james21
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Post by james21 on Nov 9, 2019 13:37:11 GMT
The lower level is listed for sale by another agency; offers over £400k. So 6 town houses on the upper level (assumed complete?) at about £250k each, and £400k for the lower undeveloped plot.
Total value about £1.9m, compared to a loan of £1.998m? Plus the build out costs etc £1m plus; cant remember
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Monetus
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Post by Monetus on Nov 9, 2019 13:51:12 GMT
So 6 town houses on the upper level (assumed complete?) at about £250k each, and £400k for the lower undeveloped plot.
Total value about £1.9m, compared to a loan of £1.998m? Plus the build out costs etc £1m plus; cant remember I believe the estimated outcome statement originally suggested between 61% and 82% recovery based on both the upper and lower site being built out and all finished within 14 months from July 2018. As the lower site hasn’t even started yet and the upper site build was significantly delayed (additional finance and build costs etc) I am expecting the final outcome to be worse than the “likely worst case” scenario anticipated previously.
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agent69
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Post by agent69 on Nov 9, 2019 14:16:04 GMT
Plus the build out costs etc £1m plus; cant remember I believe the estimated outcome statement originally suggested between 61% and 82% recovery based on both the upper and lower site being built out and all finished within 14 months from July 2018. As the lower site hasn’t even started yet and the upper site build was significantly delayed (additional finance and build costs etc) I am expecting the final outcome to be worse than the “likely worst case” scenario anticipated previously. I assume there's no point in spending too much time looking at the figure in the 'interest expected' column on the website then?
You can understand how some of the big developments can have come off the rails, but this looked like a small straightforward development. Where did it all go wrong
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cedarcourtcapital
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Listening is not the same as understanding
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Post by cedarcourtcapital on Nov 9, 2019 22:00:24 GMT
I see this loan, or at least how it's default has been handled , as a cautionary tale. When development loan goes into default and the developer just walks away leaving his 'security', it often looks tempting for the platform or administrator to try to make the developers projections work.
In this case the previous worst case scenario will not be achieved, so was the right decision made?
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Post by mrclondon on Nov 10, 2019 12:03:19 GMT
I see this loan, or at least how it's default has been handled , as a cautionary tale. When development loan goes into default and the developer just walks away leaving his 'security', it often looks tempting for the platform or administrator to try to make the developers projections work. In this case the previous worst case scenario will not be achieved, so was the right decision made? It remains rare that the option to build out a failed development project is taken by receivers / administrators irrespective of whether mainstream or alternative finance is involved.
So rare, that I'm struggling to come up with many p2p examples to quote here beyond this one and the Plymouth student development progressed by MT. FS Wimbledon is the only obvious example with the 1st charge holder (not FS) opting to progress the build but now unable to sell for enough to cover all the 1st charge never mind the 2nd charge and FS's 3rd charge (laughingly sold as developer extraction of part of the profit). I guess the AC Ipswich student property is similiar as the intent was to hold for 2 years to build a trading history (which when achieved didn't paint a brilliant picture).
Perhaps some of the projects that are built out may achieve a higher recovery for the original lenders than a sell as is would have, but I suspect the end result will be very marginal in most cases, especially taking into account that lender's original capital is tied up for the duration of the build out (and beyond).
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james21
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Post by james21 on Nov 10, 2019 12:44:49 GMT
I see this loan, or at least how it's default has been handled , as a cautionary tale. When development loan goes into default and the developer just walks away leaving his 'security', it often looks tempting for the platform or administrator to try to make the developers projections work. In this case the previous worst case scenario will not be achieved, so was the right decision made? It remains rare that the option to build out a failed development project is taken by receivers / administrators irrespective of whether mainstream or alternative finance is involved.
So rare, that I'm struggling to come up with many p2p examples to quote here beyond this one and the Plymouth student development progressed by MT. FS Wimbledon is the only obvious example with the 1st charge holder (not FS) opting to progress the build but now unable to sell for enough to cover all the 1st charge never mind the 2nd charge and FS's 3rd charge (laughingly sold as developer extraction of part of the profit). I guess the AC Ipswich student property is similiar as the intent was to hold for 2 years to build a trading history (which when achieved didn't paint a brilliant picture).
Perhaps some of the projects that are built out may achieve a higher recovery for the original lenders than a sell as is would have, but I suspect the end result will be very marginal in most cases, especially taking into account that lender's original capital is tied up for the duration of the build out (and beyond).
