't the Monitoring Surveyor base his valuation on what a new developer might reasonably pay in the event that the current one had to make a forced sale?
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awk
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Post by awk on Jan 7, 2016 10:00:17 GMT
Bringing us back on topic, I'm a bit confused.
Having read the Durham report, I think it's a valuation as of today - i.e. without any additional planning permission. So, I'm assuming that if the loan went belly up we might expect to get somewhere close to the valuation back?
Or have I missed something (been buying parts since 6.00 this morning and got bot scars on my fingers)
awk
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ben
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Post by ben on Jan 7, 2016 10:12:15 GMT
That is what it says it is worth on the open market if was listed today.
But if planning permission was denied who would actually want to buy it? and if the loan went bad they would try to do a quick sale so anybody wanting to buy it would be out for a bargain knowing that most others would not want it either
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Post by Deleted on Jan 7, 2016 16:25:05 GMT
with no planning permission it is a farmyard with outbuildings. Not sure what you'd pay for that...
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am
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Post by am on Jan 7, 2016 17:43:31 GMT
What I am concerned about, inter alia, is the inclusion of hope value in LTVs. If planning permission is obtained there will be an uplift in value, and the borrower will refinance and repay us, and all should be well. But, if planning permission is rejected, the hope value will at least partially evaporate, the borrower's exit strategy disappears, and our margin of safety on the LTV diminishes or vanishes. As the security is to cover the case when the borrower's plans go astray, the valuation should reflect that case.
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Post by meledor on Jan 7, 2016 19:17:05 GMT
What I am concerned about, inter alia, is the inclusion of hope value in LTVs. If planning permission is obtained there will be an uplift in value, and the borrower will refinance and repay us, and all should be well. But, if planning permission is rejected, the hope value will at least partially evaporate, the borrower's exit strategy disappears, and our margin of safety on the LTV diminishes or vanishes. As the security is to cover the case when the borrower's plans go astray, the valuation should reflect that case.
There shouldn't be any hope value in the valuation. If planning permission is not granted we are relying on the market value as much as any other property loan where there isn't a planning application.
That's in general terms (which is what the OP wanted) but there may be other factors looking at specific deals - Durham was mentioned and the recent history concerning this property and the current and previous owners is rather colourful to say the least.
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max
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Post by max on Jan 7, 2016 20:11:08 GMT
Very interesting. I think the answer to the tread question can be clarified with an ever more frequent example:
The professional evaluation says "the land with planning permissions is worth 500k and 1m after completion of the works".
Then the P2Platform states "a loan of 300k is sought to purchase the land w planning permissions leaving lenders with 60% LTV and 30% GDV".
This market transaction clearly contradicts the professional valuation. Yet it's very frequent. Everyone wins -in the future, maybe.
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mikes1531
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Post by mikes1531 on Jan 7, 2016 20:56:33 GMT
Very interesting. I think the answer to the tread question can be clarified with an ever more frequent example: The professional evaluation says "the land with planning permissions is worth 500k and 1m after completion of the works". Then the P2Platform states "a loan of 300k is sought to purchase the land w planning permissions leaving lenders with 60% LTV and 30% GDV". This market transaction clearly contradicts the professional valuation. Yet it's very frequent. Everyone wins -in the future, maybe. : Can you please explain the contradiction you see? I don't see one. But perhaps there's more info available than shown above. Is there something that suggests that the purchase price isn't somewhere around £500k?
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max
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Post by max on Jan 7, 2016 22:40:34 GMT
Very interesting. I think the answer to the tread question can be clarified with an ever more frequent example: The professional evaluation says "the land with planning permissions is worth 500k and 1m after completion of the works". Then the P2Platform states "a loan of 300k is sought to purchase the land w planning permissions leaving lenders with 60% LTV and 30% GDV". This market transaction clearly contradicts the professional valuation. Yet it's very frequent. Everyone wins -in the future, maybe. : Can you please explain the contradiction you see? I don't see one. But perhaps there's more info available than shown above. Is there something that suggests that the purchase price isn't somewhere around £500k? The land will be purchased for 300k and not one penny more. Sometimes, the borrower will provide for interests and initial developing costs from other sources, sometimes from her own funds. In any case, it is advised to bid early and drawdown quickly to secure this once in a lifetime deal. Ah, sure the discount is thanks to a quick sell cash in hands -our cash.
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t
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Post by t on Jan 8, 2016 4:52:55 GMT
with no planning permission it is a farmyard with outbuildings. Not sure what you'd pay for that... Maybe someone would buy it to grow some money trees on 
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mikes1531
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Post by mikes1531 on Jan 8, 2016 15:57:03 GMT
max : Can you please explain the contradiction you see? I don't see one. But perhaps there's more info available than shown above. Is there something that suggests that the purchase price isn't somewhere around £500k? The land will be purchased for 300k and not one penny more. : How do you know that? Are you basing this on actual evidence, or just on your feeling about how these things happen?
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