huxs
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Post by huxs on Nov 26, 2015 15:32:47 GMT
What's wrong with extending prefunding to the SM? Are you suggesting that we effectively produce a list of people who would like to buy x amount in PBLxxx whenever it comes up for sale. Would this be on a first come first serve basis? For example I don't have anything on PBL048 yet but would like to diversify - if I understand your suggestion I could post, say, £100 pre-fund so that the next time £100 comes up for sale I would get it (assuming I was top of the list of those waiting for a slice). Is that what you are suggesting? Interesting idea. I like it from the point of view of being able to diversify since the SM is currently always empty when I look and when anything does appear it goes far too fast for me to buy. That's sounds like a great idea, obviously the queue would be long and people would complain about it not moving quickly enough but it would save a lot of effort and remove any advantage had by bots or people who can sit in front of the screen all day pressing refresh.
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huxs
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Post by huxs on Nov 25, 2015 16:48:50 GMT
Interesting. Sounds like the strategy has to be to (try to) sell in the penultimate month of the loan to transfer the tax liability to the unsuspecting purchaser. Nice. So the unsuspected purchaser gets hit with a full tax bill for the full 6months of interest even if the actual interest earned would only be from the last 30days ? Hmm don't like the sound of that !
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huxs
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JustUs (formerly eMoneyUnion)
Pre Funding
Nov 25, 2015 10:28:33 GMT
Post by huxs on Nov 25, 2015 10:28:33 GMT
Hi emoney,
Do you have any thoughts on introducing a pre-funding model for eMoneyUnion? I have been using the site for about 6mths and the only real draw back I have is the need to constantly have money in my account in anticipation for loans as I never know when they are coming and would likely miss most if I waited for them to appear before moving funds across.
Up until now I have only lent a small amount to each loan so having twice this amount in my account all the time (just in case you have 2 loans in 1 day) is not too bad but as I want to increase my investment I would rather not have slightly more money sitting around not earning.
I am assuming you carry out a fair bit of research on other P2P sites out there and so already probably know how some sites perform pre-funding. The Saving Stream approach seems to work very well from my point of view and pretty much makes SS hands free (except for the DD around the pipeline loans).
Your eBid system works very well for me and if that could be extended so that lenders accounts could go -ve then as long as the balance is paid within 24hr your bid stands. I know you should not let money go out the door to borrowers before you have the money in from the lenders but given that almost all of your loans are not drawn down for some days after the loan is filled then this should not be a problem.
There are obviously both -ve's and +ves of making this change from your point of view +ve's you have a better view on lender demand, -ve's hassle when -ve balances are not topped up in time but I for one would be very happy to see this change implemented.
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huxs
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Post by huxs on Nov 18, 2015 16:33:50 GMT
It would still be hugely beneficial for the information you published on this forum about the property deal would be viewable on the PM and SM. Especially if this is not a one of loan type.
Also non specific deal information like (credit rating of borrow (even if in a range), credit rating of Guarantor(even if in a range), purpose of loan (from a list of reasons), and any other information that will be interesting to the lender but will not give away the borrows identity for the personal loans. I know mintos and twino are not uk based but they provide a lot more info on personal loans which I know some people are interested in.
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huxs
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Post by huxs on Nov 17, 2015 23:21:11 GMT
Sorry for the delay in replying, I have been in London yesterday and today and I'm keen to have this loan funded under a 36H debt crowdfunded loan agreement and not for us to broker it with an institution as a whole loan. I will answer your questions one by one if I may, and many thanks for the thread you have created, it's great to have such open feedback. The £420,000 valuation is an open market value today, with no retentions. The property is in an area of high demand, with the property needing cosmetic refurbishment and this window for completion is only 28 days, the chartered surveyors valuation was in it's current condition for sale in the open market. The estate agents have stated that this will be snapped up if it does go to auction. We are aware of developers who will purchase immediately, so this is unlikely. I saw a great term today from a bridging loan company "tart and turn" which probably describes this loan opportunity down to the ground. You only have to research 4 bed detached properties on rightmove in Wilmslow Cheshire and they don't hang around for long. The borrowers are putting down £100,000 cash to purchase the property, evidenced by way of current bank statements, it is not either borrowers main residence, it's a commercial transaction albeit via a partnership as opposed to a company. The borrowers have completed other developments of a similiar nature, but again in a personal capacity as opposed to business. Private development is probably more of a correct description. The borrowers combined PAYE salaries are substantial, and they can service the loan interest payments out of personal incomes. I hope this answers your questions? Thanks for your reply, not that it will put much of a dent in the total, but I will be upping my investment in this loan tomorrow as I think I have been convinced enough that this sort of loan is a sensible investment and one that I would like to see more of in the future.
