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CAFC Ltd annual report 20/21

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  • Options
    Rothko said:
    Yes when Roland dies
    How will that solve anything? His children will inherit and it could then get very messy - just ask anyone who’s been through a bereavement with inheritance of property involved.
  • Options
    If we still have reasonable time on the lease when RD pops his clogs it can't really get messy for us as they have no power to do anything.  It will purely depend on the views of whatever child inherits the goodies.  Sadly RD is too rich so whomever it was would no doubt have inherited a whole stack load of assets and not need to cash in The Valley for a new boat and car as there will be other, more liquid assets.

    Maybe RD will gift the Valley to the Charlton Trust or the museum in his will as a final act of repentance.
  • Options


    Maybe RD will gift the Valley tothe museum in his will as a final act of repentance.
    That's the plan
  • Options
    Let me take a stab at what I think Dave is trying to get across.  The Valley is a single use asset with a single potential buyer.  There is no competitive marketplace for its sale.  Roland doesn’t think that his asking price is actually it’s fair vale - he is just throwing out a number to use as a negotiation tactic with TS. So why not lower his price and get the deal done so he can invest it as others have pointed out?  Well for one, it is a sunk cost to him with minimal if any cash expenditures to maintain the lease.  However more importantly let’s say for arguments sake there is a 10 million difference between what TS wants to pay and what Roland thinks the actual valuation of the property is.  That’s 5-10 years of returns if he were to take the lower price and invest it in the stock market.  Roland is worth hundreds of millions (doesn’t need it for liquidity) and he is an egomaniac so he is willing to wait thinking he can get an overall higher return in negotiations with TS.  There may come a tipping point where Roland will begin true negotiations for the sale but it won’t be until we get closer to a trigger point in the lease. At that point, Roland thinks he will have more leverage betting that TS will cave to fan pressure to keep the Valley and will up the price closer to his actual valuation.  However, don’t be surprised that when we get closer to a true negotiation date that we start hearing leaked stories of TS exploring options away from Valley as that is his only real leverage in negotiations.  My guess is eventually some sort of deal will get done but there will be a lot of angst on this board during the negotiation process as we will walking a tightrope about concerns of losing the Valley
  • Options
    Scoham said:
    TS has loaned the club £12m so far, including £1.5m this season.


    So another owner who loans.  I must try that one when I buy something but don't  want the cost. 
    Have you ever heard of tax efficiency? Sometimes you do come out with some classics ffs
  • Options
    Off_it said:
    Dave Rudd said:
    Off_it said:
    Dave Rudd said:
    Dave Rudd said:
    IdleHans said:
    He absolutely has an incentive to sell if he can generate more than the rent from investing the proceeds. If we say the property value is £30m then he's getting a return of just 1.7%, plus whatever capital growth there might be before global warming floods The Valley. Hardly a fortune, and easily beatable.
    Except he thinks it's worth £40-50 million ... so he won't sell in the foreseeable future.

    1.7% indefinitely (for no further outlay) will make sense to him.  Free money.

    Meanwhile his investment grows in value (in his mind).  What did it cost him?  £14 million?
    You're making your argument even worse.
    If he's getting £500K pa on £50M, that's a 1% return.
    This is hard work.  He didn't pay £40 -50 Million.  That's his valuation.

    He spent (I think) something like £14 Million ... so, if you need a % return on his investment, that would be about 3.5%.

    But that's not the point.

    The point is that he is getting £500k per year for doing nothing.  And maybe his valuation will eventually prove to be correct as the assets appreciate.  It might take a while, but he won't care about that.

    No incentive to sell until he gets the price he thinks it's worth.


    I'd also go with (c) from above.


    It is hard work mate. Because no matter what people are telling you you still ain't getting it.

    Say you bought something for £14k and spent £50k doing it up.

    You then leased it to me for £500 per year.

    Still think you're getting that £500 for "free"?
    Precisely.
    If anyone wants to lend me £64K, I'll happily give them back £500 annually for free that they can earn for doing nothing.

