am
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Post by am on May 30, 2017 14:26:33 GMT
9 months, 70% LTV, 8%, sensible exit strategy (sell as residential property)
On the market for £425,000 (same figure as the valuation), reduced (according to the VR) from £450,000.
There is an application for change of use. Without this there would be planning risk involved, as the valuation as a commercial property is only £150,000, but permission was granted on the 13th April.
The property is on a large plot, as well as being a fairly large property, but I didn't see any obvious development opportunities, due to the constraints of a narrow frontage. However the estate agent does refer to development potential, so there may be some hope value in the price. This may offset the discount required to cover the refurbishment costs that I was expecting to be present. The actual valuation is a residual with such a discount (section 17.9 of the VR), but there seems to be an error therein as the numbers don't up - either the GDV should be £50,000 greater, the valuation £50,000 less, or the refurb costs plus profits £50,000 smaller.
The property has a section with an asbestos roof.
It's an odd property, and the valuation may be more uncertain that usual for residential properties. The estate agent doesn't have floor plans, which is a handicap in considering reconfiguration alternatives and costs. (Not that I'm qualified to do so.)
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Post by df on May 30, 2017 15:49:22 GMT
9 months, 70% LTV, 8%, sensible exit strategy (sell as residential property) On the market for £425,000 (same figure as the valuation), reduced (according to the VR) from £450,000. There is an application for change of use. Without this there would be planning risk involved, as the valuation as a commercial property is only £150,000, but permission was granted on the 13th April. The property is on a large plot, as well as being a fairly large property, but I didn't see any obvious development opportunities, due to the constraints of a narrow frontage. However the estate agent does refer to development potential, so there may be some hope value in the price. This may offset the discount required to cover the refurbishment costs that I was expecting to be present. The actual valuation is a residual with such a discount (section 17.9 of the VR), but there seems to be an error therein as the numbers don't up - either the GDV should be £50,000 greater, the valuation £50,000 less, or the refurb costs plus profits £50,000 smaller. The property has a section with an asbestos roof. It's an odd property, and the valuation may be more uncertain that usual for residential properties. The estate agent doesn't have floor plans, which is a handicap in considering reconfiguration alternatives and costs. (Not that I'm qualified to do so.) There might be development potential, but from description it doesn't sound like they intend to do it - "The loan funds are to be used to fully repay an existing lender and to assist with the purchase of another property...The borrower intends to sell the property and repay the loan with the proceeds. It is currently being marketed for sale on well know websites".
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am
Posts: 1,495
Likes: 601
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Post by am on May 30, 2017 16:11:58 GMT
9 months, 70% LTV, 8%, sensible exit strategy (sell as residential property) On the market for £425,000 (same figure as the valuation), reduced (according to the VR) from £450,000. There is an application for change of use. Without this there would be planning risk involved, as the valuation as a commercial property is only £150,000, but permission was granted on the 13th April. The property is on a large plot, as well as being a fairly large property, but I didn't see any obvious development opportunities, due to the constraints of a narrow frontage. However the estate agent does refer to development potential, so there may be some hope value in the price. This may offset the discount required to cover the refurbishment costs that I was expecting to be present. The actual valuation is a residual with such a discount (section 17.9 of the VR), but there seems to be an error therein as the numbers don't up - either the GDV should be £50,000 greater, the valuation £50,000 less, or the refurb costs plus profits £50,000 smaller. The property has a section with an asbestos roof. It's an odd property, and the valuation may be more uncertain that usual for residential properties. The estate agent doesn't have floor plans, which is a handicap in considering reconfiguration alternatives and costs. (Not that I'm qualified to do so.) There might be development potential, but from description it doesn't sound like they intend to do it - "The loan funds are to be used to fully repay an existing lender and to assist with the purchase of another property...The borrower intends to sell the property and repay the loan with the proceeds. It is currently being marketed for sale on well know websites". The theory is that any development potential increases the price they can get for the property.
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sg
Posts: 68
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Post by sg on May 30, 2017 16:34:41 GMT
Please don't take this question the wrong way, it is asked as a genuine query. I would like to know if, and more so why, anybody would invest in this loan ?
For me it ticks all the wrong boxes.
1/ Short(ish) term so poor risk/return.
2/ 8% for no obvious reason other than money supply.
3/ Low(ish) value along with 70% LTV means that any recovery fees will eat a large chunk of the surplus.
Add to that there are millions of pounds worth of long 12% and above loans available right now on other platforms and I didn't look at this for more than a few seconds. Am I doing this wrong or missing something or is my analysis ok. I genuinely don't understand how these loans get a single investor.
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moist
Member of DD Central
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Post by moist on May 30, 2017 16:59:43 GMT
I know the area, the bungalow is instantly saleable and would be converted to a chalet style property, like the rest of the street... will not default in a million years. (hides behind sofa)
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dermot
Member of DD Central
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Post by dermot on May 31, 2017 19:15:43 GMT
I know the area, the bungalow is instantly saleable and would be converted to a chalet style property, like the rest of the street... will not default in a million years. (hides behind sofa) i wouldn't be quite so wildly enthusiastic, but in general, I agree - I cycle and drive past there from time to time as I have friends and relatives living nearby. Traffic noise is way too much for me, but people love the area for the rail access to Marylebone. Importantly, there are several decent pubs and eateries close by. If I wanted an 8% home for cash for 9 months, I'd be happy enough with this.
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am
Posts: 1,495
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Post by am on Jun 1, 2017 8:54:31 GMT
I know the area, the bungalow is instantly saleable and would be converted to a chalet style property, like the rest of the street... will not default in a million years. (hides behind sofa) If you look at the Zoopla page for the property, you'll find a listing history. It's been on the market since last September, but only at the current price since the end of March. But they didn't move out until January or later (the new premises opened in January).
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