cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Jul 25, 2016 13:28:08 GMT
This Loan Is LIVE
| Loan Amount | : | £1,160,250
| | Security Value | : | £1,785,000
| | SS Indicated LTV | : | 65%
| | 90 Day Market Valuation | : | £1,600,000
| | LTV Based on 90 day Market Valuation | : | 73% |
PLEASE NOTE : This post (and all my DD posts) are no longer being updated by myself (besides the basic loan status)
Loan Information & Observations
Borrower
- SS state that our borrower is self-employed within the music industry and looking to make property investments.
- The valuation report mentions that our borrower is P**** O******, and a quick look online confirms the above (a history in the music industry). She is currently the director and 50% shareholder in a "Construction of domestic buildings" business. However, since corporation (May 2014) this company has had little to no activity.
- This seems to be a 36-year-old borrower, with little to no experience in this field.
Loan
- The borrower wants to purchase this property to start a portfolio of high-end properties. Needs the funds quickly to complete.
Security
- The subject property comprises the original northern gatehouse to S**** Park which has been altered, extended and adapted to create a modern contemporary 4 / 5 bedroom house which has been finished to a very high standard.
- The original gatehouse was subject to a number of extensions and additions, including a swimming pool at basement level with a single storey detached garage building on the eastern boundary.
- When the property was purchased by the vendor in July 2014 (for £325,000) it was in a dilapidated and distressed condition.
- The above vendor has since undertaken significant works including the refurbishment of the Grade II Listed gatehouse, retention and refurbishment of previous extensions, conversion of the former garage into a master bedroom (en-suite), the creation of a fully glazed entrance hall to infill the gap between the original dwelling and the former garage and the conversion of the basement to create kitchen, dining room and living room with direct access to a terrace at the rear. In addition the basement swimming pool structure has been converted into habitable space with the former pool area being infilled.
- According to Rightmove, the property recently sold (STC) for c£1,800,000, presumably to our borrower (I guess our borrower is awaiting funds via this loan to complete the sale)
- In addition to the above point, the valuation report indicates that at the time of the inspection it was indicated that the applicant proposed to purchase the property for £2,200,000. The report considers this to be in excess of Market Value and their research and enquiries have not revealed any evidence that would support a Market Value at this level.
Exit Strategy
- The borrower is already in discussions to re-finance (taken from the overview on 25/07/16)
| Code Number Assigned | : | 25/07/2016 | | Loan went live @ | : | 26/07/2016 | | Allocation | : | 100% | | Amount of Investors @ Live | : | 890
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sam i am
Member of DD Central
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Post by sam i am on Jul 25, 2016 21:14:57 GMT
I don't get this one. I'm OK with the property itself but for me the question is: Why?
The borrower wants to start a portfolio of high end properties. Presumably it is a posh buy-to-let. There is no mention of any development opportunity here - it's a pure investment. There are a lot of properties available and it's a buyers market so why the rush for this one? Purchasing with a loan from Lendy is going to be an expensive way to buy, so the property has to be cheap to give a sensible return on investment otherwise just buy one of hundreds of other properties that are available where you have the time to get a standard rate BTL mortgage.
If the property is particularly cheap with a huge discount being given by a desperate vendor then I might get it. But paragraph 16.7 in the valuation report says it is indicated that the applicant proposed to purchase the property for £2.2m. Not only is this is significantly above the valuation, it is also significantly above the asking price!
So the question is: Why?
I think there's something we don't know.
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cooling_dude
Bye Bye's for the PPI
Posts: 2,853
Likes: 4,298
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Post by cooling_dude on Jul 25, 2016 21:22:28 GMT
I don't get this one. I'm OK with the property itself but for me the question is: Why? The borrower wants to start a portfolio of high end properties. Presumably it is a posh buy-to-let. There is no mention of any development opportunity here - it's a pure investment. There are a lot of properties available and it's a buyers market so why the rush for this one? Purchasing with a loan from Lendy is going to be an expensive way to buy, so the property has to be cheap to give a sensible return on investment otherwise just buy one of hundreds of other properties that are available where you have the time to get a standard rate BTL mortgage. If the property is particularly cheap with a huge discount being given by a desperate vendor then I might get it. But paragraph 16.7 in the valuation report says it is indicated that the applicant proposed to purchase the property for £2.2m. Not only is this is significantly above the valuation, it is also significantly above the asking price! So the question is: Why? I think there's something we don't know. I've got other worries This is a young inexperienced borrower, with ambitions above their current means. Currently, the borrower (a 36-year-old Nigerian), has little to no experience in property management, and their first apparent toe dip is in high-end +1m property. This is a borrower that lives in a 300k flat in Bromley... I know every property tycoon has to start somewhere, but from a SS investor POV, this seems risky to me...