    I'll invest elsewhere and be quids in.
    Painful.

    I give up.
    I think you should.

    But before you go, can you let me have a grand please? I will pay you back £10 a year. "Free money" for you!

    Yes, let’s do it.

    What do I get for my £1000?  To keep your comparison going, it will need to be an asset which only appreciates in value, and for which you are entirely responsible for maintenance, repair etc.

    And ‘no’ … I don’t want your caravan.

    And don’t worry about paying me back.  I have the asset … remember?  What you can do is bung me a regular sum for the privilege of using the asset.

    Let’s call it ‘free money’, shall we?
  • Options
    Step forward Rolands financial adviser …..Dave Rudd 


    I wish … huh?

    Roland gets The Valley etc and I get Off_it’s caravan.

    Great.
  • Options
    Dave Rudd said:
    Off_it said:
    Dave Rudd said:
    Off_it said:
    Dave Rudd said:
    Dave Rudd said:
    IdleHans said:
    He absolutely has an incentive to sell if he can generate more than the rent from investing the proceeds. If we say the property value is £30m then he's getting a return of just 1.7%, plus whatever capital growth there might be before global warming floods The Valley. Hardly a fortune, and easily beatable.
    Except he thinks it's worth £40-50 million ... so he won't sell in the foreseeable future.

    1.7% indefinitely (for no further outlay) will make sense to him.  Free money.

    Meanwhile his investment grows in value (in his mind).  What did it cost him?  £14 million?
    You're making your argument even worse.
    If he's getting £500K pa on £50M, that's a 1% return.
    This is hard work.  He didn't pay £40 -50 Million.  That's his valuation.

    He spent (I think) something like £14 Million ... so, if you need a % return on his investment, that would be about 3.5%.

    But that's not the point.

    The point is that he is getting £500k per year for doing nothing.  And maybe his valuation will eventually prove to be correct as the assets appreciate.  It might take a while, but he won't care about that.

    No incentive to sell until he gets the price he thinks it's worth.


    I'd also go with (c) from above.


    It is hard work mate. Because no matter what people are telling you you still ain't getting it.

    Say you bought something for £14k and spent £50k doing it up.

    You then leased it to me for £500 per year.

    Still think you're getting that £500 for "free"?
    Precisely.
    If anyone wants to lend me £64K, I'll happily give them back £500 annually for free that they can earn for doing nothing.

    I'll invest elsewhere and be quids in.
    Painful.

    I give up.
    I think you should.

    But before you go, can you let me have a grand please? I will pay you back £10 a year. "Free money" for you!

    Yes, let’s do it.

    What do I get for my £1000?  To keep your comparison going, it will need to be an asset which only appreciates in value, and for which you are entirely responsible for maintenance, repair etc.

    And ‘no’ … I don’t want your caravan.

    And don’t worry about paying me back.  I have the asset … remember?  What you can do is bung me a regular sum for the privilege of using the asset.

    Let’s call it ‘free money’, shall we?
    I wouldn’t worry I think every else clearly gets what your saying 👍🏼
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  • Options
    Dave Rudd said:
    Off_it said:
    Dave Rudd said:
    Off_it said:
    Dave Rudd said:
    Dave Rudd said:
    IdleHans said:
    He absolutely has an incentive to sell if he can generate more than the rent from investing the proceeds. If we say the property value is £30m then he's getting a return of just 1.7%, plus whatever capital growth there might be before global warming floods The Valley. Hardly a fortune, and easily beatable.
    Except he thinks it's worth £40-50 million ... so he won't sell in the foreseeable future.

    1.7% indefinitely (for no further outlay) will make sense to him.  Free money.

    Meanwhile his investment grows in value (in his mind).  What did it cost him?  £14 million?
    You're making your argument even worse.
    If he's getting £500K pa on £50M, that's a 1% return.
    This is hard work.  He didn't pay £40 -50 Million.  That's his valuation.