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huxs
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Post by huxs on Nov 17, 2015 23:15:12 GMT
Hi ablender, if you are asking how do you see the loan details. Then I think the answer is you cannot, eMoneyUnion do not (as far as I Know) provide any details about the loan apart from what is shown on the PM and SM pages. All the detailed information on the current property loan is only provided in an email, blog or on this forum and the guarantor loans normally have no information at all. This is one of the key things that it would be good for them to improve on the site.
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huxs
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Post by huxs on Nov 17, 2015 16:02:56 GMT
Its looking like these seems to be the types of investment that you get for a 12% returns, my guess as more and more P2P platforms fight it out for loans and new challenger banks enter these markets the quality of loans that SS can get to pay the 18+% to keep the 12% return for investors will get riskier.
Less risky bridging loans are available but paying less. For example eMoneyunion's current loan for 9% which in my uneducated view seems a lot safer and then you have the steady stream of Property loans on FC but these pay even less post fees.
Just to clarify, saying all that I will be investing in these SS loans as I am comfortable with my wide diversification and keen to mix both lower and higher risk loans at this point.
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huxs
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Post by huxs on Nov 16, 2015 15:27:48 GMT
Hi,
So as per my new thread I have started in general discussions I am going to try and rationalise the risk with this loan to test if my criteria makes sense.
I am using the following criteria to measure the risk:
Borrower risk: Private borrowers with great credit scores, good (and professional) jobs, good salary (and affordability of repayments and renovation costs checked), so minimal risk here. Property Risk: 70% LTV, at the top of my LTV comfort range but saying that private property prices are unlikely to fall more than 30% in 12months so definitely safer than other 70% LTV property loans. Lower risk here other large Bridging loans on other P2P platforms.
Property Valuation risk: No valuation docs visible due to private nature of loan, would be good to understand fire sale valuation as I assume the LTV is based on current good market conditions with sale timeline of 6months (what about if this went to Auction would it still get this price?). Post work estimate LTV of 54% is better but should be ignored at this point in time.
Other safety nets: Loan is for £295K but building working is only £50K so is this loan for the borrower's primary residence to replace existing mortgage during renovations and then re-mortgage afterwards or is for a development project buying, renovating and then selling? If the former then the likelihood of default is very low, if the later do they have any experience in this, if not a how do we know £50k is not going to turn into £100k ?? Do the renovations require any planning permission and if so are these in place already?
So bottom line is I need a bit more info to fully understand the risk but the question will probably come down to is the low Borrower risk sufficient to ensure that this loan will repay whatever circumstances and if so then 9% is probably pretty good.
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huxs
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Post by huxs on Nov 16, 2015 12:38:40 GMT
All,
I know this is going to open up a whole can of worms, and may cause more confusion than it solves but I would like to ask the question to everyone: How do you calculate Risk v's reward on Property loans and more specifically Development and Bridging Loans.
While this has always been something I have been trying to workout it has become more relevant with the spread of P2P companies offering these types of loans and the potential downward pressure this may have on returns.
On the platforms I am active on I see the following:
SS steady stream on loans at 12%
FS good pipeline of loans ranging from 11-13%
MT new large loan at 12% but new partner talking about loans with varying rates 9-12%
FC with property loans 7-10 with CB of 1-3% (but with a 1% fee) so 6%-12%
and now eMoneyUnion with a 'prime' bridging loan at 9% with a hint that at this rate there is the potential for a steady stream of deals.
