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Post by markp2p on Jul 26, 2016 10:20:55 GMT
I've had bit in it, but the interest rate has swayed me from putting a lot in, plus I do like liquidity, at a low rate I think its going to be harder to move on the secondary market should I want to. Perhaps it's the fact that there IS still availability that puts some off investing. It's odd though, because I think the first set of tranches filled rather quickly (presumably driven by the low LTV) I'm in the "12% addict" camp. Also I'm a bit worried that the security are wasting assets and the loan is for a long period. In some cases the lease will have only around 10 years left to run by the time the capital is to be repaid and the 1954 Act has been excluded so there is no automatic right to renew. One of the leases sold for £1,150,000 in April 2013 and expires in 2031. It is valued at £1,000,000 on a 180-day sale in 2016. I think that may be a bit optimistic but even if it is right the amount will be lower if and when the lease needs to be sold by MT. Some of the terms go up to 2021 (at which point the asset will be a 10-year non-renewable lease). I'm also a bit worried about what the forfeiture provisions in the lease are. If the tenant runs into difficulty he may stop paying the LL as well as MT, in which case perhaps the LL can forfeit and the security will cease to exist at exactly the moment it is needed.
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SteveT
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Post by SteveT on Jul 27, 2016 11:39:07 GMT
Potential decline in lease sale value will be offset by the reduction in LTV every 6 months as shorter-dates tranches get repaid. As to potential forfeiture clauses in the leases, that's something any competent solicitor should have checked out before F&P entered into the loan. MoneyThing Ed, can you possibly check this point with F&P? Thanks.
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Monetus
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Post by Monetus on Jul 27, 2016 11:48:00 GMT
I think that this is a very underrated loan - also very surprised that it's sticking around so long.
Very good security, well-known and successful business and low LTV - plus the added bonus of the LTV dropping even further as the earlier tranches repay. By the later stages of this loan the overall LTV will be relatively tiny.
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Post by MoneyThing on Jul 27, 2016 16:15:01 GMT
Potential decline in lease sale value will be offset by the reduction in LTV every 6 months as shorter-dates tranches get repaid. As to potential forfeiture clauses in the leases, that's something any competent solicitor should have checked out before F&P entered into the loan. MoneyThing Ed, can you possibly check this point with F&P? Thanks. Afternoon, There are indeed typical forfeiture provisions in these leases in favour of the landlord. However, these cannot be unreasonably enforced and to effect those forfeiture provisions the landlord must first provide the lender with proper advance legal notice so that the lender has proper opportunity to effect rectification. Indeed in all other similar cases that F&P have dealt with, the notice has been more than sufficient for the lender to be able to take proper remedial action in order to preserve the value of the leasehold security. Moreover in this case we also have the benefit of a corporate guarantee from FMF, joint and several unconditional and irrevocable personal guarantees of all the directors and shareholders of the borrower, a Bill of Sale over all the equipment, fixtures & fittings located in subject leaseholds, an assignment of the Rent Deposit Deeds held by the Landlords, non-reducing life assurance for 60 months for the directors and commercial risk trading insurance. This is therefore a very low loan to value, well secured loan and because of its amortising nature it will remain so throughout the life of the loan. Kind regards, Ed
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fp
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Post by fp on Jul 27, 2016 16:36:19 GMT
Perhaps it's the fact that there IS still availability that puts some off investing. It's odd though, because I think the first set of tranches filled rather quickly (presumably driven by the low LTV) I'm in the "12% addict" camp. Also I'm a bit worried that the security are wasting assets and the loan is for a long period. In some cases the lease will have only around 10 years left to run by the time the capital is to be repaid and the 1954 Act has been excluded so there is no automatic right to renew. One of the leases sold for £1,150,000 in April 2013 and expires in 2031. It is valued at £1,000,000 on a 180-day sale in 2016. I think that may be a bit optimistic but even if it is right the amount will be lower if and when the lease needs to be sold by MT. Some of the terms go up to 2021 (at which point the asset will be a 10-year non-renewable lease).
I'm also a bit worried about what the forfeiture provisions in the lease are. If the tenant runs into difficulty he may stop paying the LL as well as MT, in which case perhaps the LL can forfeit and the security will cease to exist at exactly the moment it is needed.This is what I like about this forum, I would never have given this a thought..... Thank you.