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sam i am
Member of DD Central
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Likes: 555
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Post by sam i am on Jul 25, 2016 21:29:08 GMT
I don't get this one. I'm OK with the property itself but for me the question is: Why? The borrower wants to start a portfolio of high end properties. Presumably it is a posh buy-to-let. There is no mention of any development opportunity here - it's a pure investment. There are a lot of properties available and it's a buyers market so why the rush for this one? Purchasing with a loan from Lendy is going to be an expensive way to buy, so the property has to be cheap to give a sensible return on investment otherwise just buy one of hundreds of other properties that are available where you have the time to get a standard rate BTL mortgage. If the property is particularly cheap with a huge discount being given by a desperate vendor then I might get it. But paragraph 16.7 in the valuation report says it is indicated that the applicant proposed to purchase the property for £2.2m. Not only is this is significantly above the valuation, it is also significantly above the asking price! So the question is: Why? I think there's something we don't know. I've got other worries This is a young inexperienced borrower, with ambitions above their current means. Currently, the borrower (a 36-year-old Nigerian), has little to no experience in property management, and their first apparent toe dip is in high-end +1m property. This is a borrower that lives in a 300k flat in Bromley... I know every property tycoon has to start somewhere, but from a SS investor POV, this seems risky to me... Yes, I'd found that info about the borrower but wasn't sure about mentioning it. Also the two companies she had previously been involved with both dissolved after about a year. None of this necessarily indicates anything negative. But I couldn't find any positive history either.
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sam i am
Member of DD Central
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Post by sam i am on Jul 25, 2016 21:36:12 GMT
cooling_dude , I note the point you just added about the property being Sold STC for £1.8m and assuming that this was our borrower. Where did you get this info from? If it was the Rightmove listing then I'm not sure this tells us anything more than the property is Sold STC and the asking price was £1.8m. It doesn't tell us what offer was actually accepted. Edit: I have just noted the little c. But we don't know how close c1.8m is to 1.8m 
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cooling_dude
Bye Bye's for the PPI
Posts: 2,853
Likes: 4,298
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Post by cooling_dude on Jul 25, 2016 21:47:45 GMT
cooling_dude , I note the point you just added about the property being Sold STC for £1.8m and assuming that this was our borrower. Where did you get this info from? If it was the Rightmove listing then I'm not sure this tells us anything more than the property is Sold STC and the asking price was £1.8m. It doesn't tell us what offer was actually accepted. Edit: I have just noted the little c. But we don't know how close c1.8m is to 1.8m I'm still carrying out my DD post due to getting home late because apparently the A1 at scots corner has been converted to a car park and nobody told me  I noted the Rightmove listing from others in the Pipeline Loans thread, but also came across the valuation note that the borrower has proposed to purchase the property for £2,200,000 which I have since added to my post.
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sam i am
Member of DD Central
Posts: 697
Likes: 555
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Post by sam i am on Jul 25, 2016 21:51:35 GMT
cooling_dude , I note the point you just added about the property being Sold STC for £1.8m and assuming that this was our borrower. Where did you get this info from? If it was the Rightmove listing then I'm not sure this tells us anything more than the property is Sold STC and the asking price was £1.8m. It doesn't tell us what offer was actually accepted. Edit: I have just noted the little c. But we don't know how close c1.8m is to 1.8m I'm still carrying out my DD post due to getting home late because apparently the A1 at scots corner has been converted to a car park and nobody told me I noted the Rightmove listing from others in the Pipeline Loans thread, but also came across the valuation note that the borrower has proposed to purchase the property for £2,200,000 which I have since added to my post. Hey Dude, no criticism of your DD! You're doing a great job. Now grab another brandy and carry on 
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Post by trevxe on Jul 25, 2016 21:55:09 GMT
I don't get this one. I'm OK with the property itself but for me the question is: Why? The borrower wants to start a portfolio of high end properties. Presumably it is a posh buy-to-let. There is no mention of any development opportunity here - it's a pure investment. There are a lot of properties available and it's a buyers market so why the rush for this one? Purchasing with a loan from Lendy is going to be an expensive way to buy, so the property has to be cheap to give a sensible return on investment otherwise just buy one of hundreds of other properties that are available where you have the time to get a standard rate BTL mortgage. If the property is particularly cheap with a huge discount being given by a desperate vendor then I might get it. But paragraph 16.7 in the valuation report says it is indicated that the applicant proposed to purchase the property for £2.2m. Not only is this is significantly above the valuation, it is also significantly above the asking price! So the question is: Why? I think there's something we don't know. I've got other worries This is a young inexperienced borrower, with ambitions above their current means. Currently, the borrower (a 36-year-old Nigerian), has little to no experience in property management, and their first apparent toe dip is in high-end +1m property. This is a borrower that lives in a 300k flat in Bromley... I know every property tycoon has to start somewhere, but from a SS investor POV, this seems risky to me... I share all these concerns. The security looks ok, but I'm just not convinced. I get the impression that the borrower likes the idea of having a portfolio of high-value properties, but doesn't actually have the means for it.
