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Post by alexb26 on May 27, 2016 20:39:08 GMT
Hi guys - lurked on this forum for a while and really value the interesting discussions on this board. I'm reasonably experienced in P2P investing and happy with my risk/exposure level on that side. I was looking for a steer from a couple of you wise owls on how you rate the platform risk associated with this site; ideally maybe a number for what the maximum% of your property portfolio (or even total portfolio) you would be willing to invest here. Really like the site but in the event of the company folding I gather (as a nominal share owner) that recovery of (some) of my capital would be messy...
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Post by reeknralf on May 28, 2016 8:47:46 GMT
At the risk of showing myself up, I thought we were actual shareholders, not nominal shareholders. I appreciate we're relying on PP to keep accurate records of who owns shares in each SPV, and that if they don't, a wind-up would be ugly. In this sense, our position is perhaps closer to that of a nominal share holder.
The biggest problem I've found on p2p loans is dishonest borrowers, and I predict that the platforms that get suckered the most frequently will be the ones that fail. With P2P equity you're buying on the open market, as opposed to on a valuation, so the scope for being conned is much less. Ultimately, I have faith that there's a future for this sort of platform, and PP strikes me as the best of the current crop. Momentum is everything on t'internet; so I'm betting they won't fail. They are my largest holding at about 7% of investment portfolio.
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bigfoot12
Member of DD Central
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Post by bigfoot12 on May 28, 2016 9:26:20 GMT
I was looking for a steer from a couple of you wise owls on how you rate the platform risk associated with this site; ideally maybe a number for what the maximum% of your property portfolio (or even total portfolio) you would be willing to invest here. I think that any such % would be meaningless. It might be sensible for a young person with less capital but a high income to take big risks, but less so for an older person with a lower future income (proportionate to current capital). Many on this forum think property is safe and equities are dangerous. I would think for yourself of the worst possible case and a couple of the most likely cases. Really like the site but in the event of the company folding I gather (as a nominal share owner) that recovery of (some) of my capital would be messy... Like reeknralf I might be showing myself up, but almost all of the shares I own are owned under a nominee arrangement, including my ETFs and other large companies. (The exception are the shares I bought from Syndicate Room, which is one of the reasons I really liked them - I wasn't relying on their ongoing success once I had my share certificate. Obviously the risks in those companies was very high for other reasons. Sadly all new investments in SR are now nominee.) I assume that any failure of any P2P company will be very messy. We have seen here that many platforms have been given conflicting advice even by difference HMRC offices. Until the industry matures a little it will be hard to be confident what will bring a company down. It is quite likely that the structures used by some of these companies don't work as intended in an insolvency. The biggest problem I've found on p2p loans is dishonest borrowers, and I predict that the platforms that get suckered the most frequently will be the ones that fail. This is a good point. And I like PP so far, but have been with them for a very short time. In that short time all new properties have had very low yields which aren't for me. We seem to be expected to hope for continued capital gains.
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hazellend
Member of DD Central
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Post by hazellend on May 28, 2016 20:12:05 GMT
There are quite a few good yielders on property partner 4 to 5% net. For prime property that is pretty high. The lower yielders are all in London and are growth investments rather than income plays.
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Post by alexb26 on May 29, 2016 11:42:29 GMT
great - thanks for input
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Post by george on May 30, 2016 10:35:57 GMT
I've been using PP for a year now. In terms of how they are set up, I get the impression that they are towards the more competent end of the spectrum and so I'm perhaps less wary than with some other P2P platforms about how ugly a platform failure would be. However, as others have pointed out, we don't really know how messy it would be until it actually happens.
In terms of how likely I think they are to last, I'm actually a little bit worried these days. Their statistics which they release in the middle of each month show a fairly steady linear growth in the number of investors, which is exactly what you want to see. But over the last 3-4 months they've been having to offer increasingly many promotions to get the properties they list fully funded. There has also been a parallel slowdown in the frequency with which they are listing properties. I also get the feeling they are back-pedalling a bit on the secondary market, which is one of their main features over other property platforms. Several rounds of recent web site changes have worked to downplay this aspect of the platform significantly. So if you are planning to invest, I would be very wary of relying on a secondary market exit as part of any strategy.
How the five year exit will work is also something of a mystery to me (with little information above 1) we'll relist it on the platform 2) if it doesn't fill, we'll sell it on the open market). In particular, I wonder how much of a discount / how much selling costs will be involved. I've bought a couple of shares in the earliest properties they listed on the secondary market, just so I can be in at the beginning to see how this process works when it first happens.
Overall, I'm still adding to my holding with them, but at a much reduced rate to what I was planning 6 months ago. I'm being extra cautious for now, until I feel more confident I understand the direction they are taking the platform in.
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