ben
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Post by ben on May 22, 2016 11:06:43 GMT
As has been put before if they needed the money that urgently and 24 hours would not do I wonder how actually competent they are as surely someone must have noticed that this money would be needed in the near future.
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on May 22, 2016 11:42:38 GMT
My head hurts. Are there many people holding £500k parts in live loans? Did the borrower really phone and say "I need £500k NOW. No, NOW. No, 24hrs time won't do." - and would somebody with such poor forecasting really be a borrower that we'd all want to lend money to in the first place? And furthermore... AIUI, the way DFLs are supposed to work, subsequent tranches would be released only after SS receives a report from the Monitoring/Quantity Surveyor confirming that enough progress has been made on the project that the value has increased significantly enough that the additional borrowing won't increase the overall LTV above the agreed level. Since the DFL002 LTV is 70%, the value must increase by at least £714k for a £500k tranche to be released. There is a report from the MS available via the DFL002 loan page indicating that a drawdown of £432k is reasonable. But it seems to suggest that £432k of work had been done. Has there been an unstated assumption made that £432k of work adds £714k of value? Or is the LTV rising? Also, it's dated 4/May. Did it really take nearly two weeks to get it from the MS to Lendy? Finally, the first post in this thread states that the initial drawdown was £1.37M of the £2.66M maximum amount of this loan. Does the recent £500k advance mean the loan balance is now up to £1.87M? Or is most of the above rubbish, and the £500k just released by Lendy was part of the initial £1.37M drawdown? But if that's the case then the initial release of parts for this loan would have been £0.87M, and that would have been little more than the £0.81M rolled forward from PBL050 into this loan. It doesn't help that SS don't make clear exactly how much of a given loan actually has been advanced to a borrower. I'm beginning to think that 'AIUI' is a significant overstatement. I think I'm going to join adrianc 's 'My Head Hurts' Club!  Actually ISTM that the value of the work done is actually only £253k, the rest has been spent on fees etc which dont presumably add value to security. We have a shell and some part done work, ie roof, trenching, sandblasting joinery underway but not complete. Fully agree a real lack of clarity on exactly what value of security actually is/sums advanced. Room for one more in the 'Club' house? 
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cooling_dude
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Post by cooling_dude on May 22, 2016 12:15:09 GMT
And furthermore... AIUI, the way DFLs are supposed to work, subsequent tranches would be released only after SS receives a report from the Monitoring/Quantity Surveyor confirming that enough progress has been made on the project that the value has increased significantly enough that the additional borrowing won't increase the overall LTV above the agreed level. Since the DFL002 LTV is 70%, the value must increase by at least £714k for a £500k tranche to be released. There is a report from the MS available via the DFL002 loan page indicating that a drawdown of £432k is reasonable. But it seems to suggest that £432k of work had been done. Has there been an unstated assumption made that £432k of work adds £714k of value? Or is the LTV rising? Also, it's dated 4/May. Did it really take nearly two weeks to get it from the MS to Lendy? Finally, the first post in this thread states that the initial drawdown was £1.37M of the £2.66M maximum amount of this loan. Does the recent £500k advance mean the loan balance is now up to £1.87M? Or is most of the above rubbish, and the £500k just released by Lendy was part of the initial £1.37M drawdown? But if that's the case then the initial release of parts for this loan would have been £0.87M, and that would have been little more than the £0.81M rolled forward from PBL050 into this loan. It doesn't help that SS don't make clear exactly how much of a given loan actually has been advanced to a borrower. I'm beginning to think that 'AIUI' is a significant overstatement. I think I'm going to join adrianc 's 'My Head Hurts' Club! Actually ISTM that the value of the work done is actually only £253k, the rest has been spent on fees etc which dont presumably add value to security. We have a shell and some part done work, ie roof, trenching, sandblasting joinery underway but not complete. Fully agree a real lack of clarity on exactly what value of security actually is/sums advanced. Room for one more in the 'Club' house? I was always under the impression that DFLs were going to be hard to value during development, and that a QS report was required simply to confirm the work was progressing as expected. When this was discussed when these new DFLs were first announced, it was explained by some members here that are in the industry that early works would likely decrease the value of the security. Which doesn't look good considering that the LTV before development was 104%, but as I'm sure SS would be keen on reminding us it's all about the LTGV with these DFLs. However, that does rely on the project actually getting completed on time and on budget...
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adrianc
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Post by adrianc on May 22, 2016 12:49:46 GMT
I was always under the impression that DFLs were going to be hard to value during development, and that a QS report was required simply to confirm the work was progressing as expected. Yup. I'm not getting overly excited about £700k of work being done to allow £500k of T2 to be released. Anybody who's done any kind of building project - even something as small as a garage or a conservatory - knows that money disappears into big holes in the ground with zero visible change, then suddenly there's huge visible changes with relatively (hah!) little extra money. That's not what's making my head hurt...
