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Post by elephantrosie on Aug 3, 2017 4:37:48 GMT
someone just invested over 17k.
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james100
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Post by james100 on Aug 4, 2017 7:17:11 GMT
Afternoon, I've asked for further clarification and will post later. Many thanks, Gordon Hi Collateral Rep, do know when you're likely to have the response to this? Many thanks.
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seeingred
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Post by seeingred on Aug 4, 2017 8:15:54 GMT
From the loan details:
"The exit is by sale of each of the 34 properties." There is no mention of further tranches, or ranking.
Can this point be clarified - what state is the site likely to be in 6 months down the line - January?
This loan cannot surely be exited by sales?
What funds would be used to repay this 6 month loan if (A) the project continued or (B) the site became distressed again?
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btc
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Post by btc on Aug 4, 2017 10:45:51 GMT
someone just invested over 17k. I have been watching, the same investor also has 62k, 8k and 11k. They must be aiming for the 4%
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Post by mrclondon on Aug 4, 2017 12:44:08 GMT
Regular readers of the FS board will know I like to compare the valuation of development plots with the 2015 government figures for average land values to get a feel for a potential worse case fire sale valuation. www.gov.uk/government/uploads/system/uploads/attachment_data/file/488041/Land_values_2015.pdfThe site is 1.8 acre = 0.73 hectare. Average land values for the Burnley council area with residential permission for a typical building density is £660k / hectare so the site firesale value could be as low as c. £480k with planning permission (c. 150% LTV). Without planning possibly c. £250k. (c. 300% LTV) based on £350k/ hectare for brownfield land, taking a figure slightly below the North West average of £400k/hectare. |
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seeingred
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Post by seeingred on Aug 4, 2017 13:31:51 GMT
In simple terms what concerns me is the real valuation of the site 'as is'. If the borrower is given c 800k and walks away, and the site in a distressed state is sold next winter for £480k, less various fees, where does that leave investors? I had similar concerns about Darwen but invested a little (which may have been too much).
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Post by mrclondon on Aug 4, 2017 15:06:10 GMT
In simple terms what concerns me is the real valuation of the site 'as is'. If the borrower is given c 800k and walks away, and the site in a distressed state is sold next winter for £480k, less various fees, where does that leave investors? I had similar concerns about Darwen but invested a little (which may have been too much). Where does it leave investors ? Possibly in a similiar position to those in the nearby FS Rishton loan - a similiar sized plot, similiar expired planning, £1m loan, brownfield land value < £200k, and no obvious reason why anyone would actually develop the plot at the present time (GDV per unit to achieve a profit way above local market prcies) . FS have not defaulted the loan (now approaching 12 months beyond the end of its first 6 month term) and are cajoling the borrower to find the funds from somewhere to repay. Defaulting the loan and appointing LPA receivers would of course crystallise a major loss. Not too surprising my analysis of the Darwen loan reached similiar conclusions (2.3 acres = 0.93 hectares Blackburn & Darwin £665k / hectare residential, so the site fire sale value could be as low as £620k or 170% LTV). These residual land valuations are all based on planning applications with significantly above (historical) average build densities - and there is no obligation on any council outside the inner London boroughs to approve (or more importantly re-approve) planning applications for rabbit hutch densities. The question is (outside the south east) whether there is demand to fill all the rabbit hutches being built.
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Post by mrclondon on Aug 4, 2017 15:51:17 GMT
The probable imminent banning of the creation of new leasehold houses will affect the profitability analysis of all these proposed developments (which being in the North West have all been valued on a leasehold basis by default) as there will now be no site freehold to be sold on for pure profit once the development is finished. It will tip projects with borderline profitability into the now not worthwhile category unless there is scope to increase the price of the houses beyond that assumed for leasehold purposes.
Infact the more I think about it, the more I wonder whether the reason we see more speculative development plots on p2p in the North West (where leasehold is the norm) than elsewhere in the country is simply because of the ability to generate significant hidden profit by selling on the freeholds.
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Post by elephantrosie on Aug 4, 2017 16:15:33 GMT
someone just invested over 17k. I have been watching, the same investor also has 62k, 8k and 11k. They must be aiming for the 4% investing in a few lump sums... the investor is selling his assets elsewhere to fund this loan?
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Post by Collateral Rep on Aug 4, 2017 17:48:06 GMT
Hi james100 , Sorry for the delay, I should have it next week once key people are back from their holidays. As always our due diligence is carried on right up until drawdown and we will have documentation on this before drawdown takes place. Many thanks, Gordon |
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stevio
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Post by stevio on Aug 7, 2017 14:00:33 GMT
Hi james100 , Sorry for the delay, I should have it next week once key people are back from their holidays. As always our due diligence is carried on right up until drawdown and we will have documentation on this before drawdown takes place. Many thanks, Gordon Hi Collateral Any further update on the planning confirmation for this one? The value of the land is dependant on planning still being in place Also, as this is the same borrower as BL00046, please could you confirm: - any previous history of the borrower completing similar projects? - running two large developments successfully in parallel? Thanks
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seeingred
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Post by seeingred on Aug 7, 2017 20:53:36 GMT
In the cold light of day, in the afterglow of Cashback, the SM on loan 00046 is static and going almost nowhere. Anyone who bought expecting a quick (or any) sale of their loan parts could be in for a long wait. The same may happen here - of the money so far invested probably 150k is from a couple of BH investors who may have more money than perspective. That implies the actual sales to more regular investors - a few hundred to a few thousand - has been quite small as yet - maybe only 25% of the loan over the first 5 days of availability. It could be a long haul.
I wouldn't want to be holding both of these 'linked' loans with no SM market to speak of - cashback or no cashback.
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Post by elephantrosie on Aug 7, 2017 21:50:03 GMT
agree with the above.
i seriously recommend col to stop cashback initiative.
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elliotn
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Post by elliotn on Aug 8, 2017 0:51:32 GMT
agree with the above. i seriously recommend col to stop cashback initiative. It's tax free, very popular and allows Coll to scale as other platforms have done so at similar stages of their development - are you asking the platform to change all their plans because you don't like your secondary market position? Only buy what you are prepared to hold to term, if any, based on your due diligence and then this problem will not arise. I do not think you should deprive other investors of the choice to do so.
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Post by Collateral Rep on Aug 10, 2017 11:11:51 GMT
Afternoon,
The QS is on site today, so we will have the updated planning statement in the next couple of days, which we will add to the listing.
Many thanks,
Gordon
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