Home Reit Share Discussion Threads

[spectoacc] 21/3/2023 09:51

"Quilter Cheviot's Creasey noted that with a number of tenants entering financial difficulties, the manager may find it helpful to have a broader scope in terms of what the buildings could be used for, and who the tenants might be."


Hence the mooted change in investment policy. Isn't the worst idea - we know some of the property was being let out as standard BtL anyway, was one of VR's original allegations & could find some HOME houses up for regular rent on Rightmove.

Key question is how much of the property is in a bad state. Logic says a lot of it, because 77%+ or rents aren't being paid, and lack of CapEx cash is the main reason. But it surely all can't be in the state shown by The Guardian pics.

Perhaps take the youngster's £20m CapEx est (having not looked at all the houses, nor IMO considered the difficulty of finding workmen/materials) and dividing by c.2,500 properties, gives £8k per house. Hmm. You get a new boiler and some d/g for that, yet the ones we've seen pictures of are in a dire state. £8k pa per house for HMO'ing the homeless seems more likely.

Still - if remotely accurate, £8k per property implies many are in OK ocndition, and might convert to BtL.

Just, um, don't look at what the Peterlee ones would fetch:


Sub-£500pcm for 3-bed done well. Not a chance of HOME being viable if those numbers repeated. Whole point of housing the vulnerable is getting hefty rents.

[little beaker] 20/3/2023 14:12

hxxps://www.investmentweek.co.uk/news/4080642/home-reit-uncertainty-multiple-outcomes-emerge

[williamcooper104] 20/3/2023 14:03

No way covenants haven't been breached My guess is 2-3 percent covenant waiver fees rather than a full re-pricing of the loan But for a new purchaser Widows likely to not give change of control; so then the cheap debt is gone

[spectoacc] 20/3/2023 13:31

Loan covenants will be hugely breached, so the low interest rate unlikely to last.

The Peterlee properties - the ones I know best - are worth under £30k each, perhaps half that depending on condition.

Only 23% of rent was being collected at last RNS - this is a key point, it questions the whole viability of HOME's model.

Repair bills estimated at £15-20m by a 31 yr old who hasn't seen all the houses. Neither materials nor workmen nor project managers are readily available in this market.

There are no buyers looking at HOME to my knowledge, beyond a single-director limited co with a £167k balance sheet, & links to Alvarium.

[wallywoo] 20/3/2023 13:23

On the other end of the argument. Home Reit are now valued at £300m (@ 38p).They have £250m of very cheap long term debt. They own 2473 hmo houses with the average of 4.8 people/bedrooms per house. 300m+250m / 2473= £222,401 per house at current share price. Imho, this is a 50% discount to realistic asset value, even with repair bills and the current tenant mess.So it is very cheap and you can understand there is an opportunity, and you can understand why there are buyers looking at them.

[spectoacc] 20/3/2023 12:45

@Biffa58 - ish.

Spivs set up SPVs (eg a Venice-dweller mentioned frequently on this BB), buy up HMOs from auctions etc, set up charity/CIC's to operate lease.

Flip on to another SPV at least once to hide original purchase prices.

Sell on to HOME at more than double what they paid, sometimes only weeks earlier, but now with these leases to "experienced" operators for 25-30 years.

By the backdoor, gift those same operators with the first 12 months of rent.

Perhaps promise them some more for refurbs etc.

Operators ie lessees sometimes don't last much beyond the 12 months of gifted rent.

But no matter - HOME (or CSH, or whoever) can simply transfer the lease to a new/another operator.

Shareholders are happy - they think they're getting secure, long-term leases, with inflation-protected uplifts, and housing the homeless.

The Board get paid, the manager (Alvarium) coin it, the SPV spivs really coin it.

Less good for the homeless/vulnerable, who are in low-spec, presumably under-heated, sometimes falling apart property.

Is there a connection between SPV flippers and Alvarium? The £900m question. But even without a smoking gun, it stinks.

[biffa58] 20/3/2023 11:21

I've been trying to work out what allegedly happened with property purchases.Is it this?
Genuine vendor had a house worth £20000.
Alvarium or a company/partnership with connections to Alvarium bought it for £20000.
Home then bought it for £50000.
If not that what are the allegations?

[spectoacc] 19/3/2023 13:30

Does work - thanks.


"The previous adviser, Alvarium, cut ties with Home REIT as it became embroiled in a series of escalating crises."

Not what happened - Alvarium simply hived off the HOME management side into a new co, whilst keeping the right to buy it back again at exactly the same price.

Still very much Alvarium marking Alvarium's homework - and they know full well what will happen if they lose control of the Trust. Presumably the board, culpable or not, need Alvarium to stay too.

Where's that fraud report?


Still can't quite believe how ignorant RM are of the problems at HOME - they should read this BB. There's a serious backlog of maintenance, some chronically unsuitable property, and rent collection 23% and falling. Promising to cut management fees and invest a little of it into HOME shares is not the solution.

Suspect the likes of M&G may go along with it tho - the ones who've done so little DD and have so little understanding of what they put OPM into.


Edit - so what is the solution? Accurately assess maintenance, raise the money to do it, actually do it, install genuine CIC/charity lessees, and actually monitor them. There's still a chance there's no viable business here, since the existing lessees have mostly struggled within months of the first year of free rent that was gifted by HOME has been used up.

