dovap
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Post by dovap on Jul 15, 2017 11:02:31 GMT
why is 1.8mill considered the distressed base ? Couldn't sell at 2.1 for 5+ years then 1.8 doesn't sound particularly distressed.
1.4m on 1.8m is already ~78 ltv (leaving aside whatever is happening with the 1.5m BoS charge and 700k abl)
Sadly seems it's time to start considering being overweight on the MT platform
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am
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Post by am on Jul 15, 2017 11:02:59 GMT
This is without doubt the dodgiest loan I can recall seeing offered on MT. I do hope the Things are not losing their grip. Anyone in the Boatyard loan on FS will have seen the difficulties in recovery proceedings in Scotland. I would not be overly surprised if MT pull the loan before launch, but if they don't I will not be participating. I think it's premature to call it dodgy. Questionable maybe, since there is a lack of clarity about the proposition. The confusingly similar names didn't help, especially if people (like the Daily Record) are sloppy and only use the first two words, but the real problem is the unexplained presence of the ABL loan. Once we have this sorted we can turn to looking at the valuation and the exit plan.
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hazellend
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Post by hazellend on Jul 15, 2017 11:03:11 GMT
This is without doubt the dodgiest loan I can recall seeing offered on MT. I do hope the Things are not losing their grip. Anyone in the Boatyard loan on FS will have seen the difficulties in recovery proceedings in Scotland. I would not be overly surprised if MT isull the loan before launch, but if they don't I will not be participating. I'm so glad l'm not the only one on this forum that isn't so positive on the outlook of this loan. You are going to enjoy these forums then because almost every loan has people with positive and negative opinions. The ones with universally negative opinions usually do get cancelled.
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on Jul 15, 2017 11:04:24 GMT
I really hope that this loan works well, as any schadenfreude at being vindicated will be insignificant compared to the damage done to my hugely overweight position in MT. The only way you would be vindicated is if the loan defaults and even at fire sale achieves nowhere near it's 65% LTV ~ 1.3 million. Do you think this is likely, given the previous sale was distressed and achieved 1.8 mill? Not to mention once planning application extended paper valuation would increase. For me the most important thing is the security. I assume every loan has a significant chance of default when investing so am not overly concerned about the possibility of this happening if the security is good. All I can say is that I initially felt much better about several loans on other platforms which now look like returning little if anything. Every investor has to make their own decisions. Best of luck.
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am
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Post by am on Jul 15, 2017 11:09:39 GMT
Turning to the issue of planning, while the residual valuation based on the GDV is not being relied upon by MT, the purchase price may contain an element of hope value.
The Daily Record reported local opposition to planning permission back in 2014. I don't know enough about how planning works to make an informed judgement, but I would be cautious that an application to extend planning permission would be rubber stamped.
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am
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Post by am on Jul 15, 2017 11:23:51 GMT
I used to pass by this site (en route to Culzean or Logan or Clatteringshaws) reasonably often when I was younger. Even if I was in the market for a holiday lodge it's not a location I'd pick - it's one of those locations which has neither the verdant beauty of the lowlands or the majestic beauty of the mountains. As I recall it doesn't have much in the way of a view either - the best view would be of Criffell and that's naught but a big lump. If you're just using it as a pied-a-terre I suppose it would be OK (it being on the A75 - the main road to Ulster - would be a plus in that situation), but it's not so good for pedestrians or public transport. I'd be much happier with a development down by Kippford or Rockcliffe.
But then I didn't understand why people would want to buy lodges in a semi-rural location between Lytham St. Annes and Preston either.
Correction made downthread: I'd misplaced the property.
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am
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Post by am on Jul 15, 2017 11:45:37 GMT
If the numbers being bandied around are correct the Lendy loan was for 100% of the purchase price, and the MT loan is for about 75% of the purchase price. Either the borrower has a mezzanine tranche lined up, or they've found some equity to put into the project.
The ABL loan seemed to be 120% of the purchase price. Am I missing something, or is that 100% + 20% for interest and fees?
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Post by oktaeder on Jul 15, 2017 12:27:49 GMT
ABL: 53% LTV, 16% p.a, 2nd Charge, 700k.
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am
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Post by am on Jul 15, 2017 13:12:54 GMT
ABL: 53% LTV, 16% p.a, 2nd Charge, 700k. Seems it didn't express myself accurately - by ABL loan I meant the whole package including first and second charges. If ABL stated a 53% LTV then presumably they were using the residual valuation.