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dan83
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Post by dan83 on Jul 25, 2016 21:57:32 GMT
my gut is telling me to stay away, reading this has cemented my initial thoughts.
Thanks for the DD cooling dude.
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Post by harvey on Jul 25, 2016 22:07:01 GMT
I agree with the above posts. I think the guys here have pretty much nailed it based on what we have been told.
The property looks ok and looks like it could be quite decent loan security if SS were to have a first charge over it, but my question marks are about the borrower and her plan and motives and rather mixed and underwhelming background. Based on the admittedly very sketchy information we have been given it doesn't quite add up to me and that makes me feel twitchy.
If another financier is lined up and standing by to take us out then surely a sensible person would await that cheaper finance in the first place. It's not as though properties are flying off the shelves at the moment is it.
I think I might have a small nibble just to enable some further diversification out of old loans and with a note to myself to offload at an early stage but I don't feel like plunging into this one in a big way.
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Post by martin44 on Jul 25, 2016 22:12:29 GMT
The security indeed looks ok ish ... as long as the musician is not carrying out the work in his spare time then seems ok to me. |
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Post by Deleted on Jul 25, 2016 22:32:32 GMT
I don't get the plan here.
The property is totally complete and refined. So that's the end valuation for me.
The market is not going to go up anytime soon (at best will stay stable), so how would this lady pay the fees for bridging finance?
Is she really hopying to resell at short time distance with a profit (for having done what?).
I don't see this being a market where you can buy, wait and hope to resell higher... so I am out of this.
I see much much more value in some older loans (even on the SM now...)
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Post by moonshine on Jul 25, 2016 22:47:00 GMT
All good points, as usual. The cynic in me is suggesting that it is possible that the borrower has been rejected/can't obtain more common sense (and lower interest) loans, and Lendy have stepped in, seen the security and thought "times are thin, this woman doesn't know what she's doing, but the security is fine, so we'll offer the money..."
Which, if true, doesn't bode well for their risk DD. What do you think? Am I being too cynical, or merely realistic?
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ben
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Post by ben on Jul 25, 2016 23:02:24 GMT
I don't get the plan here. The property is totally complete and refined. So that's the end valuation for me. The market is not going to go up anytime soon (at best will stay stable), so how would this lady pay the fees for bridging finance? Is she really hopying to resell at short time distance with a profit (for having done what?). I don't see this being a market where you can buy, wait and hope to resell higher... so I am out of this. I see much much more value in some older loans (even on the SM now) I think she just thinks it be nice to have a large portfolio of property which I am sure we all would, however the logic of this escapes me. Even if she was renting it out once brought I doubt that would even cover the fees/interest to SS. There is no work to be done and she is not getting a bargin so unlikely be any significant growth in property prices, especially not to keep up with the amount SS charge. If she pays £2.2 million like the valuation reports says she must be mad paying that much more then the property is worth. If she pays £2.2 million she must have a £1 million in change hanging around she be far better of finding a property for that amount and having no mortage/loan to pay.
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Post by harvey on Jul 25, 2016 23:07:07 GMT
To me that's the rub. As long as the SS lawyers get the legals tied up nicely then in the longer term it shouldn't dent the platform but we don't really want to be getting into a situation where we have to go through the default process and repossess assets,we want Borrowers who can honour their contractual obligations in the first place and know what they are getting into. I'm not saying this borrower won't perform because we don't know but I wouldn't want to be holding the parcel on this one When The Music Stops because the reason for the loan all seems a bit vague and strange to me.
I could be wrong but I don't get the impression this borrower is a high roller, in fact I get the impression this borrower is a small roller who wants to be a high roller and taking out a 1 million pound plus bridging loan at very high interest at a time when there is considerable uncertainty and many predict a property value fall, would seem to be a risky proposition and a not very sound business plan and grand ideas founded on inexperience.
A nibble for me but definitely not a bite.
What do we predict on the pre fund level for this one then? It's bottoms up and I wouldn't be surprised if people get more or less what they asked for even if they ask for quite a lot. In fact I expect to see quite good availability on the secondary market almost from day one and that is why I am only going in for a nibble at this stage because I am confident that I could take a bite in the days that follow should my appetite increase.
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