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Post by excalibur on Jan 18, 2017 23:16:24 GMT
The two 5 bed houses being constructed are valued at £7.6m, i.e. £3.8m each.
Just a few doors down on B****m Road is a 6 bed house, including a covered swimming pool and what appears to be a much bigger front and rear garden, yet is currently for sale with a guide price of £3.75m.
How confident can we be with the valuation of this Wimbledon construction? I am especially keen to know this as the LTV comes in at 67.8%.
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mikes1531
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Post by mikes1531 on Jan 19, 2017 22:00:45 GMT
The two 5 bed houses being constructed are valued at £7.6m, i.e. £3.8m each. Just a few doors down on B****m Road is a 6 bed house, including a covered swimming pool and what appears to be a much bigger front and rear garden, yet is currently for sale with a guide price of £3.75m. How confident can we be with the valuation of this Wimbledon construction? I am especially keen to know this as the LTV comes in at 67.8%. A brand new house might be worth a bit more than an older one. But at this price level, a sale depends on finding a buyer that just happens to like this particular house and isn't too bothered exactly how it compares price-wise with other houses on the market -- within reason, of course. But finding the right buyer can take a while for a £3.8M house, and the longer it takes the more accrued interest there is to cover from the sale proceeds. I avoided this one when it first appeared because I wasn't convinced the houses would be easy to sell. I'm not too keen on second charges, and even less so on third charges. This one may work out fine, but I'm just not comfortable with it, so I'm giving it a miss.
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Jan 19, 2017 22:21:44 GMT
Good, interesting thread on VRs and their, shall we say, "flexibility", on the SS board under T** C****t - it's a good read, you'll enjoy it.
Carry on!
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09dolphin
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Post by 09dolphin on Jan 20, 2017 1:39:59 GMT
As brexit has already had a negative effect on the London property market I wouldn't even do the DD unless the LTV was much nearer 60%. My attitude could be a mistake but I believe this section of the market is due for a correction in the not too distant future, with the exception perhaps of a few areas in central London.
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Investboy
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Post by Investboy on Jan 25, 2017 10:20:53 GMT
I rarely skip loans on FS, usually putting in almost all a notional amount as I'm not a good in DD. But I stay clear of this one. Reasons : 3rd charge, high LTV, extreme high price, London property prices are overheated and going down.
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bfish
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Post by bfish on Jul 28, 2017 13:29:06 GMT
No update from FS since 18 Jan . . . and loan repayment PLUS interest should have been received 20 July - a week ago !
Afraid FS actually don't know what's happening! "Sometimes these things get a little overlooked" apparently - it's only a £350,000 loan !
New update promised either today or over the weekend...
A little worrying, may I say ?
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jcm9000
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Post by jcm9000 on Jul 29, 2017 9:04:56 GMT
Indeed, default it is.
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Post by doonio on Jul 30, 2017 10:28:36 GMT
What does it mean for us? Has anybody have experience with default on FS? How long the debt collection takes, did you get all the money(principal) back?
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oldgrumpy
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Post by oldgrumpy on Jul 30, 2017 10:41:02 GMT
No update from FS since 18 Jan . . . and loan repayment PLUS interest should have been received 20 July - a week ago ! Afraid FS actually don't know what's happening! "Sometimes these things get a little overlooked" apparently - it's only a £350,000 loan ! New update promised either today or over the weekend... A little worrying, may I say ? May 2016 "properties nearing completion" ... borrow more money. July 2017 "properties nearly completed" ... loan defaulted. I am pondering the linguistic subtleties in FS's update vocabulary which separate "nearing completion" from "nearly completed". Mmmm! (Not in it. 3rd charge? Pah!)
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Post by mrclondon on Jul 30, 2017 12:33:47 GMT
Original Loan (5043897082) Description May 2016:
Note: The purpose of this loan is for the borrower to take an early advance on his profit. It is not to complete the project which is financed by the bank.
Exit will be through the sale of the 2 properties.
Loan is to the borrower in his personal capacity and therefore no personal guarantee required.
Renewal Loan (2620469502) Update July 2017:
The borrower (being a company) has been placed into administration by the first charge holder.
I should be in the Richmond area at some point this week, and if I've time I'll make a detour to take a look at this development. I've never been in this loan, the 3rd charge and the "early advance on profit" were off-putting from the start, and post referendum I won't touch property in this SW London area popular with the French expat community.
