bg
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Post by bg on Aug 23, 2017 13:45:25 GMT
Good rate, but short duration. Loan Details: Amount: Up to £1,300,000 (minimum £1 million) Term: 10 months (6 months minimum term) Rate: 15% - Interest Only Security: 1st charge on land valued at £2 million & Personal Guarantees from each of the 4 shareholders of the Company. Instant Returns: Enabled Loan Live: 5pm 23 August 2017 The loan is to acquire land and complete the acquisition of the first phase of the project. The loan is secured against land valued for Ablrate at £2,000,000 on a 90 day sale. This will be on a first charge over the land (valuation included in the documents). Minimum term is 6 months, maximum term is 10 months. The loan will be interest only and will pay the equivalent of 15% per annum to lenders Yes on first reading it seems too good to be true...i'm wondering what the catch is.
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bg
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Post by bg on Aug 23, 2017 13:06:37 GMT
What do people think about buying up some e grade loans now at a good price, and then holding till they run down? Probably fine as long as you are well diversified as there will be defaults (i would say min 50 loans). Main thing about this that would worry me is if you decide to withdraw some of your money you don't know what FC will sell for you so you may well be left with a less diversified portfolio than you would like (unless they sell down in a clever way)
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bg
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Post by bg on Aug 22, 2017 12:00:30 GMT
Yes but as long as you are diversified you will most likely be getting an above average return. Then if you want to reduce the portfolio over time you can. I'm not sure what you mean by the only way to be sure. I don't think that is right. The more diversified you are, the closer you are to the average return. The less diversified, the higher the chance of being an outlier (above or below the average). It is right. Clearly the average return (after fees and defaults) of an A+ yielding 4.5% is < 3.5%. It's not possible for it to be higher than 3.5%. An E yielding 21.9% with an expected annual default rate of 8% has an expected return of 12.9%. Of course the volatility of such a portfolio will be significantly higher than a portfolio of A+ but if you are sufficiently well diversified you would expect a return of around 12.9%. That's why demand for E's is so high and demand for A+ is low. If you go into Sep 18th with a diversified portfolio or C/D/E loans then your expected return is above average. That is what a lot of people will do - then run the protfolio down over time.
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bg
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Post by bg on Aug 22, 2017 10:57:36 GMT
I don't think there will be. I think many people will keep running their legacy portfolios of C/D/E and pick up the high carry while withdrawing repayments/selling down as required. You don't get to decide what to sell when you sell after the 18th. So the only way to be sure is to sell everything. People who have picked the max return will pick up those CDE while the conservative users will be insulated from that. Yes but as long as you are diversified you will most likely be getting an above average return. Then if you want to reduce the portfolio over time you can. I'm not sure what you mean by the only way to be sure.
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bg
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Post by bg on Aug 22, 2017 10:17:38 GMT
Latest thought: There will be a massive glut of C/D/E being shifted at par on the 18th. I don't think there will be. I think many people will keep running their legacy portfolios of C/D/E and pick up the high carry while withdrawing repayments/selling down as required.
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bg
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Post by bg on Aug 21, 2017 19:02:36 GMT
It's hard to believe that FC's software/algorithms are up to this task given how flakey their IT systems appear sometimes. 1. They say that the investments are still subject to £20 minimum per company. So let's say you've invested £10000 you'd be looking at approximately £100 per week to reinvest (interest + capital repayments) and their algorithm is going to automatically reinvest that for you, presumably as it drips in. So every couple of days or so it's going to choose just one loan for you...on what basis? FC can have a hundred new loans to fill in a day and it's going to pick one for you. If you've selected the balanced portfolio does it simply rotate A-E each day to keep you balanced? Or will it be random in which case you could end up with a whole pile of risky E's or underperforming A's. 2. Will it choose to simply buy something from the sellers market for £5 when you have £5 in your account, or wait until it reaches £20 and invest from the new loans pot? 3. If you have over £20000 portfolio and add a further £5000 cash into your pot, will it blow the whole lot in £100 chunks (as stated 0.5% max)? If so how does it automatically sell those for you if the majority of investors are having their pots held at sub £20 investing in all the new loans. I have zero confidence in FC having a) thought this through and b) having an algorithm that will work. Cards on the table...I exited from FC earlier this year (with only the obligatory £1000 of defaults waiting to pay back or fold), but this sort of change by FC wouldn't exactly encourage me back in. Very poor. I imagine it will work in exactly the way autobid works at the moment. Seems to work ok.