Completely agree especially the last para, I said at the time the build out option was a mistake, but MT thought it the best for lenders, but fraught with cost over run risks as yet unknown resulting in a final poorer return that a fire sale. Time will tell if they are right. I wanted the fire sale, to use my money elsewhere instead of waiting several years for a conclusion. I dont think this will be done by the spring 2020 projected completion
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toast
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Post by toast on Nov 10, 2019 13:06:49 GMT
I see this loan, or at least how it's default has been handled , as a cautionary tale. When development loan goes into default and the developer just walks away leaving his 'security', it often looks tempting for the platform or administrator to try to make the developers projections work. In this case the previous worst case scenario will not be achieved, so was the right decision made? And the decision on what to do with the lower half of this site is still pending. At this stage it feels like taking on the build is the riskier option and would cause greater delays in returning funds to lenders (over 18 months since administrators were appointed). I guess that needs to be balanced with the size of the haircut seen when selling an undeveloped site...
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cedarcourtcapital
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Listening is not the same as understanding
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Post by cedarcourtcapital on Nov 10, 2019 13:55:49 GMT
I see this loan, or at least how it's default has been handled , as a cautionary tale. When development loan goes into default and the developer just walks away leaving his 'security', it often looks tempting for the platform or administrator to try to make the developers projections work. In this case the previous worst case scenario will not be achieved, so was the right decision made? And the decision on what to do with the lower half of this site is still pending. At this stage it feels like taking on the build is the riskier option and would cause greater delays in returning funds to lenders (over 18 months since administrators were appointed). I guess that needs to be balanced with the size of the haircut seen when selling an undeveloped site... Don't forget paying administrators at their astronomic hourly rate to 'manage' the process certainly eats into any positive outcome. The fact the original developer has walked away shows two things, the folly of the original lending proposition, and the fact there is not the 'profit' to make completion worthwhile. I have no figures hut am willing to bet the administrators or 'management company' brought on board to manage the process costs more than any 'profit' remaining in the proposal. For me continuing the building process is usually akin to platforms favourite practice of applying the appendage on the end of the leg to the beans container.
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Post by Badly Drawn Stickman on Dec 3, 2019 10:44:47 GMT
I have no exposure to this loan, but those who do may be interested in the update on the platform.
Looks a little short of finished to me.
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m2btj
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Post by m2btj on Dec 3, 2019 13:14:33 GMT
I have no exposure to this loan, but those who do may be interested in the update on the platform. Looks a little short of finished to me. Difficult to tell how far this site is from completion. Some internal photos would have given a better idea & I'm surprised there are none provided.
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neeps
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Post by neeps on Dec 3, 2019 13:37:27 GMT
I have no exposure to this loan, but those who do may be interested in the update on the platform. Looks a little short of finished to me. Difficult to tell how far this site is from completion. Some internal photos would have given a better idea & I'm surprised there are none provided. But at least it's not a lump of waste ground like Liverpool!!
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hazellend
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Post by hazellend on Dec 4, 2019 10:54:04 GMT
Difficult to tell how far this site is from completion. Some internal photos would have given a better idea & I'm surprised there are none provided. But at least it's not a lump of waste ground like Liverpool!! Sometimes that’s far preferable
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Post by queenvictoria on Dec 4, 2019 14:52:32 GMT
I have no exposure to this loan, but those who do may be interested in the update on the platform. Looks a little short of finished to me. Difficult to tell how far this site is from completion. Some internal photos would have given a better idea & I'm surprised there are none provided. Those photos, and the offhand update of 20th November, are very disappointing. The site looks quite different now if you compare it to the photos of the show home (admittedly this was only of the show home not the whole upper site but an impression was created) which were included in the update of 19th July and in the Rightmove listing circulated on 23rd August. The site looks as if it has badly managed by the contractor and poorly supervised by Moorfields/MT. Are those exposed unpainted softwood doors and windows I can see? Surely not... Surely not. Please tell me I am mistaken. I fear the Estimated Outcome Statement promised for the end of December will bring more bad news. This platform goes from bad to worse.
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brush
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Post by brush on Dec 4, 2019 15:20:02 GMT
You are not mistaken majesty, some are primed most are not and also includes fascia. From a retired painter and decorator.
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Post by queenvictoria on Dec 4, 2019 19:31:40 GMT
You are not mistaken majesty, some are primed most are not and also includes fascia. From a retired painter and decorator. Should you not now be ex-Brush then, my good man? No doubt, you will share my horror at the state of affairs we see before us. If one still had one’s powers (but sadly deceased) one would command you back to work to finish what others have left, so neglectfully, unfinished.
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