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Post by df on Aug 18, 2017 1:40:03 GMT
Ah, the "Bigger Fool" approach again... You call it an approach, I call it a proven investment strategy More generally, there is a bigger picture here. Later tranches of devt, finance loans become harder to fill than early ones because investors have had their fill or become nervous about the rapidly increasing loan size and reduced liquidity. COL have responded well to this and recognised it by raising the interest rate on later tranches,and reducing the size of the tranches. Now we can earn a fantastic 15% on small tranches. If us investors support this approach and provide the funding needed, it could establish a precedent on big projects and we will see rates this high again in the future - and other platforms will start to take note. If people sit it out and don't back it, the project stalls, everybody gets stuck and platforms won't bother offering us premium rates again in the future. I welcome COL's initiative on this and very much want them to succeed, not least because if COL succeed, we all succeed - developer, investors and COL. I didn't go for "fantastic 15%" because I already have too much in Bolton loan, but I think it is a good idea to raise the interest for further tranches and put them at lower priority in case of default. FS does similar. I developed a lot of trust in COL - may be a little premature as it is a very young platform, but so far they are getting things right. It's the only platform I know that has bullet defaulted loans with positive term. I also welcome the introduction of 10% for jewelry loans - very healthy, lower returns for lower risk.
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elliotn
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Post by elliotn on Aug 18, 2017 3:10:38 GMT
The JCT was included in the original loan details. what does jct mean? It's the fixed cost contract agreed with the developer ie we knew the size of this loan at the outset. Also, if you sell your earlier tranches they are the safer ones in the pecking order of a default so make sure you spread your risk according to your risk appetite.
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madpierre
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Post by madpierre on Aug 18, 2017 8:13:10 GMT
Collateral is in an invidious position having taken on a loan beyond the pockets of its relatively small lending community. However, the fact that they are determined to see it through is to their credit although, to achieve this, the later tranches may require interest levels that are painful to them. For lenders this is a textbook example of risk vs reward, with later tranches having negligible security but high potential earnings. So perhaps these current 15%, effectively third charge offerings may prove ultimately to be relatively safe as the loan is still young. Who knows 15% might fill the loan but I doubt it and we may yet see 17% fifth charge tranches? If all goes well and the project is successfully completed we will all be winners, Collateral will be heroes and we will be warriors. If not, this loan will perfectly illustrate the perils of the high risk P2P industry we lend to. But it’s certainly a stimulating situation and I certainly never thought I’d be ‘living on the edge’ after retirement
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registerme
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Post by registerme on Aug 18, 2017 8:48:51 GMT
For lenders this is a textbook example of risk vs reward, with later tranches having negligible security but high potential earnings. So perhaps these current 15%, effectively third charge offerings may prove ultimately to be relatively safe as the loan is still young. Who knows 15% might fill the loan but I doubt it and we may yet see 17% fifth charge tranches? I signed up to Collateral yesterday and, for obvious reasons, the 15% immediately caught my eye. But the "effective third charge offering" stayed my hand from reaching for my wallet.......
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Post by elephantrosie on Aug 18, 2017 9:20:56 GMT
sold over 500 quids of earlier tranches within a day. these loans looked really popular. i hope col will see it through.
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elliotn
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Post by elliotn on Aug 18, 2017 9:45:38 GMT
sold over 500 quids of earlier tranches within a day. these loans looked really popular. i hope col will see it through. Very small amounts should still sell, especially now they are ranked in front of the 15% tranches.
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Post by elephantrosie on Aug 18, 2017 10:03:55 GMT
i was ranked behind just less than a grand.
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seeingred
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Post by seeingred on Aug 18, 2017 10:38:16 GMT
The Bolton loan should be fairly straightforward if it is managed tightly and the contractors know they are being monitored every step of the way.
COL need to prove themselves on the Darwen and Burnley loans too if they are to be regarded as a safe platform for property loans.
If all three projects are taken to a successful completion, COL will have earned their spurs.
They need above all else to show a determination to keep projects on track - something that seems to have been lacking for a prestige housing development in Exeter on another platform.
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Post by d_saver on Aug 18, 2017 11:09:59 GMT
One of the things that attracted me to this loan, and one of the reasons I prefered it to some similar DFL's is the fact it was being done on a fixed cost contract by a solid company. There should be no surprises in terms of cash needed to complete this development and this takes some of the risk out IMO. All the costs were known up front. All we need now is for COL to be able to raise the remaining cash (and they seem to be quite proactive in getting this done - well done) and for the remaining few apartments to be sold. 90 of the 140 were already sold at the time the loan launched. I'm not nervous about this one.
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oik
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Post by oik on Aug 18, 2017 12:33:29 GMT
Any advance on 15%? 16%, 16% do I hear 16%? Sold to the man gesticulating on my right. Your name Sir? Mr 12%. iirc around £3m has been raised so far with another £3m to come, about halfway. So I wouldn't bet against it needing yet more encouragement. The 15% is certainly working at the moment, flying off the shelf, but then so did 12 and 14% once. A less expensive way to sustain the enthusiasm would be having boots on the ground giving regular useful reports and taking decent pics: showing that having had half the money it was half built, rather than showing a bit of fencing and some scaffolding.
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agent69
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Post by agent69 on Aug 18, 2017 17:35:55 GMT
Surprised that more people haven't been put off by the Birkenhead affair.
I'll take the first charge at 12% any day
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ben
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Post by ben on Aug 18, 2017 17:47:57 GMT
Surprised that more people haven't been put off by the Birkenhead affair. I'll take the first charge at 12% any day Same I have very little in the 14% loan, each new loan makes my 12% safer.
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Post by MrHappyGoLucky on Aug 18, 2017 19:49:39 GMT
I think the 12% loan is one of the safest DFL currently available, and will be more rock solid as the project is progressing and future tranches released, albeit its SM liquidity is another problem due its large loan size. So it's up to the investors to choose between liquidity (14%+) or security (12%) when investing in this loan.
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elliotn
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Post by elliotn on Aug 19, 2017 3:48:26 GMT
Any advance on 15%? 16%, 16% do I hear 16%? Sold to the man gesticulating on my right. Your name Sir? Mr 12%. iirc around £3m has been raised so far with another £3m to come, about halfway. So I wouldn't bet against it needing yet more encouragement. The 15% is certainly working at the moment, flying off the shelf, but then so did 12 and 14% once. A less expensive way to sustain the enthusiasm would be having boots on the ground giving regular useful reports and taking decent pics: showing that having had half the money it was half built, rather than showing a bit of fencing and some scaffolding. Collateral Rep could you give current level of unit sales please and what % of the JCT the developer would expect to fund by this; also any registered UN1s. Thanks.
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Post by Collateral Rep on Aug 19, 2017 8:51:51 GMT
Morning elliotn, I'll get an update for you next week. Many thanks, Gordon
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