littleoldlady
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Post by littleoldlady on Sept 25, 2016 7:14:36 GMT
propertymoose so that we can get a clearer idea of how this works can you prepare a dummy set of accounts for one of these SPVs ? Edit (after pom below) I am referring to the loan funds PMF A, PMF B and PMF C.
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pom
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Post by pom on Sept 25, 2016 10:43:48 GMT
propertymoose so that we can get a clearer idea of how this works can you prepare a dummy set of accounts for one of these SPVs ? If you want further clarification of how they work (beyond that properties are bought and sold, interest is paid out of the profit and PM keep whatever's left) you're probably better off contacting them direct, dummy accounts sounds a bit OTT to me and I'd be surprised if they were prepared to do that so publicly especially when nobody else is doing anything quite like this (at least I don't think so)....yet(!)... so there's also commercial sensitivities
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littleoldlady
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Post by littleoldlady on Sept 25, 2016 11:03:37 GMT
propertymoose so that we can get a clearer idea of how this works can you prepare a dummy set of accounts for one of these SPVs ? If you want further clarification of how they work (beyond that properties are bought and sold, interest is paid out of the profit and PM keep whatever's left) you're probably better off contacting them direct, dummy accounts sounds a bit OTT to me and I'd be surprised if they were prepared to do that so publicly especially when nobody else is doing anything quite like this (at least I don't think so)....yet(!)... so there's also commercial sensitivities Did I make it clear that I was referring to the loans (PMF A, PMF B and PMF C) and not to the regular SPVs. I am not aware that they are buying and selling properties, although they will "assist" the platform to buy properties which will be bought by a SPV.
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pom
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Post by pom on Sept 25, 2016 11:37:18 GMT
If you want further clarification of how they work (beyond that properties are bought and sold, interest is paid out of the profit and PM keep whatever's left) you're probably better off contacting them direct, dummy accounts sounds a bit OTT to me and I'd be surprised if they were prepared to do that so publicly especially when nobody else is doing anything quite like this (at least I don't think so)....yet(!)... so there's also commercial sensitivities Did I make it clear that I was referring to the loans (PMF A, PMF B and PMF C) and not to the regular SPVs. I am not aware that they are buying and selling properties, although they will "assist" the platform to buy properties which will be bought by a SPV. Perfectly clear - I wouldn't have mentioned interest if I'd thought you were talking about SPVs. Suggest you re-read the earlier posts on the 8% thread. I think the biggest concern back then was whether they'd be able to generate enough profit, but as per the PM Fee thread we can now see where this is coming from. Personally the speed at which the recent properties funded by PMF A filled proves the concept to me.
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ilmoro
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Post by ilmoro on Sept 25, 2016 12:31:13 GMT
ISTM That there is a difference between PMFA which was to fund properties being purchased for investment on the PM platform & PMFB, PMFC which are to provide loans to 3rd parties as short term bridges. (Slightly confused by C including a statement regarding securing property for the platform which seems to be a typo)
B & C therefore seem to be more risky as they are black box lending and potentially at risk of 3rd party defaults, whereas the risk on A was solely in the hands of platform users not funding a proposal, leaving A to dispose of externally (limited risk) Rate does seem to be considerably better than other platforms offering the same though
Am I misinterpreting this? Missed out on A and avoided B as not quite sure on finer details.
Secondly, I note that PP have permission to offer IFISA, anybody know whether PM would be able to do the same? Structure seems a bit more complicated, but R****** C****** has the relevant permissions which I wonder if CF/PM can use.
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littleoldlady
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Post by littleoldlady on Sept 25, 2016 12:37:24 GMT
ISTM that some clarity on how the funds are used would be helpful, which is why I suggested dummy accounts which would show inflows and outflows and where the margin was generated to pay us 8% fixed. In the original post about PMF A propertymoose said: 3) The assets of PMF A Ltd will initially be the cash raised from the loan note. There are no liabilities in PMF A and no salary or staff costs on an ongoing basis. The funds will then be used to incorporate and lend funds to a PM SPV to acquire a property for the platform - allowing us to move quickly and cut out the middle man. 4) The loan to the PM SPV will be made on a fully secured basis by way of (i) first charge against the property being acquired and (ii) a debenture (fixed and floating) against the SPV. This loan will carry a market interest rate which will allow us to then accrue and ultimately pay the 8% interest to the investors in PMF A Ltd. From our model and current run rates, an excess will be made in PMF A which will allow us to pay costs and expenses of operating PMF A and ultimately continue to secure property for our members. (I have inserted "to" which I assume was a typo.) There is no mention of purchasing any property within PMF A and the dummy accounts should be very simple IIHUC. |
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ilmoro
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Post by ilmoro on Sept 25, 2016 14:06:36 GMT
There is no mention of purchasing any property within PMF A and the dummy accounts should be very simple IIHUC. True, misread on my part. However, 1st party risk (ie projects not funding) v 3rd party risk for B & C
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ben
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Post by ben on Sept 25, 2016 17:20:37 GMT
B and C are is not one of the loans I have really looked at on PM, as you get no information about who the money is being lent to or why or what there exit strategy is or anything really.
On a quick read of the loan particulars it looks to be aiming at the sort of market that sites like LI aim for, which is not a bad thing in itself, but LI for example have a good track history and give you sufficint information on a loan to make a decent judgment. So personally I would rather pick and choose over at LI for a slightly lower rate. But for a quick fire and forget loan it could be worth looking deeper at.