    He spent (I think) something like £14 Million ... so, if you need a % return on his investment, that would be about 3.5%.

    But that's not the point.

    The point is that he is getting £500k per year for doing nothing.  And maybe his valuation will eventually prove to be correct as the assets appreciate.  It might take a while, but he won't care about that.

    No incentive to sell until he gets the price he thinks it's worth.


    I'd also go with (c) from above.


    It is hard work mate. Because no matter what people are telling you you still ain't getting it.

    Say you bought something for £14k and spent £50k doing it up.

    You then leased it to me for £500 per year.

    Still think you're getting that £500 for "free"?
    Precisely.
    If anyone wants to lend me £64K, I'll happily give them back £500 annually for free that they can earn for doing nothing.

    I'll invest elsewhere and be quids in.
    Painful.

    I give up.
    I think you should.

    But before you go, can you let me have a grand please? I will pay you back £10 a year. "Free money" for you!

    Yes, let’s do it.

    What do I get for my £1000?  To keep your comparison going, it will need to be an asset which only appreciates in value, and for which you are entirely responsible for maintenance, repair etc.

    And ‘no’ … I don’t want your caravan.

    And don’t worry about paying me back.  I have the asset … remember?  What you can do is bung me a regular sum for the privilege of using the asset.

    Let’s call it ‘free money’, shall we?
    I get what your saying mate but I think the point being made is the ROI is terrible. Plus when you say the valley is an asset that is only increasing. Is it though ? How much more is it worth today than it was 2 years ago do you think ? On normal expected returns for commercial property £500k pa would value the valley at £17-£20m i imagine
  • Options
    AndyG said:
    Dave Rudd said:
    Off_it said:
    Dave Rudd said:
    Off_it said:
    Dave Rudd said:
    Dave Rudd said:
    IdleHans said:
    He absolutely has an incentive to sell if he can generate more than the rent from investing the proceeds. If we say the property value is £30m then he's getting a return of just 1.7%, plus whatever capital growth there might be before global warming floods The Valley. Hardly a fortune, and easily beatable.
    Except he thinks it's worth £40-50 million ... so he won't sell in the foreseeable future.

    1.7% indefinitely (for no further outlay) will make sense to him.  Free money.

    Meanwhile his investment grows in value (in his mind).  What did it cost him?  £14 million?
    You're making your argument even worse.
    If he's getting £500K pa on £50M, that's a 1% return.
    This is hard work.  He didn't pay £40 -50 Million.  That's his valuation.

    He spent (I think) something like £14 Million ... so, if you need a % return on his investment, that would be about 3.5%.

    But that's not the point.

    The point is that he is getting £500k per year for doing nothing.  And maybe his valuation will eventually prove to be correct as the assets appreciate.  It might take a while, but he won't care about that.

    No incentive to sell until he gets the price he thinks it's worth.


    I'd also go with (c) from above.


    It is hard work mate. Because no matter what people are telling you you still ain't getting it.

    Say you bought something for £14k and spent £50k doing it up.

    You then leased it to me for £500 per year.

    Still think you're getting that £500 for "free"?
    Precisely.
    If anyone wants to lend me £64K, I'll happily give them back £500 annually for free that they can earn for doing nothing.

    I'll invest elsewhere and be quids in.
    Painful.

    I give up.
    I think you should.

    But before you go, can you let me have a grand please? I will pay you back £10 a year. "Free money" for you!

    Yes, let’s do it.

    What do I get for my £1000?  To keep your comparison going, it will need to be an asset which only appreciates in value, and for which you are entirely responsible for maintenance, repair etc.

    And ‘no’ … I don’t want your caravan.

    And don’t worry about paying me back.  I have the asset … remember?  What you can do is bung me a regular sum for the privilege of using the asset.

