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Post by mrclondon on Aug 7, 2017 11:52:06 GMT
MoneyThing the VR para 1.78 indicates that a schedule of comparables was provided in an appendix II to the report. Can we have a copy of this appendix please as without it the valuation is pretty much impossible to validate. EDIT: crossed with SteveT
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Post by mrclondon on Aug 7, 2017 12:15:18 GMT
Thanks. FWIW the loan of £500k is the equivalent of c. £1.1m per hectare of land. My thinking here is if the borrower is unable to secure development finance (or simply the scheme will no longer be profitable without the ground rents), the only future for this site is total demolition and rebuild with new residential properties. (The VR report makes it clear care home provision not a practicable option). So the question is, would a residential developer pay £1.1m / hectare in Paisley ? Is there demand for new build properties in this location ? The property is a 'Category B' listed building so I assume flattening it to build houses on would be frowned on by the local authority. Yes, very good point, so its probable the main building would need to be retained and converted in flats, the modern extensions demolished, and additional "blocks" of a compatible visual style built in the grounds. All of which will make the build costs higher than starting with a brownfield site, and lowering the land's residual value. Also worth noting construction of 480 new build homes is due to start later this year on the old Ciba Geigy (latterly BASF) pigments factory site (which I visited on numerous occaisons whilst working for Ciba) on Hawkshead road which is to the east of this site, but not much further out of Paisley town centre, and also has a station (Hawkhead) adjacent. www.millerdevelopments.co.uk/our-developments/hawkhead-road
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GeorgeT
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Post by GeorgeT on Aug 7, 2017 12:28:38 GMT
All that glistens is not gold - not even on MT.
Quite an interesting track record. If the great Ronnie Barker was still alive he might have been able to find a suitable new comedy partner here - for 2 reasons. One would have been that the new recruit would have a lot of stories to tell from the big chair.
Undecided whether to go for this one. When I saw it was coming up I thought woohoo and was lining up my funds. Not so sure now.
Don't think I'd want to be holding this one when it came due for repayment.
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Post by mrclondon on Aug 7, 2017 12:44:46 GMT
Don't think I'd want to be holding this one when it came due for repayment. Agreed. However note that the loan listing states "The underlying loan agreement with the borrower is an interest only agreement, where interest is paid monthly and capital is paid at the term. " The borrower could cease paying interest at any time, and if he were to decide the project was no longer viable there must be a temptation to "walk away" given the loan value of £500k is the same as the "offers over" price of the recent sale listing.
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Post by mrclondon on Aug 7, 2017 13:16:28 GMT
MoneyThing would it be possible to get further clarification from your legal advsiers concerning para 1.70 in the VR which states (my bold) The business plan and student accommodation brochures provided to us demonstrates the proposed vehicle for repaying the lender. That is, the sale of individual units to private investors. The units are intended to be sold on the basis of 150 year leases to the purchasers with the purchaser paying a ground rent of £300 per annum to the Landlord. We understand that you have considerable experience of this sales model, having previously built and sold a 95 studio student accommodation scheme at H***** St, B******.
and its compatability to the current legislation on leasehold in Scotland (I have amended my previous post, as the forthcoming changes on new leaseholds are for England & Wales only). My understanding is it hasn't been possible to create new leasehold properties in Scotland for a number of years now. Is there some exemptions for quasi-commercial properties that this would fall under ? Are you using legal agents based in Scotland for this transaction ? Its already been mentioned that the VR has been produced by a London based firm. Can you confirm that it was written by a surveryor who is an expert in Scottish property ?
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GeorgeT
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Post by GeorgeT on Aug 7, 2017 13:45:16 GMT
I'm afraid to say this one is struggling to pass my comfort test, and I'm sure lots of red warning lights are flashing on the dashboards of the hardcore DD probers.
If I've been looking at the right records, the associated company has something of a chequered history, to put it mildly. And the same can be said of a connected individual.
