upland
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Post by upland on Aug 27, 2015 6:24:34 GMT
I agree but I think that they are there to manage the customer care problem. They respond pretty quickly and often explain whatever it is well but they dont seem to take much notice of other problems.
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upland
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Post by upland on Aug 26, 2015 11:52:08 GMT
The rate of increase in property loans with the same name keeps going up. There seems to be no stopping to this confusion. Its a lot of trouble to work out how much you are actually exposed to.
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upland
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Post by upland on Aug 18, 2015 13:12:37 GMT
As I see it even with asset security when a loan goes wrong one will probably be deprived of the use of the capital for perhaps up to two years and so the headline return rate is impacted significantly by relatively few bad loans. So I am hoping that the fluctuation in the return will be fairly small. Whilst this is true you would also be "earning" default interest which may or may not be recoverable as well, depending on how good the security is. We've got plans to introduce XIRR figures to the dashboard, both with and without accrued interest being included, which will help this type of analysis. There are a couple of higher priority jobs to come first so it's likely to be another month or so at the earliest. Thanks Chris , I was hoping that with AC the quality of the disaster when it goes wrong would be better than from elsewhere. It seems easy to lose 25-30% of your return with loans that go wrong hence my diversified and tortoise like approach. Surely with the higher yields the number of loans one holds must be less and any interruption will dent the returns more significantly ?
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upland
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Post by upland on Aug 18, 2015 7:55:31 GMT
I think that it is probably a difficult thing to work out meaningfully , FC quotes three figures that most of us would be used to. I have a newish holding of about 60 loans , I started 3-4 months ago with a bit over 2 K now. The dashboard rate varies from 9.9 to 10.15. I have 15% combined in the GBBA and GEIA (both equal). Typically I have weighted amounts with much more in the loans that I like the look of. But as I am no expert so a little in most of them hedges my bets a bit I feel. It makes admin and searching a bit easier for me as the risked sum indicates what I thought about it at the time. I have about 15% cash but as I grow the holdings intend to keep that to less than 5%. Most of the holdings have come from shrapnel.
I put more money into simple loans that I understand with property type first charges , avoid very high LTVs , most environmental loans or ones with only a month or two to go. I put less in second charges , trade debenture types , low interest return propositions , multiple interconnected situations , or these loans that have an LTV based upon what it will be worth when finished.
It seems to have taken a long time for much income to trickle onto the overall sum.
I dont expect it to settle down for some months more but eventually I should be able to estimate monthly income and work out some sort of real return. As I see it even with asset security when a loan goes wrong one will probably be deprived of the use of the capital for perhaps up to two years and so the headline return rate is impacted significantly by relatively few bad loans. So I am hoping that the fluctuation in the return will be fairly small.
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upland
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Post by upland on Aug 17, 2015 10:11:48 GMT
Many thanks all . informative. I had wondered whether some of the shrapnel came from the underwriters. Not being very scientific I roughly estimated that for each loan the number of active holders was probably modest so why would other holders be buying and selling like traders. I thought that most holders probably held for the duration of the loan , there probably is not a lot of relevant new information flying about. I wondered whether underwriters have different concerns and some of the shrapnel was for their cash needs. Either way I have found it interesting and have slowly build what I feel is a workable investment for me. It take time on some of these more complex investment systems to make it work for you. I do watch the reports (very sad I know) and wonder about the volume of loan parts flying about. As a programmer myself I have some sympathy for how difficult it must be to produce stable algorithms that work in all cases. Over 10 million loan units to keep track of, including historic ones that have been split apart and sold or merged with others, and counting! Accrued interest is the fun one. Recursively tracking back to any arbitrary period of time to work out who owned what so we know how much interest applies to their holding. Thankfully my SQL isn't too shabby. The ones that I dont understand are where it buys and sells a loan part for the same capital value all in about a minute. I am no better off so why bother ? I have seen where it possibly buys again a part of the same value. Hopefully the SQL indexes are 64 bit as you would probably run out if they were only 32 bit.
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upland
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Post by upland on Aug 16, 2015 11:16:01 GMT
Agreed it is complex, especially when there is sometimes an element of security provided for one project from the possible excess security assets on another project by the same borrower, but on separate unlinked SPVs. I am not saying this is wrong, and it can be beneficial. But it sure is complicated if you wish to know what is going on. I feel that this is all so new that there is a lot to take in and understand. I believe that in investment ignorance is bliss (until it goes wrong). Are you referring to some of these loans that I think benefit two SPVs?