    Let’s call it ‘free money’, shall we?
    I get what your saying mate but I think the point being made is the ROI is terrible. Plus when you say the valley is an asset that is only increasing. Is it though ? How much more is it worth today than it was 2 years ago do you think ? On normal expected returns for commercial property £500k pa would value the valley at £17-£20m i imagine
    Which is about right.
  • Options
    edited April 2022
    Dave Rudd said:
    Off_it said:
    Dave Rudd said:
    Off_it said:
    Dave Rudd said:
    Dave Rudd said:
    IdleHans said:
    He absolutely has an incentive to sell if he can generate more than the rent from investing the proceeds. If we say the property value is £30m then he's getting a return of just 1.7%, plus whatever capital growth there might be before global warming floods The Valley. Hardly a fortune, and easily beatable.
    Except he thinks it's worth £40-50 million ... so he won't sell in the foreseeable future.

    1.7% indefinitely (for no further outlay) will make sense to him.  Free money.

    Meanwhile his investment grows in value (in his mind).  What did it cost him?  £14 million?
    You're making your argument even worse.
    If he's getting £500K pa on £50M, that's a 1% return.
    This is hard work.  He didn't pay £40 -50 Million.  That's his valuation.

    He spent (I think) something like £14 Million ... so, if you need a % return on his investment, that would be about 3.5%.

    But that's not the point.

    The point is that he is getting £500k per year for doing nothing.  And maybe his valuation will eventually prove to be correct as the assets appreciate.  It might take a while, but he won't care about that.

    No incentive to sell until he gets the price he thinks it's worth.


    I'd also go with (c) from above.


    It is hard work mate. Because no matter what people are telling you you still ain't getting it.

    Say you bought something for £14k and spent £50k doing it up.

    You then leased it to me for £500 per year.

    Still think you're getting that £500 for "free"?
    Precisely.
    If anyone wants to lend me £64K, I'll happily give them back £500 annually for free that they can earn for doing nothing.

    I'll invest elsewhere and be quids in.
    Painful.

    I give up.
    I think you should.

    But before you go, can you let me have a grand please? I will pay you back £10 a year. "Free money" for you!

    Yes, let’s do it.

    What do I get for my £1000?  To keep your comparison going, it will need to be an asset which only appreciates in value, and for which you are entirely responsible for maintenance, repair etc.

    And ‘no’ … I don’t want your caravan.

    And don’t worry about paying me back.  I have the asset … remember?  What you can do is bung me a regular sum for the privilege of using the asset.

    Let’s call it ‘free money’, shall we?
    You think properly, especially single use properly, only ever increases in value? 

    You should have a good read on Return on Investment. 1% seems bloody awful. 
  • Options
    Let me take a stab at what I think Dave is trying to get across.  The Valley is a single use asset with a single potential buyer.  There is no competitive marketplace for its sale.  Roland doesn’t think that his asking price is actually it’s fair vale - he is just throwing out a number to use as a negotiation tactic with TS. So why not lower his price and get the deal done so he can invest it as others have pointed out?  Well for one, it is a sunk cost to him with minimal if any cash expenditures to maintain the lease.  However more importantly let’s say for arguments sake there is a 10 million difference between what TS wants to pay and what Roland thinks the actual valuation of the property is.  That’s 5-10 years of returns if he were to take the lower price and invest it in the stock market.  Roland is worth hundreds of millions (doesn’t need it for liquidity) and he is an egomaniac so he is willing to wait thinking he can get an overall higher return in negotiations with TS.  There may come a tipping point where Roland will begin true negotiations for the sale but it won’t be until we get closer to a trigger point in the lease. At that point, Roland thinks he will have more leverage betting that TS will cave to fan pressure to keep the Valley and will up the price closer to his actual valuation.  However, don’t be surprised that when we get closer to a true negotiation date that we start hearing leaked stories of TS exploring options away from Valley as that is his only real leverage in negotiations.  My guess is eventually some sort of deal will get done but there will be a lot of angst on this board during the negotiation process as we will walking a tightrope about concerns of losing the Valley
    Agree mostly but that sunk cost was still a cost, it wasn't free.

