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Post by scoobydoo on Sept 14, 2016 12:54:41 GMT
Nice work, cooling_dude.
Just want to point out the typo on your subject title. Go Live should be 15/09 not 14/09
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mikes1531
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Post by mikes1531 on Sept 14, 2016 13:58:59 GMT
If PBL133 had a £2,400 maximum allocation for a £1.779M loan, then what should we expect as a maximum allocation for PBL132's £2.334M loan?
A strictly proportional increase would suggest a maximum of £3,150. But if we presume that many of the investors who asked for £2,400 or less of PBL133 won't want more of PBL132, then perhaps £4k is a more likely maximum.
Any thoughts?
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jonah
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Post by jonah on Sept 14, 2016 20:07:12 GMT
As the 'JV' appears to be the main bone of contention with this proposal; the details of which are clearly spelt out in the loan's overview, leaving neither the need to be a forumite or one to do due diligence on a personal level to discover that potential pitfall, it will be interesting to see what sort of take-up there is. Or whether a large percentage of members blindly throw their money into anything that has a lengthy term remaining. I didn't get it when I first read it and nothing I've seen since has helped. I fully expect that this will be sold out, but I won't be taking a slice as it currently stands.
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mikes1531
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Post by mikes1531 on Sept 14, 2016 20:48:16 GMT
As the 'JV' appears to be the main bone of contention with this proposal; the details of which are clearly spelt out in the loan's overview, leaving neither the need to be a forumite or one to do due diligence on a personal level to discover that potential pitfall, it will be interesting to see what sort of take-up there is. Or whether a large percentage of members blindly throw their money into anything that has a lengthy term remaining. I didn't get it when I first read it and nothing I've seen since has helped. I fully expect that this will be sold out, but I won't be taking a slice as it currently stands. I may have it all wrong, but my interpretation is... The seller has agreed to sell the property for £1M less than its current ('PP hoped for') value in return for a share of the value gain if the PP comes through. So if all goes well and the PP is obtained and the value of the property increases as a result, then they'll get part of the gain as well as the £1M of the price that they've forgone. As a result, they'd be better off than they'd have been if they sold the property outright at the 'PP hoped for' value. Of course, if the PP doesn't come through then the price could drop to a 'no hope' value and they'd be worse off. But as long as the no-hope value still exceeds the amount of the loan they'd get something, and if the borrower were to default SS could still sell the property at the no-hope price and have enough to cover the whole loan. So the uncertainty/risk is whether a sale at the no-hope value would produce enough proceeds to repay the loan. Any thoughts as to the likelihood I've got the right interpretation? Any guesses as to what the 'no-hope' value might be? Would savingstream care to enlighten us?
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am
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Post by am on Sept 14, 2016 21:00:41 GMT
As the 'JV' appears to be the main bone of contention with this proposal; the details of which are clearly spelt out in the loan's overview, leaving neither the need to be a forumite or one to do due diligence on a personal level to discover that potential pitfall, it will be interesting to see what sort of take-up there is. Or whether a large percentage of members blindly throw their money into anything that has a lengthy term remaining. I didn't get it when I first read it and nothing I've seen since has helped. I fully expect that this will be sold out, but I won't be taking a slice as it currently stands. We really could do with savingstream (if not prevented by commercial confidentiality) presenting the terms of the deal between the vendor and the borrower. Hypothesis 1: the vendor retains equity in the property, and so our security is only the proportion of the property owned by the borrower, giving a 100% LTV. Hypothesis 2: the vendor is selling the property for £2.4m AND equity in the SPV with a NAV of £1m, in which case the LTV is about 70%, BUT, contrary to what is stated in the loan details we would NOT be lending the whole purchase price. Hypothesis 3: the vendor has entered into a contract with the SPV wherein he is selling the property outright for £2.4m and a share of the proceeds of the development. This is the closest match to what we are told, and our first charge probably ranks ahead of the vendor's entitlements. (How does this interact with an exit via a refinance?) Hypothesis 4: (I don't take this one seriously) the borrower has paid £2.4m for an option to purchase the property for £1m (with an uplift clause). LTV 0%, unless the option is transferable, and is our security. Perhaps it's clear to people in the property world what the deal is, but it's not clear to me. I would have thought that SS must know the terms, and it wouldn't have been difficult to explain them to us. (At the worst they could have, with the permission of the borrower and vendor, a redacted copy of the contract.)
