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Post by Financial Thing on Jul 27, 2015 13:40:16 GMT
Jolly good, it's a very helpful spreadsheet. Maybe email PM about the mystery missing money?
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Post by Financial Thing on Jul 27, 2015 13:11:18 GMT
You can't keep buying for ever - you have to sell sometime. it's hard to see how the value of the total stock market can exceed growth in GDP on average in the long term. Millions of people wrote about not being able to envision the Dow ever reaching 10,000 after 2008. Companies will continue to profit as they have for decades, or they will simply no longer exist. Of course the stock market will correct if levels are unsustainable, but the market is viewed by smart people as a very long term investment. That's why we invest through the lows and the highs. Those who try to pick individuals stocks by trading usually lose money over the long run. It's still a safe bet.
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Post by Financial Thing on Jul 27, 2015 11:40:10 GMT
Well done oldboy. I'm not sure about the missing amount. Maybe I added incorrectly? I believe there should also be an estimate in there for repair costs. Over the lease period repairs will be needed, and particularly when the tenants move out and the house needs freshening up. It's a largely unknown cost factor but I would say 10% of the rents collected is the standard.
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Post by Financial Thing on Jul 26, 2015 23:12:22 GMT
Maybe I'm being a downer but you have to factor in risk which isn't being talked about enough in this thread. The stock market has a 100 years of history. P2P doesn't. What would happen if another housing crisis or economic crisis occurred and people started running for the P2P exits? We have no idea which P2P platforms would survive. Many P2P platforms are operating at a loss. Look at the list of busted P2P platforms hereI love P2P as much as the next guy but we are happily handing over our hard earned wonga to companies we know very little about. If the stock market was returning 10%-12% annually, less people would be considering P2P simply because of the risks involved. It still amazes me that people are happy to receive 4% in P2P because they are so used to seeing a 1% savings rate. Remember the number one rule of investing in unit trusts? Look at returns over long periods of time. P2P is sill very young. Keep in the back of your minds how comfortable people became throwing money at speculative real estate investments when the housing market was booming. My advice would be to invest in in the Vanuguard Total Stock Market Index fund (S&P500) and continue buying through the highs and the lows. I would steer clear of Europe and the FTSE. Do some P2P also, but not more than you are willing to lose. In 10 years after there is some proven history, my advice may be different.
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Post by Financial Thing on Jul 26, 2015 22:46:22 GMT
oldboy Thanks for the spreadsheet. Copy and pasting didn't work for me but file > save as a copy does. I think you are missing the 15% estimated fee Property Moose charges for growth on capital? They don't include this on the Estimated Costs page by the way. You will need to add a field for estimated value at the end of the term and then have the sheet do some extra calculations. Too much work for my Excel challenged brain but if you feel like adding it in, it would be most helpful
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Post by Financial Thing on Jul 24, 2015 11:29:54 GMT
Do you think that some platforms pose higher risk than others in concerns to stability during troubled times?
I wonder if any lenders here have experienced a platform defaulting and if so, if they received any of their funds?
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Post by Financial Thing on Jul 23, 2015 21:14:27 GMT
So forumers (is that a word?)
I've been reading some very interesting articles about P2P recently and also about the next expected economic downtown, probably which will be caused by the U.S. economy / stock market correction.
How do think P2P platforms will fair in general during the next economic downturn? As I see it, default rates are what will bring P2P to its knees and when the economy fairs poorly, I would expect default rates to soar.
I imagine some forum members have a few quid tied up in P2P so what say you? Concerned?
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Post by Financial Thing on Jul 21, 2015 15:17:52 GMT
makes sense
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Post by Financial Thing on Jul 20, 2015 17:02:04 GMT
I pulled out my calculator and ran some numbers on the 2 bed semi in Durham investment.
Here's my maths:
House purchase NET cost: £57,650 (includes PM 5% fee and other fees) Net rents for 24 months: £10,004 (this is generous since I usually calculate on 11 months to account for a vacant month) Repair fund: £1,000 (should always have 10% of rents set aside for tenant damages and repairs)
Projected valuation after 2 yrs: £67,898 Projected growth: £10,248 (£67,898 - £57,650)
Property Moose 15% Fee on Growth: £1,106 (15% of £7,379) Sales fees: £2,689 Total Fees: £3,795
END RESULT:
House purchase price: £57,650 Rent Income: £10,004 House sale: £63,103 (£67,898 - £1,000 repairs - £3,795 in sales fees) TOTAL REVENUE: £15,457 (£5,453 growth + £10,004 rental income) ROI: 26.81%
I'm sure I must have missed something.
I believe the zero repair costs estimation in the acquisition numbers is is too conservative , especially looking at the awful red carpet in the living room but other than that and aside of the obvious unknowns, these seem like strong numbers.
I'm wondering why interest isn't stronger on this property?
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Post by Financial Thing on Jul 20, 2015 16:28:44 GMT
Im no math wizard but at 8.75% simple interest should be £8313 + £5000 which = £13,303. I'm presuming the additional is taken for AG's fees?
But I still don't understand how this investment is better than shoving the money into a 4% long term compounding interest bond?
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Post by Financial Thing on Jul 20, 2015 15:28:58 GMT
I pulled up the returns calculator on the DistGen Hinton offering which shows the return as 8.75% over 19 years. Using their calculator and an initial investment of £5k, estimated returned is £11,058 after 19 years. Using compounded interest, this equates to be approx. 4.3% annually. 8.75% would be well over £24k over 19 years.
So what am I missing here?
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Post by Financial Thing on Jul 20, 2015 14:06:00 GMT
I understand how complicated loan underwriting can be. Compound web development issues on top of this and you are bound to have some teething issues / delays. In the web world, it can take days / weeks to make coding and programming changes work correctly. So personally I sympathize with the Abrate guys. And if you are receiving interest on your investment despite drawdown, who cares. Many other platforms operate the same way while others don't offer instant interest.
I really want the Ablrate business to succeed as you seem like good people with good business acumen.
Personally I loathe these interest rate bidding wars the Secondary Market. I think this reduces liquidity as Buyers and Sellers stubbornly stand their ground with the bids and offers. I wish the secondary market was a straight up buy and sell with only discounts offered if you needed to sell quickly.
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Post by Financial Thing on Jul 19, 2015 23:53:39 GMT
Makes sense. Appreciate the feedback.
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Post by Financial Thing on Jul 19, 2015 18:19:33 GMT
wiseclerk whats your opinion of the dilution risk? Could these companies issue more shares diluting your equity stake?
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Post by Financial Thing on Jul 18, 2015 20:14:14 GMT
I agree pikestaff. When one of these P2P platform fails (which is inevitable), the unknowns of how the securities / administration are handled are what makes it risky. As an investor, you could be chasing your principle investment in the legal system which has to be paid for somehow. When I hear "my company hasn't made a profit in 3 years", this makes me very nervous.
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