Bank imprudent lending 90 times salary / incorrect "buy-to-let" valuation €17m / acre

Status
Not open for further replies.
anyone know of the next most expensive property outside of Dublin? The 17 million an acre in 2004 is a record by how much?


I know I shouldn't feed the troll, but.....

Tiny terraced house in Cork city sold in 2006 for 220,000. Footprint wasn't more than 400 sq ft which I make about €24m per acre.

Anyone want to work out what apartments in Bandon or somewhere would have been "per acre"?
 
Thanks for your constructive criticism. I think the success of the venture will be making it in to a fun, educational experience for visitors. The visitors / tourists may not be interested in knowing if the purchaser in 2004 was attending a consultant psychiatrist or not. And if they did know that, so what? the best of people may need to visit such a person at some stage in their lives. Look at Ben Dunne - he was a different league of businessman, but he put his hands up and said he was sorry and he was unwell once, and he meant it. People forgive his behaviour then. I think the tourists are always interested in seeing things which are very unusual, bizarre, amusing, etc. Framed copies of different valuations will be very informative and help sell pieces of what was once Irelands most valuable land or whatever. The thing will be to make it unique and fun. See my previous post.

As regards the estate agent who sold the property, his job was to get the highest price so he cannot really be faulted. Irrespective of the price paid or potential link between parties involved ( its none of my business to probe in to such conspiracy theories ) the fact remains the building society valuer valued the property as he did, and the building society lent the money. Yes the borrower behaved very foolishly, but it was the building society which was supposed to act professionally and competently in lending such large amounts of money. They have many questions to answer yet. The leprechaun ( or person in period costume from 209 years ago ) will have to think up some joke about the 3 utility rooms on the building society valuation but which were not there in real life ! Its going to be fun. Besides, the town is crying out for tourist attractions during the season. And it may help to pay back the loan. Any income from the property is better than none.
 
Last edited:
visitors / tourists may not be interested in knowing if the purchaser in 2004 was attending a consultant psychiatrist or not. And if they did know that, so what? the best of people may need to visit such a person at some stage in their lives.
My comments weren't meant in any way to cast aspersions on the buyer or the fact that they were having mental health issues. I just think that a large part of this story was caused by the mental health issues, not the celtic tiger per se - sure, the lenders' largesse (and valuation stupidity) was driven by the celtic tiger but this is not a classic celtic tiger tale of greed on the part of the borrower combining with greed on the part of the lender. Knowingly (my gut feeling) or unknowingly (I'll be charitable) by the other parties, the buyer was taken advantage of. The buyer had assets at the time and was probably seen as a soft touch for a cold call - by people who knew him or of him - I don't imagine many other out of work people earning 15K a year were targetted with 1.4M properties. The more I think about it, the nastier I find the whole story but it is not a classic celtic tiger tale.
 
To Dermott in particular. I like your questions ,but as this general {mortgage mess} unravels ,this story is quite believable. Our poster may have his agenda ,but experience is showing us that the plethora of players Bank/Broker/Valuer/engineer/ all fed off the Hubris.. Whilst this customer was {unwise} methinks he was led by {professionals} who negated their duty of care.
 
I know I shouldn't feed the troll, but.....
I can assure you I'm not a troll.

Tiny terraced house in Cork city sold in 2006 for 220,000. Footprint wasn't more than 400 sq ft which I make about €24m per acre.

The terraced properties I'm referring to, in a town a fraction the size of Cork, have a footprint of less that 400 sq ft each and yet they were valued in Jan 2005, in very poor condition in all fairness, at an average of €470,000 by the building soc. valuer. They had back "gardens" though, albeit very overgrown. I assume the one you mention in Cork had a back garden / space out the back? If not, not you have a link or source, even an estate agent you can p.m me the details of so I can pass it on to be verified please? I agree €220,000 was closer to the expected price for terraced houses then, and the independent valuation in late 2005 was much closer to that than the €470,000.
 
Honest, I'm going to be honest with you. Nobody is going to be interested in seeing some silly terraced houses as a monument to how much they cost. (and as others have pointed out to you we on AAM are really bored with how much it cost - we've seen too much on AAM, and don't need you to point it out every second post, all we want to do is try and sort out the problem if possible)

Tourists and Irish people have far better things to be doing or seeing. So the original purchasers needs to get over it. He made a mistake and this scheme is not going to right that. Most American's that come to Ireland are on bussed tours with specific destinations in mind (Bunratty, Blarney etc). I cannot even believe I'm going into this.

Could you please tell me why the bank has not taken back the properties. Surely they are writing horrible letters to the purchaser? I really do hope the purchaser is not being persuaded once again by others that this mad cap scheme is a good idea. Seems to me it's another way to get at his remaining money. If it's you than you really need some proper professional financial and medical advice.
 
I went to Amsterdam and there was a queue around the block of about 500 people to see Anne Franks house, and there was nothing specatular to see in it after all the waiting. Worth seeing all the same. I'm not saying the attraction will have the same pulling power, but still, just goes to show what can be done.

According to Wikipedia, Anne Frank is "one of the most discussed Jewish victims of the Holocaust" whose "diary has been the basis for several plays and films". When you Google her you get 71 million hits. Not meaning to pour cold water on the idea, but I'd hate to see someone who has already been financially disappointed put a lot of effort into something that sounds, on the face of it, like it could be a total flop. Best of luck if it goes ahead.
 