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fp
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Post by fp on Sept 14, 2016 21:07:36 GMT
I haven't had a really good read through, but based on the bits i've picked up glancing through, it sounds like the vendor took a dip in price in exchange for an uplift clause, in real terms, the best scenario for the buyer could be for it not to get PP, which would leave him sat on a nice cheap new house!
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am
Posts: 1,495
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Post by am on Sept 14, 2016 21:13:02 GMT
I didn't get it when I first read it and nothing I've seen since has helped. I fully expect that this will be sold out, but I won't be taking a slice as it currently stands. I may have it all wrong, but my interpretation is... The seller has agreed to sell the property for £1M less than its current ('PP hoped for') value in return for a share of the value gain if the PP comes through. So if all goes well and the PP is obtained and the value of the property increases as a result, then they'll get part of the gain as well as the £1M of the price that they've forgone. As a result, they'd be better off than they'd have been if they sold the property outright at the 'PP hoped for' value. Of course, if the PP doesn't come through then the price could drop to a 'no hope' value and they'd be worse off. But as long as the no-hope value still exceeds the amount of the loan they'd get something, and if the borrower were to default SS could still sell the property at the no-hope price and have enough to cover the whole loan. So the uncertainty/risk is whether a sale at the no-hope value would produce enough proceeds to repay the loan. Any thoughts as to the likelihood I've got the right interpretation? Any guesses as to what the 'no-hope' value might be? Would savingstream care to enlighten us? The info we are provided states "Our security has been valued without any 'hope value'", so nominally the value without planning permission is between £3.4m (the market value implied by the sale price, but the vendor could have discounted the price in return for a share in the project uplift - meaning he takes a loss if planning permission isn't granted) and £3.9m (the value given in the VR). (I don't have any idea how to value properties like this, and suspect that a forced sale could entail a deep discount if a ready purchaser can't be found.) I wondering why this transaction wasn't structured as an option - the borrower could have offered £100,000 for the exclusive option to purchase the property for, say, £5m, after planning permission is obtained. Unless the vendor has a reason for wanting cash now, rather than later.
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am
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Post by am on Sept 14, 2016 21:15:22 GMT
I haven't had a really good read through, but based on the bits i've picked up glancing through, it sounds like the vendor took a dip in price in exchange for an uplift clause, in real terms, the best scenario for the buyer could be for it not to get PP, which would leave him sat on a nice cheap new house! Hopefully, for the vendor's sake, there's more profit in gaining planning permission and developing the site than in selling the house as is.
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Post by savingstream on Sept 14, 2016 21:44:20 GMT
I didn't get it when I first read it and nothing I've seen since has helped. I fully expect that this will be sold out, but I won't be taking a slice as it currently stands. I may have it all wrong, but my interpretation is... The seller has agreed to sell the property for £1M less than its current ('PP hoped for') value in return for a share of the value gain if the PP comes through. So if all goes well and the PP is obtained and the value of the property increases as a result, then they'll get part of the gain as well as the £1M of the price that they've forgone. As a result, they'd be better off than they'd have been if they sold the property outright at the 'PP hoped for' value. Of course, if the PP doesn't come through then the price could drop to a 'no hope' value and they'd be worse off. But as long as the no-hope value still exceeds the amount of the loan they'd get something, and if the borrower were to default SS could still sell the property at the no-hope price and have enough to cover the whole loan. So the uncertainty/risk is whether a sale at the no-hope value would produce enough proceeds to repay the loan. Any thoughts as to the likelihood I've got the right interpretation? Any guesses as to what the 'no-hope' value might be? Would savingstream care to enlighten us? There is no ' hoped for' value in this transaction. We are lending against the value as a house, with land in a good area. IF the planning comes in, it will assist our borrower refinance and exit but if not within our timescale, there is sufficient equity and interest from various parties to exit cleanly and on time.
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fp
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Post by fp on Sept 15, 2016 11:46:15 GMT
This is now live
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GeorgeT
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Post by GeorgeT on Jul 25, 2017 14:49:20 GMT
Fantastic news. And PBL66 and PBL67 also repaid today! Nearly £3.5 million of repayments in 1 day.... and the SM is already catching fire on the back of it.  Just had 4 sales. |
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