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bg
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Post by bg on Aug 21, 2017 16:23:11 GMT
How can the auto bid be fair. This means I'll be getting the poor loans from companies that are reporting losses or the companies that have 2 others loans already. I don't want that. The above implies that you want to invest the time in purchasing better loans than average, necessarily requiring that someone on the other side must have worse loans than average. This is not fair. Thing seem to be going very Jeremy Corbyn round here all of a sudden!
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bg
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Post by bg on Aug 21, 2017 15:14:02 GMT
when I said I estimated 30% of people would withdraw they didn't flinch I just don't believe this to be the case. Perhaps 30% of posters on this forum will withdraw their funds, but not 30% of investors. I would confidently bet that the vast majority of FC's investors are not bidding manually - or would rather not be bidding manually if the market were fair (myself included, and I had £six_figures deployed on the platform which I withdrew and will now reinvest due to these changes). FC is not dumb, their board is not dumb and their investors are not dumb. The reason they don't flinch when you tell them that you estimate 30% of people will withdraw, is because they know that isn't the case - they'll have looked at the data and seen that <X% (<10% would be my guess) are manual bidders. Furthermore, there's clearly currently a surplus of investor cash and a shortage of quality loans being originated - so does it matter if a few highly vocal, hard to please investors take their cash elsewhere? I know what my view would be. I think it's a smart business decision - and for the avoidance of doubt I have no affiliation with FC in case I'm sounding like an insider / evangelist! I don't think it's the case either but I wanted to see how they reacted. 27% of investors are bidding manually, not all will withdraw and the pot of gold is the millions of retail investors they hope to pick up.
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bg
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Post by bg on Aug 21, 2017 15:03:50 GMT
I think for the majority of retail investors this is probably a positive. Frankly, FC never has provided the level of detail needed to allow investors to make an informed credit appraisal. It will be much simpler and "fairer" (whatever that really means). I might reinvest via this new model (since it will be "fire and forget") except that I can't really see how it offers much in the way of an advantage over FCIF. Main ones that I can see is that you don't have to pay stamp duty if you invest directly or buy in at the 3% premium FCIF is trading on.
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bg
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Post by bg on Aug 21, 2017 15:02:11 GMT
FC also called me this morning.
They are fully aware that a lot of people will be withdrawing funds (when I said I estimated 30% of people would withdraw they didn't flinch). They said they want to become a mainstream lending product, you can see where they are coming from when you look at bank savings rates. If they can achieve 7.5% net, black box then demand will be high.
As for what happens come 18th Sep - you will still have your individual holding just you will not be able to sell any particular loan. If you have a £100k portfolio and want to withdraw £20k then the auto sell will just randomly sell loan parts (or attempt to sell) to get you £20k cash out. They are confident/hopeful that liquidity will remain good enough for this to happen. I think this is the biggest risk for them, if people suddenly struggle to get their cash out there will be a bit of a panic with everyone putting their portfolios up for sale. That in itself doesn't really matter for them but it will mean less new funds coming in which potentially could matter.
It's a real shame, as others have said it takes a lot of the fun out of it and I really hate black boxes. Given that loan growth of WL has been vastly outstripping PL you can see why they dont want the hassle of all the people that have been moaning about why loan X is banded in loan Y etc. The P2P platforms are becoming more like the banks on a daily basis.
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bg
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FundingSecure (FS) in Administration
Renewals...