How can anyone (given the information provided and is not a property expert) properly work out which loans are best to invest in. Being a smaller lender and looking mainly for diversification I am currently taking the approach of investing a little in all but I don't want to get caught in a race to the bottom.
What are the risk criteria that needs to assess for each loan? Borrower risk: how do you assess the borrower risk, is a private borrower safer than a developer ? Property Risk: Is a fully built property being re-mortgaged safer than a hole in the ground or a field with planning permission ? Property Valuation risk: What is the true fire sale Valuation, is property prices safer in London than Hull in case of recession ? Other safety nets: Is there a realistic PF, is there any current property income that would cover the interest payments etc; ?
To keep this discussion simple lets leave platform risk out of the equation.
What I think I am after is a checklist that helps me rate each loan and then allows me to make a consistent decision on if the rate is sufficient reward. Maybe this is not possible but I know there are some clever people in this forum so maybe the answer is out there (maybe the P2P platforms themselves have the answer).
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huxs
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Post by huxs on Nov 16, 2015 10:06:05 GMT
Morning, I have been thinking about this loan and what it means to the market a bit this weekend and when I get time today hopefully I will start a thread under general topics about what is the risk reward of Property loans across different P2P platforms. We have Loans on FC 7-10% (some with cash back some without), we have 12% on SS, 11-13% on FS, MT with there big loan at 12% +1.5% CB but with a new partner talking about rate from 9-12% and then of course your loan. This is only the loans I see on the platforms I am on, I know there are many more. What I struggle to comprehend is how you compare the risk of each of these and value if 8,9,10,...13% is correct?
For clarity I am on eMoney Union and have invested in this loan, if you where to bring out one of these a week would I want to invest in each one of them (and therefore reduce my overall returns, which is currently at 11%), I am not sure?
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huxs
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Post by huxs on Nov 11, 2015 16:02:10 GMT
Just got the report via email. Just reading now. Is it OK to ask any questions on here? That's one question already
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huxs
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Post by huxs on Nov 6, 2015 13:40:59 GMT
Conspiracy theories and nutters aside Who does that leave ??
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huxs
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Post by huxs on Nov 4, 2015 16:07:46 GMT
Thanks Kev,
So in a simple world where you had 2 lenders 1 offering £100 at 5.5 and 1 lend offering £100 at 5.6 a new borrower who wanted to borrow £200(for whom the RS fees and PF fees = 10%) would actually see 1 offer at 15.5% and 1 at 15.6% (give or take a bit of rounding) and would they have the ability to say they want take the 15.5% and hopefully wait for another lender to cover the balance or they raise their rate to 15.6% to get the full amount?
Or does the borrow get offered 15.5% and without seeing the lenders rates (with the fee's etc on top) decide they need to raise their rate as this doesn't get filled?
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huxs
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Post by huxs on Nov 4, 2015 11:10:39 GMT
Hi westonkevRS,
Can you please save us from ourselves (and the continual conspiracy theories) and explain how Borrower Rates are set. I like a lot of other people on this forum see what looks like strange things happening with Borrower rates that may be a lot easier to accept if we have a better understanding of who and how borrow rates are selected.
My initial (incorrect) understanding was that the borrow themselves have a very similar view of the live rates, that us Lenders have and could select if they wanted to accept the offered rate or not. This is obviously not how it works so any insight you can provide would be grateful (as well as probably save you a lot of exasperation when you read our comments that seem to question RS's scruples)
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huxs
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Post by huxs on Nov 3, 2015 15:55:23 GMT
My view is that given the type of loans unbolted provides (Pawn broking), I expect a fair amount of defaults. This has lead me to limit my investment to a small amount per loan for diversification. What I am keen to see is unbolted being able to regularly achieve the valuation amount and paying back the loan, and interest in full. Where that doesn't happen I want to see why the valuation was incorrect and how the Provision fund is used to ensure investors are not left out of pocket. Defaults in themselves are to be expected its unbolted response that will dictate the success of the platform or not.
Here's hoping they prove to be very good at handling defaults.
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