    And as others have argued there is also the opportunity cost.

    Where I disagree is that RD doesn't see it as a realistic price. 

    I doubt that very much and annoyingly Quisling Amis and Crook Southall reinforced his belief by agreeing that value.
  • Options
    Let me take a stab at what I think Dave is trying to get across.  The Valley is a single use asset with a single potential buyer.  There is no competitive marketplace for its sale.  Roland doesn’t think that his asking price is actually it’s fair vale - he is just throwing out a number to use as a negotiation tactic with TS. So why not lower his price and get the deal done so he can invest it as others have pointed out?  Well for one, it is a sunk cost to him with minimal if any cash expenditures to maintain the lease.  However more importantly let’s say for arguments sake there is a 10 million difference between what TS wants to pay and what Roland thinks the actual valuation of the property is.  That’s 5-10 years of returns if he were to take the lower price and invest it in the stock market.  Roland is worth hundreds of millions (doesn’t need it for liquidity) and he is an egomaniac so he is willing to wait thinking he can get an overall higher return in negotiations with TS.  There may come a tipping point where Roland will begin true negotiations for the sale but it won’t be until we get closer to a trigger point in the lease. At that point, Roland thinks he will have more leverage betting that TS will cave to fan pressure to keep the Valley and will up the price closer to his actual valuation.  However, don’t be surprised that when we get closer to a true negotiation date that we start hearing leaked stories of TS exploring options away from Valley as that is his only real leverage in negotiations.  My guess is eventually some sort of deal will get done but there will be a lot of angst on this board during the negotiation process as we will walking a tightrope about concerns of losing the Valley
    Agree mostly but that sunk cost was still a cost, it wasn't free.

    And as others have argued there is also the opportunity cost.

    Where I disagree is that RD doesn't see it as a realistic price. 

    I doubt that very much and annoyingly Quisling Amis and Crook Southall reinforced his belief by agreeing that value.
    I think you are being a tad wrong on your thinking there mate. Roland is alot of things but an idiot he isnt. Do you seriously think he and his advisors didnt suss out very quickly that Mouthall and Amis were twats ? I I advertise a car worth £15k for sales for £30k and some village idiot trots up and buys it that doesn't mean the car is worth £30k does it ? It means the bloke who bought it is an idiot and I would recognise him as one.
  • Options
    Maybe but RD is still delusional about the price and many other things.

    I think RD and LDT didn't care  and didn't bother to check if the crook and  the quisling had the money as they retained the asset and got rid of the loss making part of the business. 
  • Options
    Dave Rudd said:
    Off_it said:
    Dave Rudd said:
    Off_it said:
    Dave Rudd said:
    Dave Rudd said:
    IdleHans said:
    He absolutely has an incentive to sell if he can generate more than the rent from investing the proceeds. If we say the property value is £30m then he's getting a return of just 1.7%, plus whatever capital growth there might be before global warming floods The Valley. Hardly a fortune, and easily beatable.
    Except he thinks it's worth £40-50 million ... so he won't sell in the foreseeable future.

    1.7% indefinitely (for no further outlay) will make sense to him.  Free money.

    Meanwhile his investment grows in value (in his mind).  What did it cost him?  £14 million?
    You're making your argument even worse.
    If he's getting £500K pa on £50M, that's a 1% return.
    This is hard work.  He didn't pay £40 -50 Million.  That's his valuation.

    He spent (I think) something like £14 Million ... so, if you need a % return on his investment, that would be about 3.5%.

    But that's not the point.

    The point is that he is getting £500k per year for doing nothing.  And maybe his valuation will eventually prove to be correct as the assets appreciate.  It might take a while, but he won't care about that.

    No incentive to sell until he gets the price he thinks it's worth.


    I'd also go with (c) from above.


    It is hard work mate. Because no matter what people are telling you you still ain't getting it.