Aug 19, 2017 21:47:53 GMT
Post by bg on Aug 19, 2017 21:47:53 GMT
How so? I didn't bother bidding for the RR (£100 for me isn't worth the effort) but looking at the investements there must have been around £2k available, so 20 people got £100 (give or take). How would you divvy that up then £5 each to make 25p interest? What a waste of time. completely agree, I dont bother with any of these pawn loans, who knows what these assets are worth when it comes to the default, anyway what are the borrowers using the money for and how do they hope to pay it back? Thats the whole point of pawn loans though. No reason is given why the money is wanted or how it will be paid back - and you shouldn't care....it's all on the security and is why the interest rate is so high. If they don't repay, the asset is sold. A RR seems like a fairly easy asset to value and to liquidate if necessary. The reason I didn't invest is because for a couple of quid interest it just isn't worth the time or effort. I'd rather focus on the loans I can invest a sizeable chunk in.
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bg
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Post by bg on Aug 19, 2017 12:48:11 GMT
Yes but my question is:- Is that £6.3m still to be funded (or partially funded) in tranches to SS investors or has it already been funded and SS are just sitting on it and paying it out to the developer in stages? I have emails from them saying a new tranche (up to tranche 14) has hit the pipeline. All in, its not very clear. Does the loan value go up everytime a new tranche is issued? My understanding was that it does not...the £9,345,021 is the total loan that will eventually be issued and it has always said £9,345,021 but I could well be wrong. If you need a breakdown of whats been advanced, check CDs record here (DFL tab on the linked excel file) p2pindependentforum.com/post/113880This is whats been funded, anything else is still to come. Thanks, so from that the full £9,345,021 has been funded. Still it's not very clear, you'd think this info would be in the summary loan details (ie loan to date, still to fund). Makes more sense for me to exit all DFL's rather than dig around for the info. It's far from clear what size of tranches are still to be issued.
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bg
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Post by bg on Aug 19, 2017 12:23:20 GMT
How do you know how much of the £6.3m has been drawndown already though? Current loan value = £9,345,021 - first tranche £3,500,000 = £5,845,021 (£5.845m + £0.455m = £6.3m) Yes but my question is:- Is that £6.3m still to be funded (or partially funded) in tranches to SS investors or has it already been funded and SS are just sitting on it and paying it out to the developer in stages? I have emails from them saying a new tranche (up to tranche 14) has hit the pipeline. All in, its not very clear. Does the loan value go up everytime a new tranche is issued? My understanding was that it does not...the £9,345,021 is the total loan that will eventually be issued and it has always said £9,345,021 but I could well be wrong.
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bg
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Post by bg on Aug 19, 2017 12:07:48 GMT
In addition it reveals the expected loan size at time the loan was launched was £9.8m (£3.5m tranche 1, plus £6.3 across remaining tranches). So the remaining drawdowns will be between £0.455m (if exactly on budget) and £1.425m (reaching the facility limit) How do you know how much of the £6.3m has been drawndown already though?
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bg
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Post by bg on Aug 19, 2017 11:41:15 GMT
Apologies if this is covered elsewhere but us there any way you can tell how much of a loan has already been funded and therefore how much is still to hit the pipeline?
For example, DFL012. Massive loan £9.345m that regularly has a few hundred thousand available. But how many more tranches of that £9m are still to come? Is there any way of telling (easily)?
The reason I wonder is that right now there is around £100k available but most of that is supposedly the most recent unfunded trache, so if I put any up for sale it goes pretty much to the front of the queue. My fear is that come 1 Sep there may still be another £4-5m still to hit the market, in which case if I sell/or am selling I will automatically be pushed behind a large wall of money, meaning I will potentially never be able to sell out this loan.
With that in mind I'm inclined to try and liquidate my holding in this loan and any other large loan before 1 Sep or I could end up trapped with no way of selling before maturity/default. I would have more comfort if I knew how much of each loan was still to hit the market.
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