bfish
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Post by bfish on Jun 27, 2018 12:25:08 GMT
Am a little surprised that PP don't feel obliged to declare we already have investment in the very same property (at a lower dividend rate, but a much higher 'total return' projection) !!
Very confusing !
PS And while I appreciate the new offering includes 16x 1-bed flats, out of 25 in total, I wonder why the Ground Rent averages only £90 p.a., whereas on the existing PP investment the GR is £250 p.a. each !!?
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IFISAcava
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Post by IFISAcava on Jun 27, 2018 12:43:37 GMT
Am a little surprised that PP don't feel obliged to declare we already have investment in the very same property (at a lower dividend rate, but a much higher 'total return' projection) !! Very confusing ! unless I have missed something I cant see why anyone would invest in this rather than PPs own offerings (including the same property, which is available on the SM at a discount).
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Post by sayyestocress on Jun 27, 2018 14:13:09 GMT
Am a little surprised that PP don't feel obliged to declare we already have investment in the very same property (at a lower dividend rate, but a much higher 'total return' projection) !! Very confusing ! unless I have missed something I cant see why anyone would invest in this rather than PPs own offerings (including the same property, which is available on the SM at a discount). You get a bigger dividend with some downside protection on said dividend. Though the price you pay is in potential capital gain and a say if/when the flats are sold. I guess it depends where your goals/priorities lie. I'm surprised they're offering something in the same building as an existing opportunity, though.
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Post by chrisp2p on Jun 28, 2018 10:34:38 GMT
Have done a quick check of the numbers between Gama’s new offering and PP’s of the same building and they look consistent across purchase price, service charge and rental income estimates
They do differ in a number of other ways
1) Gama offering cost 30% of rent less service charge for management fee compared to PP’s 10%+vat of full rent
2) GAMA are using 70% ltv and a variable mortgage (as opposed to PP’s 50%ltv and fixed rate for 5 years). This variable rate is currently only 2.5% which when combined with the higher ltv results in higher dividend despite the above - but rates only need to go up about 2.25% and all divis are wiped out
3) Gama get 50% of the capital increase on selling where PP take nothing
i also notice the usual “mortgage provided by a high street bank” has been omitted and 5% (£82K) seems a lot to arrange a variable rate mortgage arrangement fee but I am no expert and could be missing something
... and with Gama controlling when it is sold they may want to hold on for extra capital gain even if shareholders are hemoriging money with 7% interest rates
Risk / return for Gama offering looks well below the usual PP offering. I would much prefer Gama’s risk / reward - nil risk and plenty of reward
I think the variable mortgage and high ltv make this currently look a far better offering than it is, deliberate? May not look so pretty when interest rates go up (gama’s Rent guarantee does not cover this eventuality) but Gama will still make good returns
I have allways been impressed with PP honest fees which is why I only invest in crowd fund Property with them because their competitors really do take a big cut
This view of PP has probably changed with this offering - I hope they are getting more than their usual 2% investment fee for rolling this out
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beh
Member of DD Central
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Post by beh on Jun 29, 2018 19:33:59 GMT
Don't understand why they thought it'd be a good idea to return to the same property when trying to launch a new type of deal/offer.
Are they struggling to find properties themselves?
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Post by chrisp2p on Jul 4, 2018 17:55:59 GMT
That’s Good question beh and I shudder to think what the answer is
the Gama offering looks more like a well laid trap than an investment opportunity and Gama will make a lot of money out of it with investors taking all the risk
Prahaps PP are getting rewarded more for this “opportunity” than their usual offering!
PP are clearly trying to monitise their success/popularity recently which I have no problem with - within reason
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