DFL001 - Exeter Loan 1 - DEFAULT

There has been talk of winding down the PF to align with FCA requirements?

DFL002 may sell at a profit over loan at auction if it comes to that, not sure if proceeds can help prop up DFL001.

DFL001 would benefit from a continuity of contractors whose work is good as far as it went. Then it stopped.

I doubt even the first four houses will be sold before the spring now. Or maybe to an investor syndicate for around £2 million. Buyers would be living on a building site for ages yet - there is currently only one access to the site. A few of the other houses need protection from winter weather. Some roofs would be good, doors and windows all round even better.

I am unclear how much land is held under the DFL001 loan in addition to the plots for the 10 houses.

I could see it being sold off in 3 lots - 4 houses almost complete, then the other houses (incomplete) with the land for 4/5 more, finally the rest of the land (if any) with PP.

Lendy state: The land has planning to build over 60 houses including 10 executive homes valued at c£900k each.

The people at lendy who believed c900K should get out on their tricycles and tour around some of the existing executive estates nearby.

Try this one - double garage, 4 bedrooms and triple glazing. And quiet. 

www.rightmove.co.uk/property-for-sale/property-67950179.html#

Or for 900K you can have a hi-spec modern house set in 1/3 acre - www.rightmove.co.uk/property-for-sale/property-65584520.html

Quadruple garage, cinema or games room too.

I looked in briefly on this site the other day - all much the same, forlorn and with all scaffolding still in place. Just have to await developments on the financial front now.

Ten houses have been started so ten must surely be finished - but to what standard of opulence and technical sophistication seems now in doubt. The site could ultimately contain another 5 houses, four at the bottom end and one at the top (the compound is presently used for material storage).

I don't see the developer making any profit out of the first ten if prices have to come way down - but that rather begs the question of where all the money advanced so far has gone.

Curiously most of the properties in DFL001 and DFL002 seem to have disappeared from all the 'for sale' listings on the internet.

Not sure what is going on.

As someone stuck in both DFL001 and 002, thanks seeingred for your continued updates.

Looking at the Rightmove listings, guide prices for DFL002 apartments are around the valuation figures, and so is the reported ongoing sale of (one of) the commercial unit(s). So that may yet have a happy ending, if these prices can be achieved and things speed up a bit.

Guide price on RM for the DFL001 house is quite a bit below the original valuation but a quick look at the comparables suggests a higher price could be achieved (if the whole development was completed properly). I guess the borrower is just trying to knock the sale-ready house out cheap to help finance the completion of the rest. Slightly more optimistic that this won't be a disaster if Lendy can come to some sort of arrangement to get the thing finished.

As far as I know these are separate loans but to the same borrower.

The houses for sale in DFL001 do not include the show house as far as I know - I think they will be keeping that one until the end (whenever and if ever the end comes). There are 3 other houses almost ready - at the stage of "buyers can select type of kitchen" etc. Some of the others are at the stage of "buyer can select whether to have a roof or not".

The small new agent handling these has added a couple of the DFL002 apartments to his website in the last day or so, the others may follow. I suspect anyone making a sensible offer would get their hand snapped off.

I've never been entirely clear how much land was included in the security for DFL001 - the original scheme(s) for this area envisaged many more homes but split between developers. Most of the land on which up to 60+ homes were to have been built is still an open field. And with a lovely view of the M5.

My concerns include the degradation that may be occurring on the unfinished DFL001 houses - we have had an awful lot of heavy rain recently.

Happy to keep everyone informed. If the parties can agree terms and be sensible, I don't see why there shouldn't be a good resolution - but the achieved prices at the end of the day are unlikely to meet the initial expectations of the borrower.

Recent information suggests he is keen to try and finish what he started - which might be the best outcome all round, but he may end up with considerably less profit than was envisaged, especially as the interest charges on his loans are continuing to tick inexorably upwards.

I tend to agree. We seem to have gone from one extreme (Internationally known agents marketing upmarket property) to the other (small new local agent with 6 properties on their books, 4 of which are within DFL001 and DFL002).

Maybe some digging will unearth a reason, or as you suggest, merely a connection. If there is a connection between developer and sales agent, this might need to be disclosed to any intending purchaser, or so I believe?

Nice website though - very swish.

 

It seems clear that the borrower/developer has formed a virtual agency purely to market the properties without paying fees. He is obviously counting his pennies. On the (slightly) brighter side it may show that he is intending/hoping to complete the development and repay the loan rather than simply washing his hands and handing over the site to his creditors.

Edit: This is all guesswork of course.