[adv11] 19/3/2023 13:10

New Mail article, nothing new. Not sure if link will work - Fund manager hoping to ride to rescue of troubled Home REIT receives backing of several major investors

[spectoacc] 16/3/2023 07:24

"Home REIT says discussions w/Bluestar for acquisition of company still ongoing"

[little beaker] 15/3/2023 19:48

Don't forget the ominous "The Board and its advisers are in close contact with Scottish Widows, the Group's main lender, and are grateful for its support to date"

That's the company equivalent of the "vote of confidence" in a football manager!

[williamcooper104] 15/3/2023 19:11

Any ideas what changes to investment policy they'd need to make to remain a listed company that would need FCA approval Presume they mean the option of a solvent wind down

[spectoacc] 15/3/2023 17:23

Not sure how HOME failed to mention the "bid" in the earlier RNS.

Also considering realising some ".Or all.." of its assets in an orderly fashion. Good luck with orderly. Sitting tenants not paying rent, disputed CapEx agreements.

"...Auditor BDO was still seeking to finalise the audit of its annual accounts"

Still!

Fraud investigation also still ongoing.


Edit - this is as close as they got to mentioning tomorrow's PUSU deadline:

"The Board continues to explore all options, including an orderly realisation of some or all of its assets and/or a sale of the Company to maximise value for shareholders."

On the current evidence of the Board's competency.....

[biffa58] 15/3/2023 12:31

There is a small risk in joining the claim " Before commencing any court proceedings, we will make sure that we have After the Event or “ATE” insurance in place to protect you if the claim is unsuccessful, but there is a small risk that you may not be covered in full, for example if the insurance fails. The costs for which you will theoretically be liable will be shared with the other claimants, so that in the unlikely event that the insurance fails, your own exposure will be very low. We will also work with experienced insurance brokers to ensure the insurance is placed with insurers with good credit worthiness, which will further reduce the risk for the claimants."

[spectoacc] 15/3/2023 08:20

Indeed - Alvarium buying assets off Alvarium from a trust managed by Alvarium

Board have been asleep in all this, and ditching Alvarium should have been Plan A, as many on here have said.

Agree that spending the money on the refurbs, and sorting the lessees, would be the best outcome for shareholders. Some of the existing lessees have strong links to the original SPV scam tho, and there may not be the money for refurbs.

Also, who are the buyer? For several years there's been a floor put under HMO prices thanks to the likes of HOME splashing £900m. Struggle to see the other ITs raising the cash to buy, so is it just dumping them at auction to PI's? All coming at the same time as interest rates have risen.

[williamcooper104] 15/3/2023 08:05

An asset by asset liquidation is actually possible But to do that before sorting out the leases/tenants, even if means cutting rents - far far better to sell resolved assets that be a distressed seller selling distressed assets But hey Alvarium/friends of might like to buy distressed assets

[spectoacc] 15/3/2023 06:39

@JGH03 - no idea, sorry. Not a holder.

@Tradez4 - they can leave it to very last minute I think. Be interesting if they say "..Other expressions of interest..", or mention RM's desire to replace Alvarium.

Personally doubt HOME is ever coming back (where are the accounts??), anyone would take it over (why take on the legal risk?), or a new manager would be appointed (RM seemed completely inept & oblivious to how bad this is).

None of which means shareholders would get nothing back - there's real assets, even if they're deteriorating and most not paying an income atm.

[jgh03] 14/3/2023 17:32

Has anyone here signed up to join the Homereit claim ? If so, do you know what proportion of any payout Harcus Parker will take ?

If one doesn't join the claim but Harcus Parker is successful, is there any way to get a payout ? Or would one have to pursue one's own claim ?

[tradez4dayz] 14/3/2023 17:18

When do they have to extend the 16th deadline? Can they wait until the day?I think this stock could also be best performing reit over the last week as well.Things are looking up

[williamcooper104] 13/3/2023 17:04

Yep - I've put in Fortunately I've got notes setting out my investment case and what reliance I put on managements statements Normally not a fan of nuisance litigation and shareholders suing themselves - but Alverium are very deserving of being sued - and I think there's a good prospect of getting something back My only issue is whether it's worth pursuing without HP - eg if enough shareholders clubbed together would it be worth doing that to avoid the big slice a no win no fee litigator will take - just the sort of thing that ShareSoc should look at

[tradez4dayz] 13/3/2023 16:56

Nothing to lose by joining the claim

[gbcol] 13/3/2023 16:49

I know this was raised here a few weeks ago but as I have been notified about it by my SIPP provider today, I wonder if there are any further views on the Harcus Parker class action and if anyone has joined (and willing to disclose).



I’m sitting on a pretty significant loss on this one but I’m sceptical that any of that loss can be retrieved.

[williamcooper104] 10/3/2023 09:58

Yep 16 March IIRC

[spectoacc] 10/3/2023 09:05

Lol yes.

Gone a bit quiet at HOME - the phantom bidder has until a week today to PUOSU I believe. Wonder if they'll be cheeky enough to extend it.

[williamcooper104] 10/3/2023 09:02

Well nowThis is going to be every share holders best performing position this month :)