stevio
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General P2x Discussion
SIPPs
Nov 20, 2016 15:35:01 GMT
Post by stevio on Nov 20, 2016 15:35:01 GMT
I'm starting to look, using the links from Ratesetter - will report back here and if others could do the same Great, and the only clean way out of this, if there is another SIPP administrator who'll do P2P AND the same platforms you've already got money on (ReBs, FK and AssetZ in my case). But if not, any thoughts on what to do immediately ? Depends what bullet 4 in the letter really means ? If only cash movements out of P2P platform restricted (which is what is suggested by what they say about frequent movement of monies which can be both time-consuming and costly to administer), maybe that's manageable provided you've got your money on the platforms you want before end December ? But if it restricts re-investment within the P2P platform, then it'll make the repayment loan platforms - at least ReBs and FK - pretty much unusable. Could Greyfriars justify that as being in acccordance with EvolutionSipp's service standards though ? Pretty much a horrorshow for me if that is it - leaves me stuck with Greyfriars' fees but without much ability to earn the income to pay them unless some other SIPP administrator will take the whole thing over. I'm going to make an official complaint on Monday. The letter isn't very easy to understand exactly what the changes are, so will try to get clarity. I would have preferred if they implemented a cost per transactions as mine are extremely low (may even be able to manage with the 4 transactions a year). However, it seems that no new money can be added to the SIPP and its still ambiguous as to the restrictions on the money that is currently invested. If we have to withdraw any maturing loans without being able to reinvest (which seems strange as funds don't leave the platform) then this is not something I could potentially put up with. As the fees are upfront, effectively we pay for a years service that now, appears due to the restrictions, has become unusable. They should at the very least, reduce the annual fee pro rata to leaving date and also not charge to transfer out in cash (currently £250). They are already in trouble with the FCA and I will make it clear I am happy to take my complaint to them should they not offer a reasonable solution. A similar change in terms happened at H&L SIPP, I complained and got offered a much reduced annual management charge to stay. I don't expect that from Greyfriars, but at least a non costly exit would acceptable. My initial research has not thrown up any other providers that definitely have so many P2P platform choices and generally just Ratesetter and Thincats so far
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stevio
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Post by stevio on Nov 19, 2016 19:52:45 GMT
As the buyer receives the interest at the end of the loan, so if you invested early there would be more interest at the end of the loan, wouldn't this counteract the increased accrue interest to pay? Yes and no. In either case, the buyer will end up with a net gain of interest received -- the difference between the accrued interest they 'bought' and the amount of interest they'll receive at payback -- that's consistent with the amount of time they hold the part. But if they're an individual taxpayer (i.e. not a company) they'll have more income to report and more tax to pay if they buy a part that started earning interest earlier than they would on a part that started earning interest later. You might be able to answer this question, I bought a loan on the SM at a discount that I thought might be paying back early. If it pays back early, then that's a higher profit for me, right?
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stevio
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Post by stevio on Nov 19, 2016 17:19:52 GMT
How do we expect things to proceed from here? The loan is for £730k. The insurance proceeds are expected to be £750k. If the proceeds go directly to FS, I'd expect those proceeds to be used to pay off the loan. There might be a need to the borrower to inject a little bit more funds to cover the interest accrued to the time of the insurance settlement, but surely they'd be better off doing that so as to relieve themselves of the interest accruing on the FS loan. I would have thought that, even if the PP is decided to the borrower's satisfaction before the insurance payout, they'd be better off with a development loan that started with a relatively low balance and increased in line with the money being spent on the project than they would starting with a £730k loan with interest accruing on money they're not needing yet. And if the PP saga drags on for a while, then they definitely won't want to be accruing interest on a loan they don't need. Perhaps fundingsecure would be so kind as to tell us what they expect to happen when the money from the insurance claim arrives. Was the valuation based on the GDV?
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stevio
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Post by stevio on Nov 19, 2016 17:09:01 GMT
Why not just invest personally, keep a track of the investment, then hand over to child when want to? (unless its for the tax saving)
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stevio
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Post by stevio on Nov 19, 2016 14:13:37 GMT
We are looking at the withdrawal process and assessing different solutions. As it is withdrawals are processed everyday on the day they are received (before 5pm). They are processed as next day payments so Friday will be Monday latest. We pay all fees on deposits and withdrawals. We are happy to implement a system that would be quicker (by a day) and automated but would pass the cost of 1.4% of deposits onto lenders, which we would like to avoid. Alternatively we could start charging for the SM to cover the costs. Which would you prefer? Happy to look at tech solutions you know of as it something we are working on after the lender side reporting stuff on the platform. Adopt MT's system (and don't try to charge us to speed up your slower system)
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stevio
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Post by stevio on Nov 19, 2016 9:47:57 GMT
On the point of early investments starting to accrue interest on the pm immediately could anyone confirm that, where a part is sold on sm then ALL the interest is paid by the buyer or is it lost? example pm investment £100 and goes 60days before going live accrues £2 interest at live date. sell at day 30 would that give seller £3 or the £1 accrued since it went live? assumes full £100 sells. stub8535 : I have a part of the Wirral Development loan that completed last week. I made my investment over two months ago, so I've accrued 63 days' worth of interest. I put it up for sale just now, and my 'parts for sale' listing shows the price would include 63 days of interest. So as near as I can tell, the answer is, yes, ALL. That's the good news. The bad news is that if I were to try to sell it, my part probably would be priced higher than most other parts of that loan offered at the same discount because I was an early investor, so I'd probably have trouble finding a buyer without increasing my discount. As the buyer receives the interest at the end of the loan, so if you invested early there would be more interest at the end of the loan, wouldn't this counteract the increased accrue interest to pay?