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upland
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Post by upland on Aug 16, 2015 11:09:51 GMT
I totally agree. I'm fed up with having to view the financials tab to identify which previous loans have been taken out by the borrower. I then have to track the previous loans in the Loan Parts tab to find out my exposure (sometimes I buy second hand parts so they wouldn't show in the bids section of the earlier tranches). The names of the property loans are extremely misleading. There are various London Property Loan 1s so when a London Property Loan 2 comes along, there is no simple way of knowing if you have parts in number one or not. You can't even take any notice of the icon for You Are Lending to This Business as it's not at all accurate. I'm beginning to wonder if it is deliberately confusing in the hope of attracting more bids from lenders who would not place them if they knew their true exposure. I'm starting to get very annoyed with it. We think alike , I did wonder who would benefit if it were as obscure as it seems. It would be sad to find that ones 1% diversification was actually %3. We have not yet had time for this emerging market to be tested yet. As I understand it most of the property loans interest repayment is actually a return of capital because the development is not cash generative until refinance or sale. Its going to take some time for the real practical picture to appear.
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upland
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Post by upland on Aug 16, 2015 10:58:48 GMT
Many thanks all . informative. I had wondered whether some of the shrapnel came from the underwriters. Not being very scientific I roughly estimated that for each loan the number of active holders was probably modest so why would other holders be buying and selling like traders. I thought that most holders probably held for the duration of the loan , there probably is not a lot of relevant new information flying about. I wondered whether underwriters have different concerns and some of the shrapnel was for their cash needs.
Either way I have found it interesting and have slowly build what I feel is a workable investment for me. It take time on some of these more complex investment systems to make it work for you.
I do watch the reports (very sad I know) and wonder about the volume of loan parts flying about. As a programmer myself I have some sympathy for how difficult it must be to produce stable algorithms that work in all cases.
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upland
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Post by upland on Aug 15, 2015 7:02:37 GMT
I dont know whether it is my imagination but I wondered whether property loans were becoming harder to figure out what one is exposed to. I am sure that each project SPV / loan is covered by assets as stated but the underlying company (ies) structures may be a bit more difficult to evaluate. Its not helped by the names for different often being the same which I think obscures things. Any thoughts ?
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upland
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Post by upland on Aug 15, 2015 6:49:28 GMT
As a newcomer to AC my holdings have mainly been derived from Shrapnel. It prompts me to ask is the source of this just other people selling or are their other possibilities ?
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upland
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Post by upland on Aug 8, 2015 7:53:29 GMT
Worked well for me , much quicker.
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upland
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Assetz Capital (AC)
GBBA
Aug 8, 2015 7:48:17 GMT
Post by upland on Aug 8, 2015 7:48:17 GMT
Agree , I would be interested too. The furious logs that it produces leave me cold.
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upland
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Post by upland on Jul 30, 2015 8:10:32 GMT
Thanks , I should perhaps look at second charges securities again. I dont suppose that AC would set up a loan that was totally irretrievable if it went wrong.
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upland
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Post by upland on Jul 29, 2015 11:50:39 GMT
I am new to all this. May I ask in practice does a security being a second charge cause much of a problem if there is a default. If a borrower becomes unable to repay why should the holder of the first charge do anything ?
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upland
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Post by upland on Jul 26, 2015 20:22:52 GMT
93 active loans and out of that 17 are ‘investment paused.’ I don’t see how I can make this site work for me unless I micromanage it. Even then the odds seemed stacked against it…I am not good at flipping loans; FC never worked for me either... I take a contrarian view to perhaps the majority of lenders on p2p platforms, most of whom won't have discovered this forum and the advice within it. I expect capital losses to the extent I expect to make no more than 6% after losses over an economic cycle.
The rates of 9 to 13% typical of secured asset lending (AC, TC, SS, FS, Abl) with risk of capital losses should be compared to those platforms with strong provision funds (RS, ZP, W&Co) with rates of less than 6%, and in some cases substantially less depending on loan term. The extra yield you are getting at AC etc is to compensate you for future capital losses. Also worth noting the long run yield after losses at FC on a fully diversified portfolio is around 6.5%. Any yield over 13% implies a much elevated risk of capital loss. I avoid a few loans I consider to be higher risk (just a few loans on AC but most loans on TC) - usually due to weaker than average security, but beyond that the strategy is diversification both between platforms and between loans on a platform. Flipping loans is the wrong strategy IMO, as that is implying a fixed level of diversification, far better is when the free cash for investing has been exhausted to sell part of a loan holding to diversify into a new loan. Its a simple decision - is a yield of 6% after losses worth the effort of managing a portfolio of an absolute minimum of 200 loans ? For me it is, as I'm overweight in property, already have a substantial amount in equities via my SIPP, and I'm not keen on bonds. Its interesting to reflect upon what long term returns are in the various markets. They are often less than you think unless you have a special edge. I do wonder that we are a little seduced by these great headline rates especially as this particular game is so very new. A steady 6% return is realism.
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