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Post by reeknralf on Jul 18, 2016 17:25:57 GMT
I see a new loan in the pipeline with a valuation of £4.15M, and LTV of 44%. This sounds pretty attractive until you find said property is currently for sale on several portals for £2.1M. As far as I can see there is nothing in the loan security, that is not included in the £2.1M sale. In fact the area of land is lower in the security, than it is in the sale, suggesting some is being withheld.
These recurring huge disparities between sale prices and valuations make me wonder what I'm getting involved in.
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Jul 18, 2016 17:57:07 GMT
I see a new loan in the pipeline with a valuation of £4.15M, and LTV of 44%. This sounds pretty attractive until you find said property is currently for sale on several portals for £2.1M. As far as I can see there is nothing in the loan security, that is not included in the £2.1M sale. In fact the area of land is lower in the security, than it is in the sale, suggesting some is being withheld. These recurring huge disparities between sale prices and valuations make me wonder what I'm getting involved in. Please keep pipeline loans it in the Pipeline Loans thread (a lot of these pipeline loans disappear, so they don't really require individual posts  )! You're quite right, though; SS should (regardless of a valuation report) base the LTV off any recent public sale figures. The garden centre loan comes to mind  ...
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micky
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Post by micky on Jul 18, 2016 17:58:40 GMT
Thanks for sharing this info. Does the lower valuation include both plots of land?
Just wondering if it would be sensible to withdraw my pre-funding.
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Jul 18, 2016 18:22:37 GMT
Thanks for sharing this info. Does the lower valuation include both plots of land? Just wondering if it would be sensible to withdraw my pre-funding. It does seem to be the same property. Strangely, the property listed on SS has 104 acres, whereas the one on Rightmove is listed as 147 acres  ... The SS overview does say that " first lodge purchased by Client", but that doesn't account for the 2m discrepancy... Will dig deeper to see what I can find.
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Post by geraldine1210 on Jul 18, 2016 18:28:35 GMT
As said, these loans can disappear. This one has.
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Jul 18, 2016 18:32:24 GMT
As said, these loans can disappear. This one has. Nope; still there B******** Farm, Scotland
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Post by reeknralf on Jul 18, 2016 18:41:30 GMT
Please keep pipeline loans it in the Pipeline Loans thread (a lot of these pipeline loans disappear, so they don't really require individual posts )!
I'm not sure it's important that this particular loan may not draw down. The valuation is twice the asking price. Like the garden centre. Like the pub. I think it is worth drawing people's attention to the fact that borrowers on SS sometimes have a zero-equity stake from the off.
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Post by geraldine1210 on Jul 18, 2016 18:45:54 GMT
As said, these loans can disappear. This one has. Nope; still there B******** Farm, Scotland Sorry. I thought they meant another one. This has been in the pipeline for a while.
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Jul 18, 2016 18:51:45 GMT
Please keep pipeline loans it in the Pipeline Loans thread (a lot of these pipeline loans disappear, so they don't really require individual posts )!
I'm not sure it's important that this particular loan may not draw down. The valuation is twice the asking price. Like the garden centre. Like the pub. I think it is worth drawing people's attention to the fact that borrowers on SS sometimes have a zero-equity stake from the off. Agreed, but then maybe you should name (rename?) the thread "overvalued security and incorrect LTV"? I've come across inflated valuations on SS quite a lot; first and foremost I would prefer to see the 90day valuation used! However, if the borrowers intention is to buy the indicated security, then SS really should be letting us know the sale price, and if that indicates that the LTV (using the purchase price as "value") is over 70% (or even 100%) then it would be up to the investor whether they want to take that risk or not. It certainly is an issue I would like to see SS deal with!
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bloodycat
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Post by bloodycat on Jul 18, 2016 18:54:22 GMT
It also looks like they may have been trying to sell it for nearly 5 years which makes the valuation look even more optimistic.
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ben
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Post by ben on Jul 18, 2016 19:05:19 GMT
As the garden centre shows the it was more then 100% which is pretty nice for the borrorower.
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Post by trentenders on Jul 18, 2016 19:41:01 GMT
Is there any explanation for the apparent discrepancy savingstream? Even if this loan ends up being pulled, I hope that Savingstream still offer a response, as this really dents my confidence in the firm. |
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micky
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Post by micky on Jul 18, 2016 19:50:21 GMT
Maybe something, maybe nothing but SS valuation includes plot/s of farmland for development that the original sale particulars do not seem to include.
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Post by harvey on Jul 18, 2016 22:20:08 GMT
Common sense says you can't get a 12% return without accepting quite a lot of risk. If you were lending against a land and Property asset at a genuine loan to value ratio of less than 70% with rock solid security you would not be taking on much risk at all. With this sort of thing there's always going to be some blue sky thinking, some brushing the nasties under the carpet,some gilding the lily and some spin going on and that's why you get 12% and not 7%. And most importantly that's why it's very important for a canny investor to carry out his own due diligence on the loans and invest acordingly and with discretion.
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webwiz
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Post by webwiz on Jul 19, 2016 7:56:44 GMT
Alternatively, and IMO preferably, have maximum diversification so that any defaults have limited effect on overall yield. Maximum implies including some loans that you are not sure about. Trying to out-think SS who have far more information than we do is IMO a mugs game.
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