    Say you bought something for £14k and spent £50k doing it up.

    You then leased it to me for £500 per year.

    Still think you're getting that £500 for "free"?
    Precisely.
    If anyone wants to lend me £64K, I'll happily give them back £500 annually for free that they can earn for doing nothing.

    I'll invest elsewhere and be quids in.
    Painful.

    I give up.
    I think you should.

    But before you go, can you let me have a grand please? I will pay you back £10 a year. "Free money" for you!

    Yes, let’s do it.

    What do I get for my £1000?  To keep your comparison going, it will need to be an asset which only appreciates in value, and for which you are entirely responsible for maintenance, repair etc.

    And ‘no’ … I don’t want your caravan.

    And don’t worry about paying me back.  I have the asset … remember?  What you can do is bung me a regular sum for the privilege of using the asset.

    Let’s call it ‘free money’, shall we?
    You think properly, especially single use properly, only ever increases in value? 

    You should have a good read on Return on Investment. 1% seems bloody awful. 
    Steve McLaren rightly took pelters for this sort of behaviour.
  • Options
    Rothko said:
    Yes when Roland dies
    How will that solve anything? His children will inherit and it could then get very messy - just ask anyone who’s been through a bereavement with inheritance of property involved.
    I don’t know about @Rothko but I harbour the hope due to seeing them bail out of Ujpest, and his son Roderick, who was supposed to run it, not apparently showing any sign of wanting to invest anew in football. One might hope that he would recommend to the rest of the heirs that football isnt worth the bother. You cant even have a birthday lunch in St Truiden without some Charlton turning up to gatecrash it😂
  • Options
    AndyG said:
    Dave Rudd said:
    Off_it said:
    Dave Rudd said:
    Off_it said:
    Dave Rudd said:
    Dave Rudd said:
    IdleHans said:
    He absolutely has an incentive to sell if he can generate more than the rent from investing the proceeds. If we say the property value is £30m then he's getting a return of just 1.7%, plus whatever capital growth there might be before global warming floods The Valley. Hardly a fortune, and easily beatable.
    Except he thinks it's worth £40-50 million ... so he won't sell in the foreseeable future.

    1.7% indefinitely (for no further outlay) will make sense to him.  Free money.

    Meanwhile his investment grows in value (in his mind).  What did it cost him?  £14 million?
    You're making your argument even worse.
    If he's getting £500K pa on £50M, that's a 1% return.
    This is hard work.  He didn't pay £40 -50 Million.  That's his valuation.

    He spent (I think) something like £14 Million ... so, if you need a % return on his investment, that would be about 3.5%.

    But that's not the point.

    The point is that he is getting £500k per year for doing nothing.  And maybe his valuation will eventually prove to be correct as the assets appreciate.  It might take a while, but he won't care about that.

    No incentive to sell until he gets the price he thinks it's worth.


    I'd also go with (c) from above.


    It is hard work mate. Because no matter what people are telling you you still ain't getting it.

    Say you bought something for £14k and spent £50k doing it up.

    You then leased it to me for £500 per year.

    Still think you're getting that £500 for "free"?
    Precisely.
    If anyone wants to lend me £64K, I'll happily give them back £500 annually for free that they can earn for doing nothing.

    I'll invest elsewhere and be quids in.
    Painful.

    I give up.
    I think you should.

    But before you go, can you let me have a grand please? I will pay you back £10 a year. "Free money" for you!

    Yes, let’s do it.

    What do I get for my £1000?  To keep your comparison going, it will need to be an asset which only appreciates in value, and for which you are entirely responsible for maintenance, repair etc.

    And ‘no’ … I don’t want your caravan.

    And don’t worry about paying me back.  I have the asset … remember?  What you can do is bung me a regular sum for the privilege of using the asset.

