|
Post by MoneyThing on Feb 26, 2018 9:28:53 GMT
MoneyThing , with 56 of the flats now having been sold, do the purchasers of the flats rank ahead of the investors in this loan, should it default, please? This wasn't (and still isn't) clear with the default of BPF808 & 809 Res Dev in B*********, so clarity with how it affects this Liverpool loan would be very much appreciated. Morning. All the purchasers have been lodged at Land Registry under Unilateral Notices after our charge. Kind regards, Ed.
|
|
stevio
Member of DD Central
Posts: 2,065
Likes: 894
|
Post by stevio on Feb 26, 2018 10:27:06 GMT
Wondering if loans could ever be structured in almost an amortizing way towards the end of the loan, so that the money from sales is used to part pay off the loan in small amounts, possibly making everybody more comfortable to stay till the end
|
|
mary
Member of DD Central
Posts: 698
Likes: 711
|
Post by mary on Feb 26, 2018 11:44:19 GMT
Wondering if loans could ever be structured in almost an amortizing way towards the end of the loan, so that the money from sales is used to part pay off the loan in small amounts, possibly making everybody more comfortable to stay till the end That would certainly make it more attractive!
|
|
|
Post by mrclondon on Feb 26, 2018 12:10:51 GMT
MoneyThing , with 56 of the flats now having been sold, do the purchasers of the flats rank ahead of the investors in this loan, should it default, please? This wasn't (and still isn't) clear with the default of BPF808 & 809 Res Dev in B*********, so clarity with how it affects this Liverpool loan would be very much appreciated. Morning. All the purchasers have been lodged at Land Registry under Unilateral Notices after our charge. Kind regards, Ed. However the rub is that in any refinancing of the MT loan, the charge of the new loan provider would be behind all the Unilateral Notices already registered at that point. Which I guess will reduce the attractiveness of the 1st charge somewhat, and may be a factor in whether the providers the borrower had already identified for development finance will still be interested (or interested enough to offer an attractive rate)
|
|
|
Post by eascogo on Feb 26, 2018 12:46:40 GMT
Wondering if loans could ever be structured in almost an amortizing way towards the end of the loan, so that the money from sales is used to part pay off the loan in small amounts, possibly making everybody more comfortable to stay till the end That would certainly make it more attractive! With 25% already on the SM it is unlikely that restructuring this particular loan would make much difference.
|
|
jlend
Member of DD Central
Posts: 1,832
Likes: 1,461
|
Post by jlend on Feb 28, 2018 17:06:17 GMT
Update, now 56 units exchanged (+5) and 30 reserved (+7). They expected 100 exchanges by September last year so have some catching up to do. I don't know how many exchanges they need to repay the loan in about 12 weeks time though.
|
|
|
Post by medelm on Mar 6, 2018 11:47:46 GMT
I did some investigation into this as I do have a sizable investment in this loan and it has such a large amount on the SM I wanted to see if there was anything truly wrong underneath. I do this to collate my own thoughts and get them on paper, it’s all conjecture and may be completely wrong. I share it with you guys for feedback and to let me know if I have any obvious mistakes.
The total build has between 312-314 units (different numbers in a few places), there are various configurations between 1 and 2 bedrooms.
After some calls and emails I have confirmed for the 1 bedroom the following is the case:
- 1 Bed Cost is £103,200
- £5000 deposit required.
- 35% required within 28 days (less the initial deposit) on first exchange.
- Still confirming how long after the balance is due and if it’s tied to completion of builds.
Based on the last update there are 56 exchanged and 30 reserved. I interpret this to be 56 have had the 35% deposit and 30 have had the £5000 pound deposit. I have used 1 bed as the value in the calculation as I don’t have the information that shows the breakdown of which of the 56 or 30 are one or two bedroom have been reserved/exchanged. This should mean the calculation is on the conservative side.
1 Bed Cost: £103,200
30 * 1 Bed Deposit: £5000 * 30 = £150,000
56 * 1 Bed 35%: £36,120 = £2,022,720
Total: £2,172,720
The total of the loan is currently £2,500,000, interest has been serviced monthly (source of funds unknown?), there are also exit and other fees to be considered.
If we assume the 65% of the reserved go to exchanged we have:
20 * (£36,120 - £5000) = £622,400
£622,400 + £2,172,720 = £2,795,120
At this amount and assuming all these funds have been ring fenced and not used on the development OR to pay down the interest, it should be enough to clear the loan. Its worth noting that this is only 76 of the 312 units exchanged, which is only 25% of the total development. There are plenty more to sell (if they can!).
The other exit is development finance, which is required to deliver the project. The amount required in total as per the valuation report is £21,000,000 inclusive of professional fees, MoneyThing has mentioned that the borrower can source this from a lower cost source.
I will add that I don’t think at this stage MoneyThing, even if they wanted to match on price, could fund £21,000,000 even over the course of the couple of years it will take to build. At a total guess the initial drawdown would be multimillions and I cant see how that would ever fill in the current state.
