Jump to content
House Price Crash Forum

How To Take Advantage Of A Farked Up Valuation

Recommended Posts

True story.

A friend of mine owns nursing homes. He borrowed alot of money to upgrade parts of the business from carehome standard, in the expectation that specialised care for the elderly (alzheimers, all that) was the future. Sound business projection. But he borrowed and upgraded just before the bank bust, so paid top dollar and fixed the loan repayments at about 5%. Plus he admits he took his eye off the ball during redevelopment, which led to management problems and the loss of a great chunk of revenue.

So he got credit crunched. Bank (now mostly state owned) had stern warnings and threatened to withdraw the loan facility. Much anguish. Ouch.

But he fixed the management problem, restored revenue, and over the past two years has come to an understanding with the bank.

The loan is still at 5%, and he wants to refinance. It will cost £300k to get out and move to another bank, and that depends on a favourable valuation of the business. So he went to one of the big healthcare valuers - household name - and they came back with a valuation below what he was expecting. His accountants looked at the paperwork and spotted many blunders eg. a typo that understated a certain block of annual revenue by £500k. Very embarrassing, hohoho.

He got on to the valuer, but no response for three weeks. Eventually he spoke with the relevant manager, who said, "Frankly, I was just hoping you wouldn't sue us." Really? Certain views were exchanged.

Result: stipulated valuation secured (no questions asked), bank approval pending.

I suspect the downward bias of the valuation has a certain truth, and that my friend suffers an element of, "It can't be worth less than I paid for it!" But if you squeeze out the "right" valuation then many things become possible.

Edited by okaycuckoo

Share this post

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Recently Browsing   0 members

    No registered users viewing this page.

  • 396 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.