Post by adrian77 on Jun 8, 2018 3:57:49 GMT
Latest poll results early hours this morning ref chance of completion today
0% 19 votes = 47.5%
25% 9 votes = 22.5%
50% 5 votes = 12.5%
75% 4 votes = 10%
100% 3 votes = 7.5%
i.e. out of 40 vote 92.5% did not have complete confidence that this would complete as FS told us - well if it doesn't I will never believe a single damn thing FS tell us
I have done a bit of digging on this one and this is how the situation appears to me
1) this borrower has taken over another FS loan - seems to have a loan facility of £945K of which £848K has been drawn down. Development seems to be running late with first repayment due late this month and I sure can't see how this is going to be repaid on time. I may be wrong here but that is how it looks to me - I could ask FS but that will be a complete waste of time as I will be told to expect an update in a couple of weeks...The valuation for this development looks very high to me and I am not convinced this one will be profitable even if it sells before the loan repayments are due which it won't. For the record he appears to have taken 8 months to go from his buying offer to completion so maybe that one wasn't "all systems go"
2) This loan was taken out with company "nice legs" which seems to have existed only to get this other loan and is now dissolved (voluntary) although there is still the outstanding charge
3) This director has another company "marty-arty" which is under administration
and also company "marty - money" which has been served with a compulsory strike off and takes effect from 12th June 18
4) The director's applicant company is "posh home capital" this company has 7 outstanding charges of which the cinema is one. There seem to be 5 others against 5 properties and one in 2015 for a general full and floating charge over the company which incudes all and future assets. All these other charges are for a major UK bank. Well from a legal viewpoint I just don't know how this relates to FS's first charge?
5) This cinema looks vastly overvalued to me - the FS valuation is a residual one which personally I never use when I price my investment properties. Whitehave was also a residual valuation of £350K and it is currently unsold at £150K. The end valuation looks high to me, there is no allowance for S106 although the build costs look reasonable if I am using the correct footprint. The cinema was owned by a professional property company but they (and several others) sold it and the question to me is why? I would appreciate a comment from somebody better qualified to say but I would value this site at £1m before expenses. If I am correct then the LTV is 200%! Ridiculous you say - look at the final selling price and valuation for NI wind turbine ,Wimbledon, Whitehaven etc valuation I say!
However not sure what this chap's orginal plan was - was it
a) to develop the site i.e. borrow another £7m or so - no chance!
b) to flip it after paying for planning - for this to be profitable he would need to buy well under true valuation to cover all expenses and interest at 2.4% per month and immediately resell - great fun but dangerous!
c) something else which is involves some lateral thinking which I can't think of (or post on this forum) .
I really think we should have been told about this plot the chap took over but as I see it the situation is
- this chap has damn all money: £983 cash, £66K nbv with just under 900K long term creditors ( that figures rings a bell) ; these figures are from last years unaudited accounts
- he has 2 other companies in administration one of which has a charge on it
- he has another major FS loan which looks very unlikely to repay on time
- he has no means whatsoever in repaying the cinema plot on time - if he completes today he will be a bit late but not the end of the world. If there is no chance of completing very quicky
then goodness know what will happen but I don't think it will be pretty!
- the full and floating charge for the applicant company is interesting
Sorry if I have been a bit exercised over this one but to be honest either I have misunderstood it or FS have been incredibly lax in doing proper DD on this one. Hopefully the former for the sake of my nibble but more importantly those investors with mega sums in this one. I note there are 2 x £300K investors in this one who may or may not be related - if this was my money I would already be speaking to my solicitor about this one.
I am wasting far too much of my valuable time doing DD which FS seem incapable or unwilling to do. My portfolio is now down to just over £1K and the sooner it is zero the better.
Be interesting to see if I am talking rubbish (won't be the first time) and whether this one completes today. The downstairs shop could always be a barber's shop as ideal for haircuts. Anybody guess how I voted in my fun poll?
I thank you
0% 19 votes = 47.5%
25% 9 votes = 22.5%
50% 5 votes = 12.5%
75% 4 votes = 10%
100% 3 votes = 7.5%
i.e. out of 40 vote 92.5% did not have complete confidence that this would complete as FS told us - well if it doesn't I will never believe a single damn thing FS tell us
I have done a bit of digging on this one and this is how the situation appears to me
1) this borrower has taken over another FS loan - seems to have a loan facility of £945K of which £848K has been drawn down. Development seems to be running late with first repayment due late this month and I sure can't see how this is going to be repaid on time. I may be wrong here but that is how it looks to me - I could ask FS but that will be a complete waste of time as I will be told to expect an update in a couple of weeks...The valuation for this development looks very high to me and I am not convinced this one will be profitable even if it sells before the loan repayments are due which it won't. For the record he appears to have taken 8 months to go from his buying offer to completion so maybe that one wasn't "all systems go"
2) This loan was taken out with company "nice legs" which seems to have existed only to get this other loan and is now dissolved (voluntary) although there is still the outstanding charge
3) This director has another company "marty-arty" which is under administration
and also company "marty - money" which has been served with a compulsory strike off and takes effect from 12th June 18
4) The director's applicant company is "posh home capital" this company has 7 outstanding charges of which the cinema is one. There seem to be 5 others against 5 properties and one in 2015 for a general full and floating charge over the company which incudes all and future assets. All these other charges are for a major UK bank. Well from a legal viewpoint I just don't know how this relates to FS's first charge?
5) This cinema looks vastly overvalued to me - the FS valuation is a residual one which personally I never use when I price my investment properties. Whitehave was also a residual valuation of £350K and it is currently unsold at £150K. The end valuation looks high to me, there is no allowance for S106 although the build costs look reasonable if I am using the correct footprint. The cinema was owned by a professional property company but they (and several others) sold it and the question to me is why? I would appreciate a comment from somebody better qualified to say but I would value this site at £1m before expenses. If I am correct then the LTV is 200%! Ridiculous you say - look at the final selling price and valuation for NI wind turbine ,Wimbledon, Whitehaven etc valuation I say!
However not sure what this chap's orginal plan was - was it
a) to develop the site i.e. borrow another £7m or so - no chance!
b) to flip it after paying for planning - for this to be profitable he would need to buy well under true valuation to cover all expenses and interest at 2.4% per month and immediately resell - great fun but dangerous!
c) something else which is involves some lateral thinking which I can't think of (or post on this forum) .
I really think we should have been told about this plot the chap took over but as I see it the situation is
- this chap has damn all money: £983 cash, £66K nbv with just under 900K long term creditors ( that figures rings a bell) ; these figures are from last years unaudited accounts
- he has 2 other companies in administration one of which has a charge on it
- he has another major FS loan which looks very unlikely to repay on time
- he has no means whatsoever in repaying the cinema plot on time - if he completes today he will be a bit late but not the end of the world. If there is no chance of completing very quicky
then goodness know what will happen but I don't think it will be pretty!
- the full and floating charge for the applicant company is interesting
Sorry if I have been a bit exercised over this one but to be honest either I have misunderstood it or FS have been incredibly lax in doing proper DD on this one. Hopefully the former for the sake of my nibble but more importantly those investors with mega sums in this one. I note there are 2 x £300K investors in this one who may or may not be related - if this was my money I would already be speaking to my solicitor about this one.
I am wasting far too much of my valuable time doing DD which FS seem incapable or unwilling to do. My portfolio is now down to just over £1K and the sooner it is zero the better.
Be interesting to see if I am talking rubbish (won't be the first time) and whether this one completes today. The downstairs shop could always be a barber's shop as ideal for haircuts. Anybody guess how I voted in my fun poll?
I thank you