Therefore in conclusion I am still happy with this loan. Assuming the funds gathered from sales of units so far has not been spent elsewhere it should be sufficient to repay the loan. I do not see MoneyThing offering development finance as a viable exit and I sure hope for the project sake that they are actively seeking this from other parties.
|
|
ant1
Member of DD Central
Posts: 54
Likes: 23
|
Post by ant1 on Mar 6, 2018 13:58:18 GMT
Is there anyone local who could provide an update on the construction progress? ... please.
The last time I checked the website for the flats it was just displaying a photograph of a pile of rubble.
|
|
jlend
Member of DD Central
Posts: 1,832
Likes: 1,461
|
Post by jlend on Mar 6, 2018 14:04:03 GMT
Is there anyone local who could provide an update on the construction progress? ... please. The last time I checked the website for the flats it was just displaying a photograph of a pile of rubble. They haven't started building them yet. From my limited knowledge. They have re applied for planning permission, basically so they can have more 2 bed flats as the 1 beds were slow to sell. They expect to get a response at the end of April.
|
|
jlend
Member of DD Central
Posts: 1,832
Likes: 1,461
|
Post by jlend on Mar 6, 2018 14:22:14 GMT
I think that is a good summary medelm I had assumed that they had been spending some of the money for things like interest, architects, planning permission, legal fees, insurance, demolition, marketing costs, fees for keeping the site secure etc. Given they expected 100 exchanges in September 2017, I assumed they need more than this to repay the MT loan. You may be right and the exchange and deposit money is ring fenced to repay the MT loan
|
|
|
Post by marcusponds on Mar 6, 2018 14:37:34 GMT
MARCUS -sorry ignore this, I meant to quote not copy medelm’s post. I did some investigation into this as I do have a sizable investment in this loan and it has such a large amount on the SM I wanted to see if there was anything truly wrong underneath. I do this to collate my own thoughts and get them on paper, it’s all conjecture and may be completely wrong. I share it with you guys for feedback and to let me know if I have any obvious mistakes. The total build has between 312-314 units (different numbers in a few places), there are various configurations between 1 and 2 bedrooms. After some calls and emails I have confirmed for the 1 bedroom the following is the case: - 1 Bed Cost is £103,200 - £5000 deposit required. - 35% required within 28 days (less the initial deposit) on first exchange. - Still confirming how long after the balance is due and if it’s tied to completion of builds. Based on the last update there are 56 exchanged and 30 reserved. I interpret this to be 56 have had the 35% deposit and 30 have had the £5000 pound deposit. I have used 1 bed as the value in the calculation as I don’t have the information that shows the breakdown of which of the 56 or 30 are one or two bedroom have been reserved/exchanged. This should mean the calculation is on the conservative side. 1 Bed Cost: £103,200 30 * 1 Bed Deposit: £5000 * 30 = £150,000 56 * 1 Bed 35%: £36,120 = £2,022,720 Total: £2,172,720 The total of the loan is currently £2,500,000, interest has been serviced monthly (source of funds unknown?), there are also exit and other fees to be considered. If we assume the 65% of the reserved go to exchanged we have: 20 * (£36,120 - £5000) = £622,400 £622,400 + £2,172,720 = £2,795,120 At this amount and assuming all these funds have been ring fenced and not used on the development OR to pay down the interest, it should be enough to clear the loan. Its worth noting that this is only 76 of the 312 units exchanged, which is only 25% of the total development. There are plenty more to sell (if they can!). The other exit is development finance, which is required to deliver the project. The amount required in total as per the valuation report is £21,000,000 inclusive of professional fees, MoneyThing has mentioned that the borrower can source this from a lower cost source. I will add that I don’t think at this stage MoneyThing, even if they wanted to match on price, could fund £21,000,000 even over the course of the couple of years it will take to build. At a total guess the initial drawdown would be multimillions and I cant see how that would ever fill in the current state. Therefore in conclusion I am still happy with this loan. Assuming the funds gathered from sales of units so far has not been spent elsewhere it should be sufficient to repay the loan. I do not see MoneyThing offering development finance as a viable exit and I sure hope for the project sake that they are actively seeking this from other parties.
|
|
|
Post by marcusponds on Mar 6, 2018 14:42:45 GMT
Thanks medelmFWIW, I’ve recently invested as an off plan purchaser of a flat in Liverpool - not these. The payment profile for mine is almost identical to these, so I think you are spot on with your assumptions. My build is overdue, the only compensation being the payment on completion is similarly delayed.
|
|
hazellend
Member of DD Central
Posts: 2,363
Likes: 2,180
|
Post by hazellend on Mar 6, 2018 21:19:22 GMT
I’m thinking about adding my chunk to the secondary market queue just for fun to see how high it can go
|
|
|
Post by 101proof on Mar 6, 2018 22:09:54 GMT
I’m thinking about adding my chunk to the secondary market queue just for fun to see how high it can go i've got about 30k infront of me in the queue, getting there slowly!
|
|
jlend
Member of DD Central
Posts: 1,832
Likes: 1,461
|
Post by jlend on Mar 13, 2018 9:39:56 GMT
|
|