ptr120
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Post by ptr120 on Sept 11, 2016 18:19:07 GMT
That is dissapointing. I'd really like to see the valuation doc that ablrate have used to calculate the LTV. I know that he is supposed to be a HNWI, but so was Rupert Murdoch!
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Post by ablrate on Sept 13, 2016 9:08:29 GMT
Hi All
A response from the Borrower:
During my 30+ years in modular buildings the industry as a whole has always had a problem trying to obtain 3rd party valuations on modular buildings, but when evaluating you have to factor in issues such as:
- The main infrastructure of the modules are stainless steel that has a guaranteed life over 60 years.
- A modular building can be used as suitable mortgage security if configured correctly on site.
- The shell of the module can be enhanced/upgraded to increase the buildings efficiency re heating etc.
- The finish/internal fit out of each module can be enhanced significantly.
- Extras can be added to the base modules, ie air conditioning, triple glazing, etc.
All of the above add significant value to the base value of a any module whether it is new or second hand.
In the case of the units that make up the 10 bay modular office block in question I can state that all the points detailed above are included in the building and that it is a top of range block . Similar buildings we have provided for external customers over the past few years have ranged in sales value (to them) from £40,000 to £75,000 per module. Please note I have over 30 years experience in the modular buildings sector and that the prices that I have quoted over the past few years relate to a wide range of customers so believe it is a true reflection of the current market place and a fair valuation of the modules in question.
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ptr120
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Post by ptr120 on Sept 13, 2016 12:42:26 GMT
So the only valuation of the assets upon which this loan is secured is one that has been provided by the borrower who has manufacturered them himself and also leased them to himself?
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stevio
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Post by stevio on Sept 13, 2016 13:40:48 GMT
If its difficult to value the units, then generally means that buyers would value these over a large range. Even the new sales value varies from 40k-75k.
It looks like the valuation was based on the new sales value of maybe 60k per unit
However these would be 2nd hand units, that would need to be moved from one site to another, so who knows what they might be worth
The problem is that the LTV has always been an issue with this loan as the loan could have been up to 500k, which even with the new sales price made the LTV to 83%
Factor in the used asset value, lets say a conservative 40k and the LTV is up near 95% and even higher depending on what you believe the value to actually be
This compared to 45% LTV of the 'other' portacabin loan
I think here we the best we can hope for is the Director guarantees, cross guarantee from parent company
Mute point now as loan finished
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