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stevio
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Post by stevio on Nov 19, 2016 9:05:15 GMT
TBH, if the insurance are paying out on this, the security is possibly worth more now than it was before. The issues with demolishing the property are possibly eradicated, and part of the new build costs will be funded from insurance. Demolition by fire will most likely need the site clearing in much the same way as a normal demolition The insurance will cover the reinstatement value (the actual costs to rebuild) and not necessarily include any value due to the location
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stevio
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Post by stevio on Nov 19, 2016 8:00:49 GMT
That was fortuitous. The exact valuation update (so they can be done ) required for 70% max. As I'm not one for coincidences I'm not wondering why this isn't the first time I've seen it on SS loans. "Build costs have increased by circa £300k so we have obtained new valuation which shows an improved GDV of £4.24m so increased costs will remain within 70% of GDV".
My italics and underlining .Yes, its convenient that the valuation means the GDV remains EXACTLY at 70% LTV, not even a few pounds less
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stevio
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Ablrate (ABL) in Administration
Pledge
Nov 19, 2016 7:47:54 GMT
Post by stevio on Nov 19, 2016 7:47:54 GMT
Gauging potential is fine, SS do this with pre-funding.
However the difference is the time to live, this first loan is approx 2 month period before live with no way of amending your pledge during that time vs SS maybe a week before to set your pre-funding and ability to change right up to the live day of the loan
This does give more time to evaluate, however it does involve a lot more long term planning and will most likely end up with no one wanting to commit till the last minute or the last few tens of thousands left in the loan
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stevio
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General P2x Discussion
SIPPs
Nov 18, 2016 22:52:07 GMT
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Post by stevio on Nov 18, 2016 22:52:07 GMT
I'm starting to look, using the links from Ratesetter - will report back here and if others could do the same I have been in contact with SIPPClub whom originally introduced me to Greyfrairs a couple of years ago. Apparently they only found out from SIPPClub members today that they were planning to wound down existing SIPP business. Apparently all SIPP operators they have previously work have stopped taking introductions from them or direct approaches from clients following a recent FCA alert aimed at SIPP operators and IFAs - essentially the FCA believe introductions should be made on an advised basis based on your individual circumstances (https://www.fca.org.uk/news/news-stories/investment-advisers%E2%80%99-and-authorised-firms%E2%80%99-responsibilities-when-accepting). SIPPclub also mentioned that Greyfrairs has recently got in trouble with the FCA in another part of their business which may have led them to wind down the Evolution SIPP citywire.co.uk/new-model-adviser/news/why-did-the-fca-ask-dfm-greyfriars-to-stop-taking-in-new-money/a964716SIPPclub (who are not a IFA) do not have any solution yet although they have suggested a SSAS (an employer version of SIPPs) for those that have own personal trading business. It seems that an introduction by an IFA to a SIPP operator will be required as a minimum going forward. If anyone has any luck with finding a SIPP operator that takes on clients directly or a inexpensive IFA that performs such introductions, please report back. Whilst I understand the concerns the FCA has about non-advised clients, I firmly believe that people can determine for themselves on the suitability without having another layer of cost in the form of a IFA being imposed on them. After all, I didn't need an IFA to open up non-SIPP P2P accounts, or maybe this the thin end of the wedge.......... After reading that link, looked up the Panorama program and then back to this thread and realized that the first post in this thread was actually about that Panorama program To be honest, Greyfriars is now looking very sketchy in my mind to allow such investments in SIPPs (not P2P, but the massive commission "bonds", which are simliar to P2P, but are just a commission cash cow and are a lot riskier than P2P) I can see why they and others are placing an IFA in between them and the customer, it then ensures they don't face a claim for bad investment advice. Even though they don't give advice, the door is open to a customer claiming they have.