With A I saw it as basically investing in the platform and with similar risks as to investing into the individual properties.
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littleoldlady
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Post by littleoldlady on Sept 25, 2016 19:07:24 GMT
There is no mention of purchasing any property within PMF A and the dummy accounts should be very simple IIHUC. True, misread on my part. However, 1st party risk (ie projects not funding) v 3rd party risk for B & C For the life of me I cannot see any difference between A, B and C. AFAICS in none of them will the fund own any properties, it just acts as a bridge between the borrower and the PM SPV which buys it. What am I missing?
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ben
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Post by ben on Sept 25, 2016 19:29:29 GMT
True, misread on my part. However, 1st party risk (ie projects not funding) v 3rd party risk for B & C For the life of me I cannot see any difference between A, B and C. AFAICS in none of them will the fund own any properties, it just acts as a bridge between the borrower and the PM SPV which buys it. What am I missing? A is to fund property for PM, so buy the property orginally then sell it like normal on PM rather then paying someone else to buy it and then do it. B and C is for loans to other people, ones we know nothing about. So in the event of default A will either have cash or a property that is listed on PM as security, B and C will have random security that is owned by other people that we know nothing about.
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littleoldlady
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Post by littleoldlady on Sept 25, 2016 19:39:23 GMT
For the life of me I cannot see any difference between A, B and C. AFAICS in none of them will the fund own any properties, it just acts as a bridge between the borrower and the PM SPV which buys it. What am I missing? A is to fund property for PM, so buy the property orginally then sell it like normal on PM rather then paying someone else to buy it and then do it. B and C is for loans to other people, ones we know nothing about. So in the event of default A will either have cash or a property that is listed on PM as security, B and C will have random security that is owned by other people that we know nothing about. In the preamble to B it says: "Due to the high demand of the first loan-note, which funded in just 3 days at the start of July, we are delighted to launch the second opportunity of this type – an 8% net interest *p.a. secured loan to PMF B Ltd" If it is a completely different model then this is very misleading. BTW I still don't see that any of the funds will ever own properties.
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ilmoro
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Post by ilmoro on Sept 25, 2016 20:10:23 GMT
A is to fund property for PM, so buy the property orginally then sell it like normal on PM rather then paying someone else to buy it and then do it. B and C is for loans to other people, ones we know nothing about. So in the event of default A will either have cash or a property that is listed on PM as security, B and C will have random security that is owned by other people that we know nothing about. In the preamble to B it says: "Due to the high demand of the first loan-note, which funded in just 3 days at the start of July, we are delighted to launch the second opportunity of this type – an 8% net interest *p.a. secured loan to PMF B Ltd" If it is a completely different model then this is very misleading. BTW I still don't see that any of the funds will ever own properties. Read the next line 'The funds will be used by PMF B Ltd for bridging loans to external borrowers up to a maximum of 70% Loan To Value (LTV) and on short terms. Security will be a first charge against the properties, with personal guarantees where we feel they are necessary. ' Its the same model just not lending to PM. You are right none of the funds will own the properties they will just provide the funds secured against them. The risk of those funds not being repaid for PMFA is the property'ies bought by PM not funding, PM not repaying the loan to PMFA so they have to enforce security so therefore the risk relates to the existing business model. For B & C the risk is that third parties, whom we have no knowledge of, defaulting on the loan and PMFB/C have to enforce security. I admit the difference is subtle but IMO B & C are closer to black box models operated by other P2P platforms in this sector rather than just being a facility to smooth the functioning of the platorm which is what A is. Question is do we have confidence in PM credit commitee to access borrowers whereas a standard PM investment is based on confidence in their ability to access property
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littleoldlady
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Post by littleoldlady on Sept 25, 2016 21:34:15 GMT
Yes you have persuaded me. I did not read it carefully enough. As I said I was mis-led by the claim that B was the same - or at least the same type - as A. Not only do we not know who the borrowers are but we know nothing about the security - not even if it is residential or commercial. I hope that investors in B and C know what they are investing in and did not fall into the same trap that I did. AFAICS they could get 50% more on other platforms for a similar offering where they could at least do some DD on the property. I am not alone in being confused - a couple of posters above appear to think that the funds buy properties. Luckily I have only invested some interest in B and I will not be adding any more. And I still think dummy accounts would clarify matters.
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Neil_P2PBlog
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Post by Neil_P2PBlog on Nov 3, 2016 18:07:45 GMT
Any ideas how the PMF loans actually charge the SPV's?
The financing charge is listed under 'furniture', which also includes "auction fee, inventory, checkout, inspection, visit" which makes it difficult to understand.
SPV 69 at £55,000 property cost has a furniture charge of £5,932 (10.8%)
SPV 60 at £37,500 property cost has a furniture charge of £5,497 (14.7%)
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Steerpike
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Post by Steerpike on Nov 3, 2016 21:19:29 GMT
Looking at SPV60 for example it appears that PM take some large bites of revenue from day one.
Acquisition costs are shown as £5,497.79 including an undisclosed "finance fee" payable to PMF as well as £2,334.50 standard PM fee, making nearly £8k of the total other costs of just over £11k. There is also a £1,125.00 provision fund which I believe remains with PM if it is not required for repairs during the term of the project.
This seems to add up to quite a large chunk on top of a property that cost £37.5k.
Also, I don't understand why the total cost shown £49,020.00 is £441.94 more than the sum of the property price and other costs/charges.
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