Add into the mix the question marks about the proposal and I'm not willing to back it, unless MT can provide a lot of reassurance and good reasons why I should. 12% looks too low on this one, considering MT have put out better looking loans at 13% recently.
Like others, I'm a bit bemused why a firm in Surrey was instructed to do a valuation in Scotland. It can't have been fee economic - the travel time/cost and (possibly) overnight accommodation cost must have pushed the fee up by a great extent and it would surely have been cheaper to use a local valuer - who would also have had the benefit of local knowledge and experience. There must have been a reason why this South East valuer was instructed - but it's an oddity of a situation that MT should explain.
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am
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Post by am on Aug 7, 2017 13:53:43 GMT
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Post by mrclondon on Aug 7, 2017 14:26:54 GMT
From www.hopwoodhouse.com/student-property a student property specialist Q. Are student properties sold on a freehold or leasehold basis?
A. If you are purchasing a student property in England, then the likelyhood is that you will be purchasing on a leasehold basis, and usually these will range from 125 years up to 999 years. If you are purchasing a student property in Scotland, then you will likely find that this comes with 'unfettered ownership' which is the equivalent of freehold in England.Which suggests at the very least it is not normal practise to create leasehold student properties in Scotland. At present I'm far from convinced the borrower has a business plan (and hence exit strategy) that will stand up to scrunity when applying for development finance. Aside from this issue of leasehold, there is no indication of who or what would operate the language school.
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oldgrumpy
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Post by oldgrumpy on Aug 7, 2017 15:02:01 GMT
One of Lendy's borrowers (who lives down by the riverside) speaks ten languages, (I have read).
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GeorgeT
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Post by GeorgeT on Aug 7, 2017 15:28:08 GMT
I wouldn't surprised if this one gets pulled at the last minute, or at least postponed pending further professional advice. I and many others don't like the smell of it and there are too many unanswered questions.
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ozboy
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Post by ozboy on Aug 7, 2017 15:40:52 GMT
Surely it'll get pulled, it's not worth MT pursuing until Questions are satisfactorily answered, they've worked too hard to build their rep.
Which causes me to wonder what you're all thinking, why have MT taken this on in the first place?!
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registerme
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Post by registerme on Aug 7, 2017 15:45:15 GMT
Yeah for me this is currently a "stick a quid in to see what you can learn" type proposition. There's far too much, hmmm, let's be kind and say "uncertainty", around it for my liking.
Either pulled, or MT need to provide a lot more detail and clarity. The low LTV is all to the good, if its real......
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oldgrumpy
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Post by oldgrumpy on Aug 7, 2017 15:45:20 GMT
The college website already says:
We have 99 studios on campus, some are studio apartments with their own kitchens, some are en-suite. All units are fully-furnished.
Studio Apartments All studio apartments have the following features:
High speed Wi-Fi connection, Double bed & mattress, Wardrobe, Desk chair, Shelving unit, Storage Heater, 2 under bed storage units, Wall lighting, Chest of drawers, Curtains / blinds, kitchen, Shower tray & shower, Toilet & sink, Extractor fan, Mirror, Shelf.
Consistently are/have ... not will be/will have
The MT loan details say:
Loan Summary This six month loan has a value of £500,000 and is secured against a vacant property with planning for the conversion into a language school with residential accommodation in Paisley, Scotland. The vacant possession valuation of the property is £1,200,000 giving this loan a loan-to-value ratio of 42%.
Ed, somethings going on. Please consider your excellent platform's reputation here. Consider at all the borrower's Google records. We have.
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ozboy
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Post by ozboy on Aug 7, 2017 15:57:14 GMT
I have a spare Gas Mask which I'll give you Dude. (Not Loan)!! .................. [ Insert Emoticon here of OzBoy holding his nose with both hands ]
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oldgrumpy
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Post by oldgrumpy on Aug 7, 2017 16:03:08 GMT
Plan 'B' MoneyThing (Ed) what about 'Glasgow waste' how far away is this one from listing, how close are the legals to completion, can it be brought forward? Come on @magenta14 !! This one is the 'Glasgow waste' loan!
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