ozboy
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Post by ozboy on Apr 27, 2017 15:01:56 GMT
I am nowhere good at DD on property, but from the VR:- Seems the GDV per house @ £750K to £900K is reasonable/about right. I note there's zero figures under Contingency Item - what if something goes wrong/ish? Developers Profit @ 10% is used - all the Developers I know don't get out of bed for less than 30%! I'm sure others have better insights to add.  |
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Liz
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Post by Liz on Apr 27, 2017 15:17:11 GMT
I am nowhere good at DD on property, but from the VR:- Seems the GDV per house @ £750K to £900K is reasonable/about right. I note there's zero figures under Contingency Item - what if something goes wrong/ish? Developers Profit @ 10% is used - all the Developers I know don't get out of bed for less than 30%! I'm sure others have better insights to add. Fil yer boots Oz. 
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ozboy
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Post by ozboy on Apr 27, 2017 15:22:44 GMT
That's exactly the sort of encouragement I need, I am SO easily led, a sheeple really!!  PS - I haven't yet developed the dark art (I haven't a clue tbh) of uncovering Connected Borrowers with possibly Multiple Loans On Other Platforms As Well As This One, anyone know if this geezer/geezerette has Other Loans? |
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sirius
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Post by sirius on Apr 27, 2017 16:56:18 GMT
The valuation is based on PP being obtained, not what the plot is worth as it stands. I cannot believe the borrower paid/ will pay more than 500k for the property, (as usual, that rather important snippet of information has not been released). Furthermore, what does the borrower require the money for now? Is it to purchase the property? It is certainly not stated in the details.
The valuation appears to me to have been made up, especially given the dubious costings.
A big no from me then.
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ozboy
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Post by ozboy on Apr 27, 2017 17:02:15 GMT
Oh no sirius, I now feel a swerve coming on!
Take your points, would only say that it's a high probability, not possibility, that PP will be Granted, which of course immediately increases the value.
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sirius
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Post by sirius on Apr 27, 2017 17:31:19 GMT
Likewise, I too 'feel' that PP will be granted. However, it is still only 'hope' value, not a certainty. Also, as you stated......no contingency and 10% profit??!!
Also, what about the Interest Costs/Infrastructure/Buildings Demolition/External works figure of 200k? FS fees are likely to swallow most of that, alone.
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michaelc
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Post by michaelc on Apr 27, 2017 18:18:38 GMT
The valuation is based on PP being obtained, not what the plot is worth as it stands. I cannot believe the borrower paid/ will pay more than 500k for the property, (as usual, that rather important snippet of information has not been released). Furthermore, what does the borrower require the money for now? Is it to purchase the property? It is certainly not stated in the details. The valuation appears to me to have been made up, especially given the dubious costings. A big no from me then. This is just what I was thinking - I came to the forum ready to create a new post but glad I found this. What I don't really understand is why? Why does fundingsecure 's valuer calculate the land value based on a hypothetical. I mean the RICs guys are supposed to be professionals how can their code of conduct allow them to produce a valuation based on something that might or might not happen? If they do consider permission likely (as they do) they surely should still provide an estimate based on the case that planning is denied. Both these valuations should then be contained in the top level web page description as well as in the detail of the pdf. Second, why is there no information as Sirius says about how much has been paid or has been agreed to be paid. If the land has already sold then a figure is known. If not, then FS should release the funds direct to the vendor and should be aware of how much needs to be paid for that land. Why don't they provide that information? Surely transparency drives confidence and thus long term platform commitment ? Feels to me that this issue deserves its own thread which FS will hopefully answer.
