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Post by bengilbert on Mar 22, 2017 22:01:34 GMT
As you'll see in the loan details, for the Putney loan being launched tonight, the borrower is one of the directors at Broadoak - not me, but Jamie, Broadoak MD, who acquired the option to purchase the site and is working with an experienced developer on planning and building out the project.
For obvious reasons, this is not a Broadoak loan, and all the due diligence, monitoring and managing of the loan is being done by MoneyThing.
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cooling_dude
Bye Bye's for the PPI
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Post by cooling_dude on Mar 22, 2017 22:45:16 GMT
I'd love to know the turmoil the MODs are currently going through trying to work out if they should moderate your OP or not  |
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Post by mrclondon on Mar 23, 2017 1:57:42 GMT
[mod hat off]
I need to ponder this a bit more, but my initial reaction is the 10.5% rate is too low to reflect the current risk, based on the planning permission for a single property.
The stated GDV's for the alternate 3, 4 or 6 property schemes seem realistic, though its should be noted that Putney - Roehampton - Richmond are favoured areas for the huge French expat community which is expected to reduce markedly over the next 5 years or so.
My problem is with the GDV for the single property scheme. The valuation report states (at the bottom of page 9) that the marketability will be impaired by no street presence and being overlooked by social housing, then (on page 10) discusses the issue in more detail saying no properties over 3000 sq ft have sold on G****** Av since 2005, and the southern end where this plot is located is predominately social housing. Building a £2.5m 4,500 sq ft house in that particular location seems to be a stretch too far in the area of London that had the weakest house price growth last year, and is widely expected to remain a buyers market over the next few years.
Page 7 of the valuation report states the local authority's preference is for a single property.
With planning permission for a 3, 4 or 6 property scheme, 10.5% or 11% yield to lenders would seem not unreasonable, but the exit strategy for a single property looks rather precarious to my mind, and as such I consider 10.5% based on the current planning permission to be poor value. The proposed strategy of persuading the local authority to go far a higher density scheme is obviously sensible, but in the meantime the purchase price of the site (over £1.3m) doesn't seem that far off what a single (more sensibly sized) single property on that particular plot would achieve, and hence the suggested LTV of 70% is perhaps overstating the land value if restricted to a single property.
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Post by mrclondon on Mar 23, 2017 2:20:31 GMT
One further observation regarding the valuation report, whilst the comparables on pages 7and 8 are (with 1 exception) all from June to December 2016, the market commentary on page 9 dates from early 2016 (note the phrase "we expect that the first half of 2016 will see" ). To be using the same boilerplate text 12 months later, with zero commentary on brexit (and the subsequent interest rate cut) rather glosses over the very real issues that brexit will bring to this area of London, and borders on the professionally negligent by this particular suveryor IMO. I should add most of the market commentary section is discussing retail premises, and is simply irrelevant to the property being valued. LATE EDIT: Please see my later post which shows potentially 3 of the sale dates on the listed comparables are wrong and were actually sold in June 2015, October 2015, and March 2016 not June 2016, October 2016 and August 2016 respectively. |
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Post by bracknellboy on Mar 23, 2017 7:39:20 GMT
I'd love to know the turmoil the MODs are currently going through trying to work out if they should moderate your OP or not None - we are in state of complete and total calm.
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sirius
Member of DD Central
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Post by sirius on Mar 23, 2017 8:15:19 GMT
I would have thought anyone from "Broadoak" especially would have been aware that this scheme will appeal to few, even with the most cursory of glances. I am out!
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mtb9
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Post by mtb9 on Mar 23, 2017 8:23:21 GMT
I can't help but think that if SS had put out this loan with these particulars and at a 10.5% rate they would be taking a pasting but as it is from MT there is not much criticism about the particulars or the rate. (Previous posts this morning excluded). I should state that I'm invested in both platforms and have no preference of one platform over the other.
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Post by jackpease on Mar 23, 2017 8:32:53 GMT
I can't help but think that if SS had put out this loan with these particulars and at a 10.5% rate they would be taking a pasting but as it is from MT there is not much criticism about the particulars or the rate. (Previous posts this morning excluded). I should state that I'm invested in both platforms and have no preference of one platform over the other. Small, young, default-free platforms that can afford to indulge our every whim can do no wrong, platforms mature enough to suffer defaults and too big to answer the myriad of demands for information can do no right. Moot point whether a platform has a duty to a borrower to get the loan away at the lowest rate possible or a duty to the lender to stubbornly stick to the magic 12%... For Moneything, which in recent months has become virtually unusable due to lack of deal flow, sticking to 12% might seem to be a poor strategy if the platform is to grow and make a profit (a platform that doesn't make a profit is a risky venture to invest through). Jack P
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adrianc
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Post by adrianc on Mar 23, 2017 8:59:41 GMT
I'd love to know the turmoil the MODs are currently going through trying to work out if they should moderate your OP or not None - we are in state of complete and total calm. Even though the borrower is clearly named...?
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keystone
Member of DD Central
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Post by keystone on Mar 23, 2017 10:13:20 GMT
None - we are in state of complete and total calm. Even though the borrower is clearly named...? and who he works for! 
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mickj
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Post by mickj on Mar 23, 2017 10:17:33 GMT
It will certainly play havoc with my spreadsheet, so used to nice round numbers.
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registerme
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Post by registerme on Mar 23, 2017 10:45:14 GMT
None - we are in state of complete and total calm. Even though the borrower is clearly named...?  . I think, for now, we are minded to leave things as is. If we come to a different / more concrete assessment, well, you know what we'll (have to) do.....
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hazellend
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Post by hazellend on Mar 23, 2017 10:45:30 GMT
So the land was purchased for 1.367 million.
If that is the case, what is the borrower thinking for not snapping the offer of 1.65 million they have had already? That would be at least 300k profit for no work or risk?
If planning permission is only obtained for single dwelling is there really that much more profit to be had?
I guess I'll go in on this one. Although it's not directly connected to broadoak, the reputational risk is similar to an actual broadoak loan going very bad, so that makes it safer in my opinion.
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oldgrumpy
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Post by oldgrumpy on Mar 23, 2017 11:01:19 GMT
MT haven't got their 5% of "skin in the game" as Broadoak would do.
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ozboy
Member of DD Central
Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Mar 23, 2017 11:52:49 GMT
One further observation regarding the valuation report, whilst the comparables on page 8 are (with 1 exception) all from June to December 2016, the market commentary on page 9 dates from early 2016 (note the phrase "we expect that the first half of 2016 will see" ). To be using the same boilerplate text 12 months later, with zero commentary on brexit (and the subsequent interest rate cut) rather glosses over the very real issues that brexit will bring to this area of London, and borders on the professionally negligent by this particular suveryor IMO. I should add most of the market commentary section is discussing retail premises, and is simply irrelevant to the property being valued. Good to see that this ongoing and increasingly worrisome issue may be gaining traction, finally, thanks mrclondon. As per my favourite Hobby Horse on here, if a "Professional" "Valuation" is not fit for purpose then Complain to RICS, they'll have no choice but to clean up this ongoing "Valuations" farce, but enough Investors need to lodge criticisms.
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. I think, for now, we are minded to leave things as is. If we come to a different / more concrete assessment, well, you know what we'll (have to) do.....