    Let’s call it ‘free money’, shall we?
    I get what your saying mate but I think the point being made is the ROI is terrible. Plus when you say the valley is an asset that is only increasing. Is it though ? How much more is it worth today than it was 2 years ago do you think ? On normal expected returns for commercial property £500k pa would value the valley at £17-£20m i imagine
    That suggests a yield of 2.5% which is very low. The average for commercial property is about 5% (suggesting a value of £10m). Even city offices let to law firms/accounancy firms with great covenant strength yield 3%+.  I would have thought a football ground with a loss making tenant and limited opportunities to re-let in the event of tenant bankcruptcy or failure to pay rent would imply a much higher yield than the average (but might be mitigated if there was a gurantor with good covenant strength). 
  • Options
    edited April 2022
    I suppose a difference is that Roland wants more than double what the Valley is worth. But if he strikes a deal which sort of says, buy it from me when you win the lottery, nobody would do that. But the way football is structured, getting into the Premier League is hard but easier and more likely than winning the lottery. But financially it is like winning the lottery.

    Roland gets some money but the opportunity for a lot more down the line. Just a thought.
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  • Options
    Jints said:
    AndyG said:
    Dave Rudd said:
    Off_it said:
    Dave Rudd said:
    Off_it said:
    Dave Rudd said:
    Dave Rudd said:
    IdleHans said:
    He absolutely has an incentive to sell if he can generate more than the rent from investing the proceeds. If we say the property value is £30m then he's getting a return of just 1.7%, plus whatever capital growth there might be before global warming floods The Valley. Hardly a fortune, and easily beatable.
    Except he thinks it's worth £40-50 million ... so he won't sell in the foreseeable future.

    1.7% indefinitely (for no further outlay) will make sense to him.  Free money.

    Meanwhile his investment grows in value (in his mind).  What did it cost him?  £14 million?
    You're making your argument even worse.
    If he's getting £500K pa on £50M, that's a 1% return.
    This is hard work.  He didn't pay £40 -50 Million.  That's his valuation.

    He spent (I think) something like £14 Million ... so, if you need a % return on his investment, that would be about 3.5%.

    But that's not the point.

    The point is that he is getting £500k per year for doing nothing.  And maybe his valuation will eventually prove to be correct as the assets appreciate.  It might take a while, but he won't care about that.

    No incentive to sell until he gets the price he thinks it's worth.


    I'd also go with (c) from above.


    It is hard work mate. Because no matter what people are telling you you still ain't getting it.

    Say you bought something for £14k and spent £50k doing it up.

    You then leased it to me for £500 per year.

    Still think you're getting that £500 for "free"?
    Precisely.
    If anyone wants to lend me £64K, I'll happily give them back £500 annually for free that they can earn for doing nothing.

    I'll invest elsewhere and be quids in.
    Painful.

    I give up.
    I think you should.

    But before you go, can you let me have a grand please? I will pay you back £10 a year. "Free money" for you!

    Yes, let’s do it.

    What do I get for my £1000?  To keep your comparison going, it will need to be an asset which only appreciates in value, and for which you are entirely responsible for maintenance, repair etc.

    And ‘no’ … I don’t want your caravan.

    And don’t worry about paying me back.  I have the asset … remember?  What you can do is bung me a regular sum for the privilege of using the asset.

    Let’s call it ‘free money’, shall we?
    I get what your saying mate but I think the point being made is the ROI is terrible. Plus when you say the valley is an asset that is only increasing. Is it though ? How much more is it worth today than it was 2 years ago do you think ? On normal expected returns for commercial property £500k pa would value the valley at £17-£20m i imagine
    That suggests a yield of 2.5% which is very low. The average for commercial property is about 5% (suggesting a value of £10m). Even city offices let to law firms/accounancy firms with great covenant strength yield 3%+.  I would have thought a football ground with a loss making tenant and limited opportunities to re-let in the event of tenant bankcruptcy or failure to pay rent would imply a much higher yield than the average (but might be mitigated if there was a gurantor with good covenant strength). 
    Yeah, but no, but yeah, don't forget it's free money  :)
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Roland Out Forever!