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am
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Post by am on Jul 15, 2017 14:51:34 GMT
Hi Ed MoneyThing , why are our borrowers financing away from the current 1st charge holder the Bank of Scotland, please what can you tell us? Separately thank you am for sharing your local perspective, very helpful. The borrowers aren't financing away from BoS. That 1st charge is over the vendor. My guess is that the vendor pays off what his company owes BoS (circa £200,000 if I read the entrails at Companies House correctly) and retires on the remainder of the proceeds of the sale, less CGT at entrepreneurs' rate. (The vendor company has a nominal NAV circa £250k, but I suspect that this fails to reflect, through lack of a reevaluation, capital gains in the value of the property. You should note that my "local" perspective is also personal. Other people might have different attitudes.
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am
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Post by am on Jul 15, 2017 15:08:32 GMT
I used to pass by this site (en route to Culzean or Logan or Clatteringshaws) reasonably often when I was younger. Even if I was in the market for a holiday lodge it's not a location I'd pick - it's one of those locations which has neither the verdant beauty of the lowlands or the majestic beauty of the mountains. As I recall it doesn't have much in the way of a view either - the best view would be of Criffell and that's naught but a big lump. If you're just using it as a pied-a-terre I suppose it would be OK (it being on the A75 - the main road to Ulster - would be a plus in that situation), but it's not so good for pedestrians or public transport. I'd be much happier with a development down by Kippford or Rockcliffe. But then I didn't understand why people would want to buy lodges in a semi-rural location between Lytham St. Annes and Preston either. Correction: I'd confused this in my memory with land on the other (east) side of Castle Douglas. This is not the bleak area that I was remembering. Please dial down the negative impression by 50% or more. I'd looked at the aerial photographs at Google Maps, and misjudged the location.
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fogey
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Post by fogey on Jul 15, 2017 16:38:21 GMT
I don't sense the same level of euphoria here as I saw just before the launch of the Lancs Park a few months ago ... Neither do I see the magical prefix which persuades many to buy with some confidence without looking too far into the details ... So even though this loan is offering 13% does it stand any chance of selling out within 30 hours as Lancs did ? I also sense the general level of euphoria that I first encountered on MT earlier this year has also diminished. The Bolton saga seemed to mark the start of this disaffection with many investors feeling that they had been abandoned in some way, but now the game of musical chairs appears to becoming very widespread and therefore more acceptable. Interestingly the SM sales of Lancs has picked up noticeably today with over 7k already sold, perhaps as it is seen as the safer bet at the moment.
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pom
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Post by pom on Jul 15, 2017 18:34:08 GMT
Way I see it if Ed gets us the first charge, based on a much more sensible valuation (ie ignoring the planning that may well expire) then this is BY FAR the best iteration of the deal that we've seen, so I'm very definitely in (even if my greedy self will miss the ABL 16%!)
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am
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Post by am on Jul 15, 2017 19:11:54 GMT
I've found some planning documentation on the relevant council web site. There are two applications. The one with 117 documents is the one that has a decision notice. In both cases the applicant was BLE, not BLC.
My guess is that BLE bought an option to buy the property for £1.8m. BLE didn't go on to develop the project for some reason. Since the sale is going ahead to BLR at the same price, in spite of the potential valuation uplift from planning, I also suspect that BLE sold the option to BLR, in which case for the acquisition cost we need to know not only the purchase price, but also the price paid for the option. On the other hand the VR has reference to the vendor's principal's personal problems that result in him wanting to complete the sale rather than retesting the market.
If my speculation about options were correct that would make the loan floated at Lendy more reasonable. But if that was the case Lendy could have quenched discussion with a simple statement "the borrower has an option to purchase the property for £1.8m. The borrower has subsequently obtained planning permission enhancing the valuation to £4.1m, and now wishes to proceed with the purchase." So perhaps there wasn't an option.
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Jul 15, 2017 19:36:16 GMT
I've found some planning documentation on the relevant council web site. There are two applications. The one with 117 documents is the one that has a decision notice. In both cases the applicant was BLE, not BLC. My guess is that BLE bought an option to buy the property for £1.8m. BLE didn't go on to develop the project for some reason. Since the sale is going ahead to BLR at the same price, in spite of the potential valuation uplift from planning, I also suspect that BLE sold the option to BLR, in which case for the acquisition cost we need to know not only the purchase price, but also the price paid for the option. On the other hand the VR has reference to the vendor's principal's personal problems that result in him wanting to complete the sale rather than retesting the market. If my speculation about options were correct that would make the loan floated at Lendy more reasonable. But if that was the case Lendy could have quenched discussion with a simple statement "the borrower has an option to purchase the property for £1.8m. The borrower has subsequently obtained planning permission enhancing the valuation to £4.1m, and now wishes to proceed with the purchase." So perhaps there wasn't an option. "Do yer trust The Platform? Well, do yer, Punk?!" Which is what it's increasingly coming down to. If it hasn't already.
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