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stevio
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General P2x Discussion
SIPPs
Nov 18, 2016 19:40:53 GMT
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Post by stevio on Nov 18, 2016 19:40:53 GMT
Just had a letter through the post from Greyfriars: 1) Not opening any new P2P accounts after 01JAN17 2) No new funds to existing accounts after 30DEC16 3) Maturing loans allowed to be transferred into SIPP for reinvestment in alternative product. Must retain 3k min balance of Cater Allen bank account 4) Existing P2P accounts restricted to 4 transactions per year Just opened the letter - bummer! Does anyone else have experience using any other SIPP administrator that can handle P2P investments? I'm starting to look, using the links from Ratesetter - will report back here and if others could do the same
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stevio
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General P2x Discussion
SIPPs
Nov 18, 2016 17:49:57 GMT
Post by stevio on Nov 18, 2016 17:49:57 GMT
I set-up a SIPP with Greyfrairs Asset Management a couple of years ago which I use to invest on SS and RebS. I understand that Greyfrairs no longer accepts new business, but there are a number of other providers. Ratesetter name a number of SIPP providers whom they work with (Concept Group, London & Colonial, Westerby & Whitehall - www.ratesetter.com/invest/sipp) all of whom I'm sure will have similar relationships with other platforms. In respect of the operation of the SIPP, it is very straightforward. In the case of Greyfrairs, they set-up a SIPP bank account and opened accounts with SS and RebS on my request. Except for the requirement that the P2P account is linked to my SIPP bank account, I operate each P2P account in the same way as my non-SIPP accounts and have full control of these. The only time I need to speak with Greyfrairs is when I direct them to move funds out of my SIPP bank account to a platform. I imagine other SIPPs would operate in a similar way. When I set-up my SIPP, Greyfrairs were the cheapest provider charging a flat annual fee of £1,250. They allow you hold most other eligible investments such as commercial property etc, but other charges may apply depending on the amount of time they require to administer the asset - I solely use mine for P2P investment and have other SIPPs for equity and debt investments. The fee level is such that it only makes sense to set-up a SIPP for P2P if you are looking to invest £75k+ in the asset class. Depending on the provider, they may only take you on if you are a high net worth individual (from memory £100k+ income and/or £250k+ in liquid assets). I believe this is driven by the much higher regulatory burden/cost of dealing with retail customers. I recall having to provide realms of documentation to evidence my wealth which was a real pita at the time. So in summary I would fully recommend setting up a SIPP to invest in P2P if you are already comfortable with the asset class and providing you can find a SIPP operator at reasonable cost that is commensurate with the amounts you are looking to invest. The day-to-day administration of you platform accounts is no different than a normal account and apart form the usual form filling and paperwork to initially set-up the SIPP, subsequent administration is minimal/zero. Just had a letter through the post from Greyfriars: 1) Not opening any new P2P accounts after 01JAN17 2) No new funds to existing accounts after 30DEC16 3) Maturing loans allowed to be transferred into SIPP for reinvestment in alternative product. Must retain 3k min balance of Cater Allen bank account 4) Existing P2P accounts restricted to 4 transactions per year
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stevio
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Post by stevio on Nov 18, 2016 17:04:25 GMT
Hi stevio As per the email there is another £100k going in subordinate to Ablrate lenders Regards David ablrate where does this say this in the loan proposal? - previously it was "£235,000 in cash or loans made within ACI1 Ltd will be subordinated to the Ablrate debenture, further securing the transaction" now "£253,000 in cash or loans made within ACI1 Ltd will be subordinated to the Ablrate debenture, further securing the transaction" The underwriting has increased by 100k, but this is not the same ablrate is it possible to have an answer to this query please?
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stevio
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Ablrate (ABL) in Administration
Holiday Park
Nov 18, 2016 17:02:41 GMT
Post by stevio on Nov 18, 2016 17:02:41 GMT
Thanks guys. I guess two other pertinent facts are that the rate is 14% rather than the 12% offered by SS, and there's an additional layer of security (though it's hard to assess the value of it in a crunch). I am also trying to assess/understand just what this "additional layer of security" ABL has referred to on some loans actually amounts to. ".... Ablrate Lenders will be assigned the security on the transaction as well as APF taking all of the credit risk ..."Your lending to APF, rather than their borrower. Its insinuating APF are more secure a borrower than their clients, therefore "less risk" (ie if their borrower defaults, we could call on the security or APF to continue to service the loan). I think the idea is lenders possibly have more faith in APF than their borrowers.
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stevio
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Ablrate (ABL) in Administration
Holiday Park
Nov 18, 2016 16:58:03 GMT
Post by stevio on Nov 18, 2016 16:58:03 GMT
Does anybody know / can anybody remember whether it is the same valuation doc / same valuer as used in the SS proposal? The new valuation is dated 14 September 2016. The SS one loan proposal was earlier in the summer. SS's valuer "reaffirmed" the valuation in July. Further down it does state that the property was only visited on 26JULY2015 and 25MARCH2016, further down in section 4.3 it states "we have assumed vacant possession will be available on completion of the purchase", suggesting it was done prior to a purchase - I think it might be a rehash of the original valuation with just a new date stamped on the first page However, the Ablrate valuation is for a finished development, not its current condition. Therefore the valuation, 90 and 180 day sale values are pointless, unless the funds are released in tranches during development with a maximum LTV throughout the project. The reinstatement value 1.7m+VAT (approx 2m) might be a better indication of current sale value, however this might take a long time to sell, given the 5yr previous sale period, so a 90 day valuation might be more realistic at maybe 1.5m (we are left to guess as the valuer hasn't given a value in its current condition).
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