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Post by markp2p on Jul 27, 2016 18:41:27 GMT
I'm in the "12% addict" camp. Also I'm a bit worried that the security are wasting assets and the loan is for a long period. In some cases the lease will have only around 10 years left to run by the time the capital is to be repaid and the 1954 Act has been excluded so there is no automatic right to renew. One of the leases sold for £1,150,000 in April 2013 and expires in 2031. It is valued at £1,000,000 on a 180-day sale in 2016. I think that may be a bit optimistic but even if it is right the amount will be lower if and when the lease needs to be sold by MT. Some of the terms go up to 2021 (at which point the asset will be a 10-year non-renewable lease).
I'm also a bit worried about what the forfeiture provisions in the lease are. If the tenant runs into difficulty he may stop paying the LL as well as MT, in which case perhaps the LL can forfeit and the security will cease to exist at exactly the moment it is needed.This is what I like about this forum, I would never have given this a thought..... Thank you. Thanks... although it looks like I was pretty much wrong about everything... I'm still a 12% addict though
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registerme
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Post by registerme on Jul 31, 2016 12:57:45 GMT
This is what I like about this forum, I would never have given this a thought..... Thank you. Thanks... although it looks like I was pretty much wrong about everything... Perhaps, but you asked good questions and got useful answers as a result, so a thumbs up from me .
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SteveT
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Post by SteveT on Aug 13, 2016 8:38:27 GMT
Not much left of this now (just 2 tranches still with availability). In fact, not much left of anything
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Post by MoneyThing on Aug 13, 2016 8:40:42 GMT
Not much left of this now (just 2 tranches still with availability). In fact, not much left of anything On it....
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Investboy
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Trying to recover from P2P revolution
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Post by Investboy on Aug 18, 2016 16:18:35 GMT
Wow, aren't those the longest to fill loans ever?
To me personally the reason why is that there is too much exposure to one borrower. Splitting it to tranches and parts doesn't really matter. 10 loans are like 1 to me.
Although I still admire MT team but I'd like to see more borrowers and not more loans from the same ones.
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fp
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Post by fp on Aug 18, 2016 18:54:26 GMT
Wow, aren't those the longest to fill loans ever? To me personally the reason why is that there is too much exposure to one borrower. Splitting it to tranches and parts doesn't really matter. 10 loans are like 1 to me. Although I still admire MT team but I'd like to see more borrowers and not more loans from the same ones. Its a good loan in my opinion, I'm surprised that in a time of falling interest rates that people haven't "hedged" and locked in a good return for the next 5 years on a few grand, I have.
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Post by MoneyThing on Aug 18, 2016 18:59:05 GMT
Evening,
This loan is an interesting one really as it really is just one loan of £950,000 @ 33% LTV, only that it is split into smaller parts for practical purposes in order to cater for the amortising nature of the capital repayment loan terms with the borrower.
I appreciate that it is a 10% return which puts some off, however interestingly the initial drawdown of £500,000 went really quite quickly and so too the bulk of the second advance of £450,000. Curiously it has been the last 20% that has been very slow.
Not complaining at all, just find it quite interesting to see the dynamics of this loan.
Kind regards,
Ed
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fp
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Post by fp on Aug 18, 2016 19:10:02 GMT
Evening, This loan is an interesting one really as it really is just one loan of £950,000 @ 33% LTV, only that it is split into smaller parts for practical purposes in order to cater for the amortising nature of the capital repayment loan terms with the borrower. I appreciate that it is a 10% return which puts some off, however interestingly the initial drawdown of £500,000 went really quite quickly and so too the bulk of the second advance of £450,000. Curiously it has been the last 20% that has been very slow. Not complaining at all, just find it quite interesting to see the dynamics of this loan. Kind regards, Ed I've just set up an account for one of my businesses today, it might all go in the morning if i'm still inebriated!
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Post by markp2p on Aug 18, 2016 21:21:27 GMT
I've been constantly nibbling at this one as and when my interest payments come in - better than having them doing nothing (appreciate I could just withdraw them!)
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duck
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Post by duck on Aug 20, 2016 6:14:19 GMT
....... Not complaining at all, just find it quite interesting to see the dynamics of this loan. ..... From a lenders point of view I like this loan but blame my spreadsheets for my not buying much more! My spreadsheets calculate exposure (£) against a nominal max holding per loan (also takes into account where a borrower has more than one project) and % of total holdings across MT (personal, business and wife's accounts) and when the conditional formatting turns a cell red I stop buying! As cash injections are made to the site (direct investment and interest) buying opportunities arise since the % against total invested drop. Perhaps it is time I looked at my spreadsheet calculations Whilst my approach may not be typical I thought you might like a bit of lender feedback MoneyThing
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