jjc
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Post by jjc on May 1, 2015 16:58:05 GMT
And in the meanwhile 15%. About 14% really, if rolled up at term. Agree with the logic though, more suited to those armed with patience.
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jjc
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Post by jjc on May 1, 2015 15:52:38 GMT
j, crossed with yr latest. Agree with yr take. It really is a 500k credit card to someone who seems to have little/no liquid assets to pay it off with. If the homes get turned around quickly & sold then great, if not trouble looms. He's got to move quickly (Notts Uni autumn term starts 21st Sep, students will be signing up for accommodation Jul/Aug).
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jjc
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Post by jjc on May 1, 2015 15:43:50 GMT
shimself – he may be worth 8M but if it’s tied up in properties he can’t use it to fund further deals. He’s getting 100% finance effectively upfront from AC (think of it as a 500k credit line, wow!) hence the 15% rate. Other thoughts in reply to j: One perhaps not irrelevant risk I see is that if he’s targeting the student market he’s going to need to move very quickly. Even if he has some props already lined up, allowing for purchase, valuation, AC approval into the deal etc the window to refurb, license & let could be just a couple of months if that.. Could mean long void periods till spring term at least / slower sales / lower selling prices. This loan is for rolled up interest (we’ll only get paid if/when he sells a property). I can see lenders being tempted by the headline rate but if some sales don’t go through quickly before autumn & no repayments are made opinion may change. I think exit could also be untidy. Difficult on this sort of deal to manage things so you have funds free to pay off the loan at the end of the term. Yes he is a HNW but all looks to be invested in property, no info as to liquid cash he has access to, even he might not have 500k down the back of a sofa. Lastly, eyebrows slightly raised at the declared net worth. In the Notts student loan it was reported at just 3.5m, he must have had a good couple of years since then Just my 2 cents
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jjc
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Post by jjc on Apr 13, 2015 20:59:51 GMT
You've nailed it for me ilmoro. FS have the same challenge (problem) as every other platform trying to scale. The 2 big investors can call themselves what they want but it's underwriting pure & simple. They get a fee for their service (which needs to be taken out of retail lenders' - or the platform's - margins). Nothing wrong with that ofcourse. But it does leave the question open as to how thick FS retail lending base really is going forwards. And how they will need to slice the pie accordingly. One reading could be that despite an enlarged lending base, the property deals may have soaked up enough lenders' funds to leave not that much available for the other (interesting to me - but perhaps not everyone - quirkier, lumpier asset type) deals they offer. Which in the (already real) context of leakage to MT & very likely (if it happens) exodus when a big loan goes belly up could leave a much thinner lending base than FS might really want. Might be wrong, there could be a whole line of jimmies & jobblies already lined up to support future deals. And we don't (I think?) know what FS says to its borrowers in terms of speed of funding of a loan. 24 hours pretty much guaranteed (on non-property) is a nice calling card. But would this deal have really filled without a couple of big helping hands? And are FS sharing out the spoils the right way? Slower fingers the only way we'll find out.
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jjc
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Post by jjc on Apr 12, 2015 18:28:17 GMT
On mikes1531’s good points, worth noting there’s 150k (half the loan) hanging on just 2 big stakes. Interesting to see how these guys take to the rate drop. One factor perhaps worth remembering on this loan: the sculptures can be taken out of storage & exhibited/displayed (without restrictions?) during the loan term (unless the terms have changed from the prior loan). Given their fragility/tinyness damage/theft/loss/oops I sneezed risks could exist on any of these outings. Insurance should mitigate (but we haven’t seen the terms) and blood & stones always springs to mind when dealing with insurers. Even if they do eventually fork out lenders may need to be prepared to have their funds tied up for a long time if something does go awry. Just a thought.
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jjc
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Post by jjc on Apr 11, 2015 10:38:37 GMT
Welcome arjwiz. A thought for AC ( andrewholgate, chris) to add to ramblin rose’s good - & quite essential for any bemused new lender who comes on & tries to understand what he can actually invest in.. - comments would it not be an idea for AC to include a “Volume traded on AM last (say) 30 (or 60/90) days” counter next to each loan? ie Highlighting to new lenders the fact that there is actually trading going on behind the scenes that they could play a part in. AC’s platform as it stands now looks rather static to an untrained new lender’s eyes (& no I didn’t even whisper deal flow)
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jjc
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Post by jjc on Apr 11, 2015 9:36:46 GMT
In case of interest to other lenders (who may like me rely on the above number being correct for their P2P portfolio management/decisions): I’ve been buying up loan 160 & have found that my YAI % (which I think should be at about 11% ie significantly lower than the loan’s current 13% rate) is actually dropping on these purchases. ISTM the YAI is calculating this loan on its 10% fallback rate. I’ve to date relied on the YAI being correct (without ever checking it). If anyone is aware of there being problems with it (now or in the past) would be useful to know. There are a number of loans with rate changes as they veer in & out of default/late repayments, YAI % should be picking these up dynamically in real time. Hope it’s a problem confined to loan 160, chris?