It is seems to me, that OP started this topic only to get an approval on this mad idea about museum...

if this is a case- please- NO, NO, NO!
this idea sound for me even worse, then original "buy to letderelict cottages" scheme...

even biggest and famous museums like Uffizi's in Florence won't survive without governments donations, not to mention Anna Frank museum...

if you really a good friend of a person in such a horrific financial situation, you have to talk him off this idea and start to think abound bankruptcy option ...

 
A museum will bring all kind of issues.

He will have to get liability insurance. He'll have to get tickets and promotional material printed as well as the certificates to certify the authenticity of the soil being sold.

He'll have to pay VAT on tickets and sales from the proposed gift shop.

He'll have to employ people to wear the period costume and run the gift shop and coffee area. Pay them their wages, deduct PAYE, USC, PRSI and all the other hassles that come with employing people.

He'll have to ensure that local knackers don't start taking an interest in the place and start causing trouble, hanging round when it is shut, breaking in to the gift shop, graffittiing, starting fires, using drugs.

He'll need to make sure the coffee area meets all the health and safety requirements and that you have proper toilet facilities, disabled access, fire escapes throughout.

All I can do is wish him all the best for it. If, after having done all the above, he has enough of a trade coming through the door to make anything to pay back the building society, after having taken a manager's wage of course, then good for him.
 
He'll have to pay VAT on tickets and sales from the proposed gift shop.
The person leasing it / running it will not have to register for vat until turnover reaches a certain threshold.

even biggest and famous museums like Uffizi's in Florence won't survive without governments donations, not to mention Anna Frank museum.

I am not saying the new tourist attraction will be like the Anne Frank house. She and her attic hideaway are such an iconic story from WW2 that nobody could compete with that. However, in 2011, the Anne Frank Foundation used the €14.3 million ($18.9 million) in revenues from tickets and merchandising to pay for its staff and activities worldwide, including exhibitions from Berlin to Buenos Aires, brochures against racism and extremism and educational materials. However, its not envisaged it will be that type of museum. Its not true when you say Anne Franks house would not survive without government donations. Links are available, easily googled.

The property in the west has to capitalise on its own unique strengths. You think nobody will buy "lucky Irish soil"/ The most valued Irish soil ever? Well, do you think anyone would buy ordinary Irish soil? Did you know in the States, Irish-Americans ( and there are 40 million of them ) sometimes throw packets of Irish soil on the graves there. http://www.nytimes.com/2007/03/17/nyregion/17dirt.html?_r=0

If others can sell millions of dollars worth of ordinary Irish soil, what do you think about soil which (the bank thought!) must have had gold dust in it? lol. Lucky magic soil, with a genuine leprechaun cottage on top, with its 5'6 inch high doorways. Soil which has the power to make 3 utility rooms (which were on the bank valuation) vanish without a trace or explanation.

Its thought the person who may be leasing may envisage it only being open for a few hours each day during the tourist season. I gather it may have lunchtime performances as lunchtime is when some coaches deposit their tourists for lunch and shopping nearby in the town. An up and coming comedian ( he's still a third level student but he's really good and has theatre experience ) is going to have a field day ....it will not be difficult to make fun of the celtic tiger story, the buy-to-let property the bank thought was "in good shape and good security", bank mismanagent etc. Special concession rates, if not free entry, will be offered to bankers etc, as everyone loves them. :).

Who would have thought anyone 30 years ago selling Irish drinking water would succeed? Who thought Mrs Browns boys would work in the UK? Who would have thought selling lucky Irish soil to homesick Americans would never succeed?

Rather than the borrower go to England now, " Whats another year"? as Johnny Logan would say. If there is no risk to the borrower, and he's going to England sooner or later, maybe he will give it a go. Nothing left to lose, and all that. It'll be fun if nothing else.

Surely they (the bank) are writing horrible letters to the purchaser?
For one thing, I think they are a bit embarassed they never asked themselves or him how was he going to pay all that money back, the 2.5 million inc interest out of after-tax earnings over 20 years. He has asked them that, looked for calculations and they cannot answer. Plus he has already paid them more than the property was ever worth in reality.

This is my last post in this thread, because its repeating itself, and out of respect to Mr. Burgess and the site. The borrower can make up his own mind - I do not think I've said anything that will not be going public. Thank you all.
 
it is seems to me, that op started this topic only to get an approval on this mad idea about museum...

If this is a case- please- no, no, no!
This idea sound for me even worse, then original "buy to letderelict cottages" scheme...

Even biggest and famous museums like uffizi's in florence won't survive without governments donations, not to mention anna frank museum...

If you really a good friend of a person in such a horrific financial situation, you have to talk him off this idea and start to think abound bankruptcy option ...


+1
 
Plus he has already paid them more than the property was ever worth in reality.

What are you saying here. That he has paid them a sum equal to it's current value of 75K. Or has he paid them more than that? Would it be possible for you to not talk about the museum for a while and just concentrate on the figures?
 
Once the museum is up and running, come back and let us know. I would be very interested to go and see it.
 
What are you saying here. That he has paid them a sum equal to it's current value of 75K.
No. I said "more than the property was ever worth in reality." He paid them more than it was independently valued at in late 2005, which was a hell of a lot more than 75k. Even though he has paid a seven figure sum ( i.e. over €1m. ) inc interest the "arrears unit" has still been pressurising him to increase payments, and not willing to answer questions - even those sent by registered post - fully or properly. Shameful. I am not going to go in to specifics or clarify any more points. This is definitely my last post in this thread, thanks.
 
Status
Not open for further replies.
Back
Top