tony
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MT30
May 3, 2015 19:23:30 GMT
Post by tony on May 3, 2015 19:23:30 GMT
I have recently joined MT and am awaiting funds to be transferred so that I can start part funding. I note that the only loan currently open for funding is MT30 and yet the take up is very, very slow - still 62% half way through the term. I would be interested to learn from investors, who are more experienced than myself, why this is so. Do you think that the valuation is wrong and/or the LTV is too high thus making the investment too risky?
Incidentally, I notice that there is an error in the valuation report - it refers to a 6 year loan instead of a 6 month loan. I am wondering if investors will want confirmation, from MT, that the reservations mentioned in the report have been satisfactorily addressed i.e. the roof structure, planning and building control approval.
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baldpate
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MT30
May 3, 2015 20:09:08 GMT
Post by baldpate on May 3, 2015 20:09:08 GMT
I'm not sure about the "more experienced", but I can tell you some of what went through my mind when I looked at that loan: - judging by the location of the valuer's office, I presume the property is also located in the Border country - not the most economically vibrant part of the UK (pace our Scottish friends); - I noted the valuer's comments about the likely limited purchaser demand; - as a result, in the case of a default I think the lower valuation figure (giving a higher LTV of 66%) is much more likely (and even that might be optimistic), and it could take some time to realize. In addition, I should come clean and mention an immediate, and probably quite unfair, gut reaction along the lines " What! A hundred grand for a couple of nissen huts!". There is no shortage of other platforms offering property backed loans : I came to MT because of the other asset classes it offered as loan security. All of which added up to ... thanks, but no thanks.
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SteveT
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MT30
May 3, 2015 20:16:06 GMT
Post by SteveT on May 3, 2015 20:16:06 GMT
I'd say it's a combination of factors:
a) MT is still a small platform with maybe a couple of hundred investors and probably relatively few "high rollers" as yet (although someone took a very large chunk out of the Piper loan) b) Many are already exposed to a lot of property loans on other platforms (SS, FC, AC, etc.) and looking for MT to provide some alternative asset diversity c) The loan in question is quite different from all the other MT loans to date and that in itself may put some off
Personally I was equally happy to invest in MT30 given the reasonable LTV, but again only a modest sum.
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jonno
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nil satis nisi optimum
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MT30
May 4, 2015 8:14:42 GMT
Post by jonno on May 4, 2015 8:14:42 GMT
Not too much to add to the above, but it's worth noting that initially this was the only loan on the platform that was not part of the "Cash Shop partnership arrangement" which did give MT it's USP. That, allied to it's size (for a new platform) and the fact of the availability of property on other,more established sites, IMHO mitigated take up. I have taken a £500 bite however.
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MT30
May 4, 2015 9:18:29 GMT
Post by Deleted on May 4, 2015 9:18:29 GMT
As above, I think Ed is using this early stage of his P2P to develop the business model, hence he has stuck in a property and an aircraft to see what happens. The property was in first and has taken forever to fill, basically the present users can get property in loads of other places so most not very interested and in terms of spreading their risk amongst multiple loans this property is just too big compared to small gold pieces. If you look at how much individuals have invested (average £4k??) then the property is just too big.
The aircraft, was another trial and I suspect (but cannot prove) that Ed probably brought a major player who wanted a P2P aircraft loan with him onto the platform, hence the big bite that fullfilled much of the loan. Note that there is one P2P that offers almost exclusively aircraft loans, if you want that sort of business why not go there?
Meanwhile MT seems to be going down the pre-invested gold pawn market route which is pretty unique, high investment efficiency, LTV backed by the supplier in 6 monthly max or 6 monthly repeat loans at 1% a month. So I would not worry about the property filling out, it is just a hang over from early trials and I wouldn't be surprised if it got taken out of this business by August.
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Post by uncletone on May 4, 2015 10:04:07 GMT
Neither would I. It's due for repayment on the 31st of July.
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ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on May 5, 2015 7:37:56 GMT
tony I think the other posters have covered it. Just to provide a bit more detail from my personal perspective, which may or may not tally with others: I already lend on property quite heavily on other platforms. Experience shows that property loans rarely pay back when the loan term is up; this isn't necessarily a problem because they often do pay up eventually, or if not, potential sale of the property by the platform means there is at least a good possibility of funds being returned to lenders. However, lenders are often locked in to the loans during this time which can be very long, and lenders of a nervous disposition with low appetite for risk lose sleep over it. The platforms where I lend on property have a secondary market and/or have negotiated a higher rate of interest from the borrower during the default period. Those lenders who want to get out of the loans can usually do so by selling their loan parts on (more difficult once the loans have defaulted, but not impossible) and those who have a high appetite for risk can get into them. We don't have experience of how MT will handle these almost inevitable overruns on property as yet, so getting involved in property here is currently an unquantifiable risk. I have a very high appetite for risk, but only where I know what the risks are, and in this case I don't yet. The actual characteristics of MT30 are of no relevance to my decision in this case. My decision could change in the future if MT built up a track record in property, and if they provided the secondary market (not for me necessary for their more usual loans, but vital for property where in the case of a very large loan MT might not have the ability to repay lenders back until the property is sold, even if they wanted to). Having said that, as others have said, I value the diversification offered by platforms dealing in non-property loans - I don't want all my eggs in the property basket). HTH
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jonbvn
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Post by jonbvn on May 5, 2015 7:52:55 GMT
OP,
Put simply? "Two huts in the @ss end of nowhere". I just cannot see the value there.
