in trouble

hi all
I am posting this here as information only
there are alot of people out in this brown land of ours that are in alot of trouble.
they may well have a liquidator, receiver or admin either on them or on their business
well there is alot of other ways out.
and one area that is not mentioned here is debt negotiation and its a growing area as the market melts or has melted.
now alot of people here may not like to hear that alot people have got these issues and before you flame the post with
thats there own fault in alot of cases its not.
I have alot of people that have banks stopped funding the site
presales that are well below now the purchase price, if they go thru with the purchase.
even business that have issues with very high lvrs or margin calls.
and even builders that have liquidated leaving the developer holding the can

so what do we do
simply we sit on the other side of the desk and reduce the exposure of the client and in alot of case remove the fixed and floating charges or personal quarantees.
so why put this up here
simple there are heaps of investors or developers that have never known that this is available most would not them would not have a clue.
I was asked by a receiver why some one like this is used
simple again
who can negotiate the deal
the receiver
not likely they have the funder to look after
the legals
not likely they don't give advice
the client
well most of the time these people are in such a state that they don't know which way is up and all they want is a way out.
so if you are in this position
there is other ways of doing things and this is just information
to go look.
I find heaps of people that simply do not know where to turn well hope this gives you some ideas
good post Lawrence. thanks.

here's one for you.

one developer - 14 unit site and a 9 unit site. fully pre-sold, NONE are lo-doc, all being built and sold under the sworn valuation rate.

bank HO pulls pin because "oh, we don't fund developments anymore"...."no that's right, even across retrospective deals"..."yes, we're aware that credit mgmt & state HO have signed off on it"...

have they got their head up their ar*se?

i reckon banks are tightening up lending to tighten up the market. no houses = higher demand = higher prices which brings everyone's LVR down.

thought for the day?
hi Blue Card!
thats the type of deal
now we do not get the funding
what we do is bring the debt level down to a position that the development will be able to be done under the market today.
the bank that says we don't development any more is the main part of our talking to them
so thats great
we love these guys
they hate me but I love them.
we have been asked will we go to tassi
the answer is yes
we do not get funding brokers do that
nor are we interested in get a commision for funding we are just reducing debt.
we hit them, we beat them and then the client has to pay them.
are we good at what we do
well here's a few examples
5.7 mil debt to 2.5mil payout
3 mil to 950k
8 mil to 3.5mil
5 mil to 2.5 but 2.5 is also a structured deal to pay 700k then the rest
3mil to 1.6mil
8mil to 3.2mil
and thats just the ones off my head.
do we charge if we make no saving
do we take a job unless we think we will make a saving
do we care about funders or receivers
no( nor do they care about us)(so its mutual)
do we need new clients
no we have alot
will we help you
depends if there is a saving and we wish to help
and that coin is up in the air as its up to me and a couple of others.

people always say your last deal is your best deal
well that maybe true
but there is three things we don't do
1 we will not cover a clients costs no thats up to them
2 we will not take a deal unless we think we can do it( waste of our time)
3 we will stay with the deal until the deal is done.
the last is a very interesting one as we will not leave a client unless we have done the best by the client even if the client does not agree with the way we do the deal
if we leave a client
that client must be in a better position then when we took on the deal
or we don't take on the client.
as I have said many times maybe not here
but we not a charity we do not give out cash in any form.
we supply a service and I think a good service that not alot can supply.
and your post is the ones that sit right in our basket.
now is this looking for work
no( as we are looking more clients if we find thats great)IF you need us we are here
we are not looking for work but there is hell of alot of people looking for us.
there are people out there pulling there hair out asking ??
what can i do ??
they are about to take the house.
and in that market we assist.
we hope you well and the sign I changed
here to help
oh and most recievers hate me and you maywell be added to the list but thats not something that I see as part of doing business so before You become a client you must understand I do not mined being hated it comes with my role
I am a duck so it washes over me like water
I can't be insulted
in any language
nor can you ask the sillyest question
thats me to educating u

ask away
just don't ask question
like how did u do this
the answer is simple thats what I do ??
I have a question for you GR...