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09dolphin
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Post by 09dolphin on Jul 30, 2017 13:09:45 GMT
I wasn't tempted by this loan as I'd read the opening comment re the valuation.
For those who were tempted FS don't have a good track record re recovering money lent. DOONIO it may take 12 months or more to recover your investment and you may get little interest. But at least you know any interest due comes before FS's charges .
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09dolphin
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Post by 09dolphin on Jul 30, 2017 13:13:27 GMT
I did consider lending but having read the comments here decided the LTV was too optimistic.
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rs
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Post by rs on Jul 30, 2017 14:22:50 GMT
I did consider lending but having read the comments here decided the LTV was too optimistic. how can the borrower change from personal capacity to company? Seems like FS made it easy for borrower.
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bfish
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Post by bfish on Jul 30, 2017 23:02:35 GMT
What does it mean for us? Has anybody have experience with default on FS? How long the debt collection takes, did you get all the money(principal) back? In this case I presume it will 'the Bank' who has appointed administrators, so we are not relying on FS to finish and sell the properties. However, as there is no evidence of any marketing (Rightmove/Primelocation/OnTheMarket etc) no doubt work remains - but they were financing that anyway !! I am relieved (sic?) that FS are still confident of 'full recovery' !
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Post by mrclondon on Aug 1, 2017 11:26:26 GMT
Somewhat mixed news from my visit to the development yesterday lunchtime. The good news is work continues (at least for now) despite the administration. The bad news is its not going to be easy (in my non-expert opinion) to achieve sale prices that cover all the debt. Location is 1.25 miles from Raynes Park station. There is a bus route that covers slightly over half that distance running every 12 minutes, and a Waitrose and Coop near the station. The properties are overlooking the local Rugby club's grounds, the far side of which is the A3, a motorway standard dual carriageway. The road out front is quite narrow, and match day traffic and PA noise nuisance is inevitable. The properties appear structurally complete, but the small front gardens are still a mess of earth, rubble and building supplies. The properties are separated by a fairly narrow shared drive sloping down to the lower ground level parking. There appears to be very narrow rear gardens. I talked to the site manager posing as a potential buyer, he seemed really cagey and evasive in most of his responses. He claimed they will be finished in 4-6 weeks but his body language suggested otherwise. I asked about layout - 4 or 5 bed ? (remember the loan details say 5 beds) After a bit of pressing I established that they are actually 4 bed - one bedroom on the lower ground floor that they prefer to call the cinema room, lounge/kitchen on the ground floor, 2 en-suite bedrooms on the first floor, and a bedroom in the loft they prefer to call the study. A builder sat outside munching his lunch, helpfully added that the loft room could if needs must be divided into two to make a 5th bedroom. Which feels somewhat at odds with what the Savills valuation report (pre-build) suggested. I asked which estate agent I should contact. The best I could achieve is a mumble that estate agencies have been approached. OK, maybe the administration of the borrower was on his mind, but if the properties are indeed 4-6 weeks off completion, now is the time they should be heavily marketing them. From what I could see from the outside these do not feel to be especially big properties, they share a driveway / entrance gate, the location whilst reasonable is a bit far from the station, and there will be disturbance on rugby match days. Looking at what other properties on this road have sold for, some as recently as 2016, and looking at the photos of said properties, the valuation of £3.8m each for these two properties is pure fantasy. Number 54 (which must be close by), a 5 bed sold for £1.7m in August 2015. In my non-expert opinion I would say these two properties will achieve £1.8m to £2m at best, and possibly as little as £1.6m. It feels an awful long stretch to reach the £2.6m each needed to cover the combined debt, and I can't see the 1st charge holder could justify waiting for offers at a level so far above the immediate area's ceiling. And two identicals coming on the market at the same time isn't going to make it any easier. There are relatively few for sale boards in the area, so priced correctly they should sell fairly quickly. My conclusion, hubris by the borrower, egged on by "valuers" who don't seem to inhabit the same planet as the rest of us. The grim reality is this 3rd charge loan is potentially a devastating result for FS lenders, and one which could possibly have been avoided if FS had commissioned their own independent valuation of the part built property before becoming involved. I hope I'm proved wrong.
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