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webwiz
Posts: 1,133
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MT30
May 5, 2015 21:26:38 GMT
Post by webwiz on May 5, 2015 21:26:38 GMT
Remember that Ed has his own money in this loan - the whole loan initially, and he is just giving us the opportunity to share in it. He told me that he is quite happy with the small take up as he is making more money then. It all depends on how much you trust his judgement and integrity. I am in for a 4 figure amount which indicates how I feel on that. The jewelry is too much effort for pennies reward for me, so I am only investing in the high ticket items, including pawn portfolios.
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jonbvn
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MT30
May 5, 2015 22:40:43 GMT
Post by jonbvn on May 5, 2015 22:40:43 GMT
Remember that Ed has his own money in this loan - the whole loan initially, and he is just giving us the opportunity to share in it. He told me that he is quite happy with the small take up as he is making more money then. It all depends on how much you trust his judgement and integrity. I am in for a 4 figure amount which indicates how I feel on that. The jewelry is too much effort for pennies reward for me, so I am only investing in the high ticket items, including pawn portfolios. I am somewhat confused. If Ed is happy with small take up of a loan, why bother selling it or any other loan on MT at all? The portfolios are a completely different animal from this property loan. I am not against all property loans, just this one.
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madpierre
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Post by madpierre on May 6, 2015 8:08:27 GMT
Remember that Ed has his own money in this loan - the whole loan initially, and he is just giving us the opportunity to share in it. He told me that he is quite happy with the small take up as he is making more money then. It all depends on how much you trust his judgement and integrity. I am in for a 4 figure amount which indicates how I feel on that. The jewelry is too much effort for pennies reward for me, so I am only investing in the high ticket items, including pawn portfolios. I am somewhat confused. If Ed is happy with small take up of a loan, why bother selling it or any other loan on MT at all? The portfolios are a completely different animal from this property loan. I am not against all property loans, just this one. I would imagine Ed does not have a bottomless purse to fund loans, which is where we come in to aid his plans for world domination in the lending market
As for the property loan, it's not the best I've seen and despite having a belly full of property elsewhere I have nevertheless contributed in small measure (small to some, massive to others). It's testing the water for all of us and if I hadn't put a bit in and it went without hitch, I would have kicked myself
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webwiz
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MT30
May 6, 2015 18:32:44 GMT
Post by webwiz on May 6, 2015 18:32:44 GMT
We don't have experience of how MT will handle these almost inevitable overruns on property as yet, so getting involved in property here is currently an unquantifiable risk. I have a very high appetite for risk, but only where I know what the risks are, and in this case I don't yet. The actual characteristics of MT30 are of no relevance to my decision in this case. My decision could change in the future if MT built up a track record in property, and if they provided the secondary market (not for me necessary for their more usual loans, but vital for property where in the case of a very large loan MT might not have the ability to repay lenders back until the property is sold, even if they wanted to). Having said that, as others have said, I value the diversification offered by platforms dealing in non-property loans - I don't want all my eggs in the property basket). HTH This is a shrewd strategy. The only problem is that if everybody follows it we are in a chicken and egg situation and the thing can never take off. Personally I am prepared to gamble a modest amount based on Ed's performance to date. The end of July will reveal a lot. I have a large (for me) amount in property on SS and would like to reduce my exposure to platform failure there, so would be pleased if MT got property up and running.
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bugs4me
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MT30
May 6, 2015 21:09:25 GMT
Post by bugs4me on May 6, 2015 21:09:25 GMT
We don't have experience of how MT will handle these almost inevitable overruns on property as yet, so getting involved in property here is currently an unquantifiable risk. I have a very high appetite for risk, but only where I know what the risks are, and in this case I don't yet. The actual characteristics of MT30 are of no relevance to my decision in this case. My decision could change in the future if MT built up a track record in property, and if they provided the secondary market (not for me necessary for their more usual loans, but vital for property where in the case of a very large loan MT might not have the ability to repay lenders back until the property is sold, even if they wanted to). Having said that, as others have said, I value the diversification offered by platforms dealing in non-property loans - I don't want all my eggs in the property basket). HTH This is a shrewd strategy. The only problem is that if everybody follows it we are in a chicken and egg situation and the thing can never take off. Personally I am prepared to gamble a modest amount based on Ed's performance to date. The end of July will reveal a lot. I have a large (for me) amount in property on SS and would like to reduce my exposure to platform failure there, so would be pleased if MT got property up and running. No problem with property or indeed higher value items - as per usual subject to, etc, etc. I am currently in the process of capping my exposure with another platform that has relatively recently moved into higher value items especially property as there is no SM. Even though I expect to be involved for the full 6 months plus maybe a few weeks after nonetheless for emergency and diversification purposes that SM, or a lack of it, is possibly IMO beginning to bite. I'm confident that if they permitted a SM then there would be plenty of takers but then again, as the interest is rolled up until maturity then possibly this is seen as a potential headache. As MT credit interest monthly then they should be able to scale this factor in. Just my ramblings.
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