Does your company have a website, and if so, can you provide a link to it?

was reading an interesting article yesterday about how there is massive underbuilding in the hunter - for what is required at current population growth levels only about 1/3 of this number is being lodged/approved at council.

wasn't reported, but i then wondered how many of those actually approved are being built - i know our piddly project was approved 2 years ago and we haven't even started thinking about demolishing the old tenanted house because we can't borrow the money to build atm.

the article was blaming the government - and i agree at some level that the levies put on new building is excessive - but the majority of the reason developers aren't building is they firstly, cannot get finance, and secondly that building costs have risen but end value hasn't so there isn't so much money to be made in building to sell.

i know i looked at a small 2 house potential - existing house on a large corner block with da in place for 2nd house to be built on the back - but when i did the sums it wouldn't be profitable to build to either sell or hold. wasn't so much the initial purchase cost, but rather the building cost of the 2nd house.

i know some companies are marketing build costs at under $150k for a 3/2/2, but by the time one adds subdivision costs, driveway, fence, landscaping, curtains/blinds, carpet etc, the cost rises to around $200+k to finish. still doesn't sound a lot, but when looking at a resale value of around $380, once one takes out the intial purchase cost of the "half yard" doesn't leave a lot of fat in the deal.
hi JIT
no website but keep an eye out and will send thru a link when its done.
and will let you know how its all going
we are using a structured system so we get the person out of trouble how ever or what ever is needed on that side
we then bring in a couple of commercial brokers that organise the funding to move the project forward
and then we are using smsf to buy end product at a discount to market.
because we are starting from a different base the difference can be handed on.
in most cases the developer was not the one at issue but there are alot of issues that need to be gone thru
there is no point taking a client out of the poo he/she is in now and they fall back in so we have to have a exit strategy and this is a very important part and that can take alot of time.

the hunter has had its issues because there were a couple of funds up that way that went west and they were the second mortgagee so that has been a problem for a few groups.
margins is a big problem but there are alot of builders doing d&c and turn keys at the moment so if the project on the numbers is fine then there are still was to get these projects moving.

wasn't so much the initial purchase cost
for these clients this is not an issue as they already bought and in alot of cases are holding more then two houses.
two house sites are not an issue as you can get the banks to sit while you finish but sites over 1 mil is where the problems start.
if you work it right
say a site and there is one at the moment with 3 houses to be built
its 60% complete
the receiver is holding 2 mil in debt.
and there is about 2 mil in rectification work and completion.
each house to sell is about 1.5 to 2 mil when finished.

noow on the numbers that looks still doable just no profit at the end or a minor loss.
the bank stopped funding 12 months ago and now its new owner has stopped funding construction all together and as they need to borrow more its a new loan.
now the site had three mortgagees the first on the land and the second on the building and a third cash to fund while the second decided if they would carry on funding ( this cash was for 6 months its been 18 months)
the first fund is itself in receivership and has a receiver
the second has stopped funding
and the third has very little money to put up and is private with about 600k in the site now and will get zip
the sit.
throw all that together.

add that there are people trying to find this person and that and issue writs.

now put yourself in that developers seat.
and thats the type of client that needs this type of company

I can tell you about another client
this client went and got 150% debt coverage in presale
organised the loan and all was going well until his funder went west and closed down
he was asked to repay 5 mil and the site value went from 8 mil to 3 mil next to over night they put in a receiver for the fund
and then a receiver on his company
he went to the market to get assistance and what he did next was gassing himself.
I never met him as it happened before I got involved.
is this unusual
some people can't take pressure.
and they see this as the only way out
well its not
if the deal on the table now was available then
he would be going to the national park for a picnic its that simple
people think that because they have an issue that the whole world is falling down
well its not.
its not even close
I have had a couple of people that have told me that taking these problems off their shoulders is like rebirth they feel better about themselves and they can see a light where there was light but just could not see.