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Post by GSV3MIaC on May 22, 2016 15:11:54 GMT
However we feel that in reality it is no different to a large investor selling a large loan part on the secondary market. Lendy was holding £500k of availability in DFL002 and decided to make it available for sale as the borrower required funds quickly. My head hurts. Are there many people holding £500k parts in live loans? Did the borrower really phone and say "I need £500k NOW. No, NOW. No, 24hrs time won't do." - and would somebody with such poor forecasting really be a borrower that we'd all want to lend money to in the first place? Nope, the largest single part we saw any investor holding (back when we could look) was £200k .. only Lendy have bigger loan parts, and they don't actually 'have' them, they create them out of thin air (and then sell them) when required. Personally I think the 'speed required' is a poor excuse - the difference between selling it to Mr X on the SM, and then waiting 24-48 hours for the actual cash to appear, or putting it out for pre-funding (24 hours notice) and then allocating and waiting 24-48 hours for the cash to appear, does not seem very significant. Pumping it out as 100 £5k chunks (or whatever) at 5 minute intervals would have at least given a few more folks a chance.
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oldgrumpy
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Post by oldgrumpy on May 22, 2016 15:23:17 GMT
..and an e-mail to all lenders saying this tranche would be suddenly available 1/2/even 4 hours before doing it would have taken the office monkey and his hamster (no offence to monkeys - much) less than ten minutes to do. Wouldn't be enough for everyone, but a lot more lenders would have been able to invest in a chunk.
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boble
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Post by boble on May 22, 2016 20:41:04 GMT
Yup. I'm not getting overly excited about £700k of work being done to allow £500k of T2 to be released. Anybody who's done any kind of building project - even something as small as a garage or a conservatory - knows that money disappears into big holes in the ground with zero visible change, then suddenly there's huge visible changes with relatively (hah!) little extra money. That's not what's making my head hurt... The report from any Monitoring QS usually takes around 1 to 2 weeks after the month end, to reach the Client / Funder. Within that period, further work has (usually) been done on site raising the total value of work done. It is difficult to value a part completed building with any certainty as it is a matter of opinion on whether the work done has the same or greater value than the cost (what the builder has been paid). as adrianc says, the costs of getting "out of the ground", are proportional much higher than the rest of the individual building costs. The first payment tranche is used to pay the majority of the fees of the professional team etc and it is not unknown for these to be in the region of 20% to 25% of the build cost. The "mobilisation" costs of setting up the site infrastructure can be another 3% to 5% of the build cost. So within the first month or so you can spend a huge chunk of money and have very little to show for it. Changing the stated LTV for each tranche is of very little use as it is not really practical to put a value on the work done and it will be skewed by the cost of fees etc. In short, the value of a development is not the value of the land plus the cost of the build to date. The contract between the lender and the developer is to meet the cost of the works of completed in accordance with the MS certificate. In their report, the MS should also report on the progress development generally, to include such things as delays, design changes,issues in the ground, materials supply and cost overruns. When SS announced that they were venturing into development funding, I expressed my concern to them that this is generally far more risky than bridging funding. They advised that they had employed someone to specifically head up this area of their lending. I expressed that I hoped he was up to their expectations. Only time will tell. Some investors may prefer to avoid the development loans, however, I suspect that this will be SS primary growth area.
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cooling_dude
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Post by cooling_dude on Aug 24, 2016 10:00:34 GMT
Tranche 3 has just gone live
£600 allocation
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cooling_dude
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Post by cooling_dude on Oct 14, 2016 11:46:19 GMT
<another> Bump
Currently adding to OP due to new VR
The Current LTV is 109%
The Current 90 Day LTV is 135%
SS notes that the development costs have gone up, but so has the GDV.
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elliotn
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Post by elliotn on Oct 14, 2016 16:14:47 GMT
Getting VRs to come up with the magical 70% surely undermines their means as an independent measure of value.
Such as disregarding recent purchase prices of borrowers to provide them with extra working capital in PBLs.
These often appear more a tool more to meet the borrower's or Lendy's requirements than ensure conservative valuation of our security.
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puffin
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Post by puffin on Oct 15, 2016 10:07:33 GMT
£140 allocation
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jcb208
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Post by jcb208 on Oct 15, 2016 10:21:54 GMT
A lot more people investing then I thought. Shows how popular Savingstream has become
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puffin
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Post by puffin on Oct 15, 2016 10:25:14 GMT
A lot more people investing then I thought. Shows how popular Savingstream has become How can you see how many invested in the new tranche? edit:To answer my own question Amount raised /allocation.
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jcb208
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Post by jcb208 on Oct 15, 2016 10:27:17 GMT
Near enough would be tranche divide by amount allocated
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cooling_dude
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Post by cooling_dude on Oct 15, 2016 10:28:30 GMT
A lot more people investing then I thought. Shows how popular Savingstream has become How can you see how many invested in the new tranche? You can't You can see if there was an increase in investors (but that would require you to note the investors before and after the tranche), but that wouldn't indicate the existing investors that have invested. We can guess, though... £271,180 / £140 = 1937 investrs. However, some may have asked for less than the allocation
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