ding
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Post by ding on Jul 19, 2017 10:28:51 GMT
1) Property Development Loan
Interest P/A - 12%
Loan value of £1,225,000 (value £1,750,000)
LTV - 70%.
Loan Term - 6 months
Bid Limit - None
For Investments of £0.00 - £4,999.99 – 0.25% Cashback
For Investments of £5,000.00 - £9,999.99 – 0.5% Cashback
For Investments of £10,000.00 - £24,999.99 – 1.0% Cashback
For Investments of £25,000.00 - £49,999.99 – 2.0% Cashback
For Investments of £50,000.00 - £99,999.99 – 3.0% Cashback
For Investments of £100,000.00 + – 4.0% Cashback
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james100
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Post by james100 on Jul 19, 2017 11:07:03 GMT
Hi collateral rep , Collateral Rep or anyone else,I've just been through the valuation report for this and have a question which I hope you can help me with, please. I understand this loan is calculated at 70% LTV based on a revision to the current planning permission granted - not the planning permission currently held. The report gives solid context and reason for supporting the revision to be made (increase in townhouses, reduction in apartments) in terms of GDV and general saleability. These are the three lines that jump out at me (my underlining): 1) "We are of the opinion that the Market Value of the Freehold interest in the site on a Vacant Possession basis with the benefit of the revised planning
permission is the sum of £1,750,000." 2) "The current planning permission is to be revised and it is assumed this will be forthcoming. The
lender may wish for assurances prior to securing the loan." 3) "...We therefore consider the proposal to increase the mix of properties on site is correct i.e. increasing the number of town houses to 51 and reducing the number of apartments to 22. We consider the demand for the apartments will be significantly less
buoyant than the town houses.
"I note from the loan description that revised planning will be applied for post-acquisition (being the purpose of this loan), but I'd like to understand what the value of the site is currently as 70% is the max LTV I'm comfortable with. Will the revised pp be granted automatically and if so, why the valuation comment about getting assurances prior to lending? Any info, insight or general knowledge to help me get my head around this would be much appreciated. Thanks in advance. |
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hazellend
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Post by hazellend on Jul 19, 2017 11:12:29 GMT
Somebody lend me 100k please?
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guff
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Post by guff on Jul 19, 2017 11:57:21 GMT
Somebody lend me 100k please? No problem. Send me your bank details...
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locutus
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Post by locutus on Jul 19, 2017 12:06:21 GMT
Somebody lend me 100k please? 17%  Still worth it isn't it? 4% cashback on a 6 month loan equates to 8% bonus over base rate over the 12 months.
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ding
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Post by ding on Jul 19, 2017 12:22:30 GMT
Still worth it isn't it? 4% cashback on a 6 month loan equates to 8% bonus over base rate over the 12 months. I didn't notice the '6 month'. Assumed this borrower would want more and more and more £ to develop the site. Suppose later tranche could be the size of this loan and more to cover further work. Or of course refinance elsewhere. "Exit The exit to this loan is refinance or develop the site in phases and by way of the sale of each unit. " "The purpose of this loan is to assist with the purchase of the site, professional fees and clearing the site ready to commence the initial works on the development"
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binkle
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Post by binkle on Jul 19, 2017 14:27:32 GMT
Will await response to james100 before investing...
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Post by harryvederci on Jul 19, 2017 14:48:04 GMT
but I'd like to understand what the value of the site is currently as 70% is the max LTV I'm comfortable with
Site is on market & under offer from OIRO £1,200,000, hence purchase price a lot closer to £1.2m than £1.75m?
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Post by elephantrosie on Jul 19, 2017 15:04:54 GMT
again, another loan with cashback from col. grab popcorns, sit back and watch the first person to invest a five figure sum.
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ozboy
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Post by ozboy on Jul 19, 2017 22:33:57 GMT
17% Still worth it isn't it? 4% cashback on a 6 month loan equates to 8% bonus over base rate over the 12 months. You been on that Tropical Punch again elliott? 12% + 4% = 17%  ?? Probably good arithmetic where you are I suppose, especially if it's a Tax Haven.  Or am I missing something, which is not unusual, in fact, most likely!
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elliotn
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Post by elliotn on Jul 20, 2017 2:02:00 GMT
Still worth it isn't it? 4% cashback on a 6 month loan equates to 8% bonus over base rate over the 12 months. You been on that Tropical Punch again elliott? 12% + 4% = 17% ?? Probably good arithmetic where you are I suppose, especially if it's a Tax Haven. Or am I missing something, which is not unusual, in fact, most likely! You were missing my mark-up to offer hazel a 100k. locutus muddied the water by highlighting the 6m horizon...for which, yes, the competitively priced, locally sourced brew will take the blame! 
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Post by Collateral Rep on Jul 20, 2017 9:31:28 GMT
Hi james100 , We have spoken to the surveyor regarding the queries and their view is that the valuation, both with the existing planning and the suggested changes (reducing the number of apartments and increasing the number of houses) is the same. The reason for the requested planning changes is looking at the end sales in that the demand for houses in this area is greater than apartments. These changes won’t cause any delays in starting the development of the site, as it only affects one of the titles and work can commence immediately on the others whilst the planning change is requested. The borrower has informed us that the local councils preference is for family residence. Many thanks, Gordon |
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ozboy
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Post by ozboy on Jul 20, 2017 9:40:42 GMT
You been on that Tropical Punch again elliott? 12% + 4% = 17% ?? Probably good arithmetic where you are I suppose, especially if it's a Tax Haven. Or am I missing something, which is not unusual, in fact, most likely! You were missing my mark-up to offer hazel a 100k. locutus muddied the water by highlighting the 6m horizon...for which, yes, the competitively priced, locally sourced brew will take the blame! Yes, I had missed that hazel offer. I really must up my concentration and comprehension levels, especially if I'm going to continue playing The P2P Game.
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ozboy
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Post by ozboy on Jul 20, 2017 9:43:07 GMT
Hi james100 , We have spoken to the surveyor regarding the queries and their view is that the valuation, both with the existing planning and the suggested changes (reducing the number of apartments and increasing the number of houses) is the same. The reason for the requested planning changes is looking at the end sales in that the demand for houses in this area is greater than apartments. These changes won’t cause any delays in starting the development of the site, as it only affects one of the titles and work can commence immediately on the others whilst the planning change is requested. The borrower has informed us that the local councils preference is for family residence. Many thanks, Gordon I recall that this is stated in the VR?
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elliotn
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Post by elliotn on Jul 20, 2017 10:32:39 GMT
Surely two different mixes of property would yield some difference in valuation (particularly as we already know the existing valuation from RM). If family residence is in greater demand the developer - who is incurring the extra cost and delay of amending pp - might reasonably expect a greater yield for his/her efforts (and not only to expedite sales' times) - or am I missing something? 😳 Edit - not tagging gwhite who can only reasonably express the opinion of the valuation expert. Edit 2 - am however tagging ozboy |
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?? Probably good arithmetic where you are I suppose, especially if it's a Tax Haven. 
