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Post by Deleted on Jul 19, 2016 8:08:31 GMT
"Scottish leisure park" what did you miss in the title?  |
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sam i am
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Post by sam i am on Jul 19, 2016 12:55:35 GMT
Valuation methodology (9.19 onwards) looked at the residual method (development value) and also implied value given EBITDA forecasts and an assumed rate of return which may have produced higher figures. These might calculate a theoretical value for a successful and ongoing business but I'm not sure it would represent the value for a forced sale.
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jcb208
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Post by jcb208 on Jul 20, 2016 10:41:21 GMT
Interesting update from Savingstream
PBL - Leisure, Scotland
The Leisure park has a valuation re-confirmed by the Valuer as £4.15m. The £2.1m sale price that people have seen is a price that has been agreed for a quick sale and therefore our borrower will be purchasing the site with a large discount. We will be obtaining indemnity insurance to cover a claim for a transfer at an undervalue, following the advice from our lawyers. It is also worth noting that the bridging finance industry is a consequence of cases just like these. Purchasing discounted assets on quick sale requires short term fast methods of funding to ensure an opportunity is not missed. We have done extensive due diligence, carried out due necessary checks and insurance policies have been put in place. Therefore. we are happy to stand by the valuation and our terms.
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Post by harvey on Jul 20, 2016 11:00:10 GMT
Hmmm. But if the loan defaults and the asset has to be recovered then we are in a quick, forced sale situation and therefore the quick sale figure here is more relevant than the market value without any hindrances and without being in a forced sale scenario and with a normal marketing period without either party operating under any form of duress. Vendor must be pretty desperate if he's prepared to throw away two million pounds just for a quick sale.
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adrianc
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Post by adrianc on Jul 20, 2016 11:10:39 GMT
Might just like to run that past an anonymouser.
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ilmoro
Member of DD Central
'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 Jul 20, 2016 14:02:33 GMT
... The £2.1m sale price that people have seen is a price that has been agreed for a quick sale and therefore our borrower will be purchasing the site with a large discount. said in an earlier post that it appeared this property had been on the market for approx. 5 yrs. The earliest sale particulars I've managed to locate are dated 26th October 2012 (see attached image) - that said, ALL sale particulars for this facility up until mid 2016 carried a guide price of £2.1m, but were for the whole facility, c.147 acres, not the c. 104 acres less one residence that is now being offered as security for this loan. If the guide price of £2.1m was/is being paid for a ' quick sale' after being marketed for the same price for c. 4yrs, without success, what is a fire sale for the remaining c. 104 acres going to realise, and when? First listed on RM Sep 2011
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Post by harvey on Jul 20, 2016 14:13:48 GMT
A five-year marketing period and a consistent guide price of around 2.1 million pounds. The expressions used by SS like 'quick sale' and 'large discount' don't quite seem to fit the circumstances as they appear.
I'm gradually scaling back my investments anyway but I still have a piece of something that looks ok but this one has too many alarm bells ringing for me and I'm going to sit this one out.
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stokeloans
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Post by stokeloans on Jul 20, 2016 14:24:15 GMT
I haven't been an SS investor for that long but some of their recent valuations have me a trifled concerned,this one in particular.It defies all logic
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Jul 20, 2016 15:18:10 GMT
Hmmm. But if the loan defaults and the asset has to be recovered then we are in a quick, forced sale situation and therefore the quick sale figure here is more relevant than the market value without any hindrances and without being in a forced sale scenario and with a normal marketing period without either party operating under any form of duress. Vendor must be pretty desperate if he's prepared to throw away two million pounds just for a quick sale. Which again brings into question the reliability of the valuation report > £3.6m 180 Day Market Valuation > £3.2m 90 Day Market Valuation Any competent surveyor should be performing a quick search on Google to find if there are any details on the property, and then would have stumbled on to the right move listing. I note that other valuation reports do just this, and actively base their valuation on any recent or listed price.
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mikes1531
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Post by mikes1531 on Jul 20, 2016 15:22:24 GMT
The good news is that the loan amount still is less than the price. And if the loan includes the usual retained interest and SS fees, then the borrower must be putting a large chunk of their own -- or someone else's -- money into the project.
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Jul 20, 2016 15:53:55 GMT
The good news is that the loan amount still is less than the price. And if the loan includes the usual retained interest and SS fees, then the borrower must be putting a large chunk of their own -- or someone else's -- money into the project. 86% LTV... certainly not another Dudley Wasteland  The problem is that SS have not provided us with the (proposed) sale price, it was DD from another investor. It's something SS should be getting the surveyor to do; asking them to gather information of recent sale price, listed price and proposed sale price to the borrower (I note that other valuation reports have used recent sale prices and agreed sale price as a basis for the market value).
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Post by Deleted on Jul 20, 2016 16:12:09 GMT
Interesting update from Savingstream
PBL - Leisure, Scotland
The Leisure park has a valuation re-confirmed by the Valuer as £4.15m. The £2.1m sale price that people have seen is a price that has been agreed for a quick sale and therefore our borrower will be purchasing the site with a large discount. We will be obtaining indemnity insurance to cover a claim for a transfer at an undervalue, following the advice from our lawyers. It is also worth noting that the bridging finance industry is a consequence of cases just like these. Purchasing discounted assets on quick sale requires short term fast methods of funding to ensure an opportunity is not missed. We have done extensive due diligence, carried out due necessary checks and insurance policies have been put in place. Therefore. we are happy to stand by the valuation and our terms. This, in my humble opinion, is an unacceptable answer to proper, punctual and well described huge problem in the valuation report for this property. I am afraid this decision to continue with a completely wrong valuation defies any alleged 'prudent' investing SS has claimed since the beginning and mostly highlighted after Brexit. I have no other suggestion to anyone rather than stay away completely from this property. I am not sure how much we can move as forum followers, but I am confident that if SS have to underwrite this massively and will not find much space for it in the market, they will think twice before proposing anything like this again.... Of course things might go well. But investing must be a balancing act and a prudent view must be kept all the time. I am out of this scottish gift to the borrower.
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mikes1531
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Post by mikes1531 on Jul 20, 2016 19:21:33 GMT
I am not sure how much we can move as forum followers, but I am confident that if SS have to underwrite this massively and will not find much space for it in the market, they will think twice before proposing anything like this again.... One valuable info source that SS have is the pre-funding amounts. I expect they will keep a close eye on those, and if they total considerably less than the amount to be lent then SS probably would have a bit of a rethink. Of course, that total could change significantly between the time the Go-Live notice is circulated and the time the loan actually goes live, but SS have a bit of experience with that as well so they ought to be able to assess the likelihood of an adverse change in the PF total at the last minute. They may see the light yet!
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Post by GSV3MIaC on Jul 20, 2016 20:34:15 GMT
/mod hat off
There's probably fewer than 20 people who can significantly affect the overall PF levels, and I don't know how many of them read the forum (but I bet quite a few read the valuation documents, unless they have way more money than sense).
I wonder if the valuers will be putting much of their own hard-earned-cash into this loan? The over-valuation looks like worse than 2x, given that what the security is on is rather less of the site than what can/will be bought for the £2.1million?
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boble
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Post by boble on Jul 20, 2016 22:15:33 GMT
It is a fact that some "borrowers" will in effect use a loan as a means of selling a property.
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