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ozboy
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Post by ozboy on Apr 27, 2017 18:48:55 GMT
"............ the RICs guys are supposed to be professionals how can their code of conduct allow them to produce a valuation based on something that might or might not happen?"and "...why is there no information as Sirius says about how much has been paid or has been agreed to be paid. If the land has already sold then a figure is known."A sight for my sore eyes folks, keep it up - Challenge, Challenge, Challenge, Query, Query, Query!! And to be fair, they ALL play this game to varying degrees, some being 10th Dan Black Belts who I'm sure are giving Lessons to other P2Ps.  Together let's insist on reasonably accurate Valuations, reasonably correct LTVs, and NO omissions of material facts. I'm now going for another of my many lie downs.
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fp
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Post by fp on Apr 27, 2017 20:41:08 GMT
I am nowhere good at DD on property, but from the VR:- Seems the GDV per house @ £750K to £900K is reasonable/about right. I note there's zero figures under Contingency Item - what if something goes wrong/ish? Developers Profit @ 10% is used - all the Developers I know don't get out of bed for less than 30%! I'm sure others have better insights to add. My main problem with this is the value of the property should planning permission not be forthcoming, as there is a lot of hope value attached, without planning the property will most certainly be worth less than the outstanding loan amount at term. I'm sure there will be a horse with better form in the next race.
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ozboy
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Post by ozboy on Apr 27, 2017 20:57:31 GMT
Forgive me if it's a stoopid question, but in cases like this, why aren't there Two Tranches?
First Tranche/Loan of, say 60 - 70% based on the reasonable, fair Value of the undeveloped land now, and then the Borrower can have their desert with the Second Tranche/Loan based on say 60 - 70% of the reasonable, fair uplift in Value after PP is obtained? That would afford us and the Platform much better protection?
I'm still learning folks so go easy on me if this approach or similar is already considered the usual way to structure a "Before PP" Loan such as this.
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mikes1531
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Post by mikes1531 on Apr 27, 2017 21:14:34 GMT
What I don't really understand is why? Why does fundingsecure 's valuer calculate the land value based on a hypothetical. I mean the RICs guys are supposed to be professionals how can their code of conduct allow them to produce a valuation based on something that might or might not happen? If they do consider permission likely (as they do) they surely should still provide an estimate based on the case that planning is denied. Both these valuations should then be contained in the top level web page description as well as in the detail of the pdf. ISTM that the simple answer to the above question is "because they do what they're asked/instructed to do". In the standard info at the back of the VR is the mention of things like "Existing Use Value", and if the valuer had been paid to provide that then I expect they would have. There's also mention of 'Market Rent'. I don't know what rent the garage is paying now. The VR says the owner is seeking rent of £65k/yr, but I haven't a clue whether that's realistic or not. If it was, the value of the property might still be enough to secure the loan if the PP was refused. But the valuer didn't provide that either.
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mikes1531
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Post by mikes1531 on Apr 27, 2017 21:17:16 GMT
Developers Profit @ 10% is used - all the Developers I know don't get out of bed for less than 30%! A lot depends on what these percentages are applied to. The VR applied the 10% to the GDV. If the profit amount was looked at as a proportion of the building costs, it would have been a lot higher.
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ozboy
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Post by ozboy on Apr 27, 2017 21:46:14 GMT
Developers Profit @ 10% is used - all the Developers I know don't get out of bed for less than 30%! A lot depends on what these percentages are applied to. The VR applied the 10% to the GDV. If the profit amount was looked at as a proportion of the building costs, it would have been a lot higher. You have unmasked my basic failure to grasp even the simplest concepts of figure work mikes1531!
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Post by zeverare on Apr 28, 2017 9:38:03 GMT
so an old car garage without soil contamination: no abandoned fuel tanks, no leakage from oil changes?
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09dolphin
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Post by 09dolphin on May 2, 2017 10:22:42 GMT
I do wish that FS would provide valuations based on the here and now as well as the potential valuation assuming that planning permission is granted.
In this loan the valuation seems to be based on planning permission having been granted rather than the actual valuation. I suspect that the actual LTV is nearer to 95% without planning permission.
I could be wrong and would welcome anyone to correct my reading of the valuation report.
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