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jjc
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Post by jjc on Apr 4, 2015 13:29:24 GMT
Same situation as Ton & Mikes1513 & yes it's annoying. Not quite as annoying as the rubbish session logout time though. Talking of which does anyone else share security concerns re answers to our secret questions being stored (fully visible) on our profile?
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jjc
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Post by jjc on Apr 1, 2015 19:55:06 GMT
Interesting. Looks strongly weighted to US platforms, P2C the brunt, some nice niches & also higher risk borrowers (which provide the margin to offer the 8%-10% returns). They take whole loans & underwrite, pay quarterly divs. In some ways could be the type of liquid vehicle that could compete with AC’s Investment Accounts / GEIA for lenders’ funds, but not sure how much I’d want to be holding in a US downturn.
Max exposure of 20% / platform (12 listed for now). AC’s £150m (over 5yrs) about 10% of agreed funding. Nowt arrived yet it seems, can’t be long (would help deal flow).
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jjc
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Post by jjc on Mar 31, 2015 8:02:15 GMT
It wasn't mentioned (didn't even appear) on the comparison table sent out with the teaser. I've got 2 cars both identical except one has no engine. You bought the one with the engine 6 months ago, if I was to try to sell you the other one & you asked for a comparison sheet maybe you'd expect to see the (lack of) engine on the table? Mmmm
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Post by jjc on Mar 30, 2015 21:33:05 GMT
There was also 2045174533 pepperpot. 100k. Total 955k taken so far, none paid back yet AIUI.
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Post by jjc on Mar 13, 2015 12:28:15 GMT
OK. I have asked for specific data as I am currently travelling, but the difference is between what is drawn and what has been funded and waiting to draw. I will respond later and more fully. Good to see the pick-up in deal flow. andrewholgate can you please update as promised last week. Your expectations for April would also be welcome.
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Post by jjc on Mar 2, 2015 23:32:39 GMT
Blimey mikes1531 I thought sqh played a blinder digging that one out. Original sin & all that. My recollection was that Chris had made a comment back in Dec saying markdowns would be returning in Jan, if so click on his username & go through his recent postings (Feb ones will appear quickly). Sorry, not more talented here.
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jjc
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Post by jjc on Mar 2, 2015 18:26:47 GMT
This is a large loan with a fairly ordinary interest rate. Previously, underwriters would discount a loan of this size by about 0.5% to generate lender investment. With no discounting mechanism on the new software it could be stuck for a while yet.
Every loan over £1m at 10% or less had underwriter discounting at some point.
One imagines AC are happy to have a wide choice of loans available on the AM, grub for new lenders does make sense. As long as the loans are selling down tidily (this one is) it may not be a bad thing in AC’s view. On a growing platform I’m not sure it’s realistic to expect the existing lender base to snap up 100% of all new loans on dd.
How underwriters see this is another question.
What I find frustrating is that AC promise something (markdowns will be back Jan wasn’t it?) & then don’t deliver (or even comment). Lenders are left in the lurch, memories sour. The what can you believe & what can’t you equation gets worse. Not good.
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Post by jjc on Mar 2, 2015 15:53:32 GMT
What is needed is the promised significant increase in loan volume. Indicated February volume £8m (AH, this forum, 9th Feb), actual volume £2,345,000 (loans 147, 150, 152, and 154).
There's also £2m+ awaiting underwriting. Any shortfall in February will just be coming through in March rather than disappearing completely and the pipeline is shaping up for March easily being a record month.
Both above comments illuminating. I personally had AC’s current chances of executing to plan at 25% (50% 2014 track record halved again for larger ambition & yet to be seen improvements in delivering on their promises). I think (& hope!) it will get better but Feb closed not far off this mark, hmmm.
On rising targets shortfalls can add up quickly. Just an example – full text of 9th Feb guidance: February will see us looking to fund £8m and March could be our first £10m+ month. April's pipeline is looking very strong. The hiatus has been troubling for many but I was always confident it was down to a number of reasons that have now passed.
Hiatus passed or not issues aside, are AC now saying they will reach >15.655m in March? (10m target +5.655 Feb shortfall). Not sure what AC’s record month to date would be (5-6m?) but if AC are climbing down now (just a couple of weeks in) on their goal for March that’s not a good sign.
Investors like realistic, credible projections. They also like delivery that matches these (or thereabouts). Quick maths: AC have publicly stated their 300m target for 2015. If they hit 20m in Q1 that’s over 30m/month they need to make from Apr onwards. It won’t take much more shortfall before they need to hit 2014’s full year funded loan volumes every month till Dec. Eek.
Believe or not this is actually just a comment from a supportive (& to date enthusiastic) lender. Quite another story in the cruel world of capital markets. Miss your guidance & your share price gets truly clobbered. Miss it wildly (or too many times) & no analyst will have you on their Buy (or any) list.
Just as well we have some time to get prepared.
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