Godanubis
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Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Sept 9, 2018 9:45:18 GMT
1% max discount is typically 1 month's interest. So after a month it is impossible to sell a loan part without making a profit. This doesn't make sense to me. Perhaps the max allowable discount should increase as the loan ages so that at worst you break even, i.e. 1% at 1 month, 2% at 2 months etc. I'm quite happy with a 1% limit on the premium applied to the loan; the primary impact of increasing it would just be an even bigger slice of new attractive loans being snapped up by big players and sold on for a quick profit. I have a relatively large amount in FS I rarely buy new or relatively new loans at discounts unless < 1 month where you are paid to buy them and don’t buy any interest. Even at big discounts the early loans offer low APR usually less than other new loans and you have to buy interest which doesn’t attract any interest. This is only useful if you can sell on quickly. The best thing for most is that if you buy at -1%. You can sell easier at the end where -1% makes a better looking APR >20% and you elevate default risk and tax If you have small portfolio and fully diversify then you have a lot of work as investment in any one loan would be small unless you risk it all on one or two loans. Safest way buy the 1% cash back loans if you are inclined to hold till the end you get your discount up front to reinvest
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arby
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Post by arby on Sept 9, 2018 10:11:58 GMT
1% max discount is typically 1 month's interest. So after a month it is impossible to sell a loan part without making a profit. This doesn't make sense to me. Perhaps the max allowable discount should increase as the loan ages so that at worst you break even, i.e. 1% at 1 month, 2% at 2 months etc. I'm quite happy with a 1% limit on the premium applied to the loan; the primary impact of increasing it would just be an even bigger slice of new attractive loans being snapped up by big players and sold on for a quick profit. I have a relatively large amount in FS I rarely buy new or relatively new loans at discounts unless < 1 month where you are paid to buy them and don’t buy any interest. Even at big discounts the early loans offer low APR usually less than other new loans and you have to buy interest which doesn’t attract any interest. This is only useful if you can sell on quickly. The best thing for most is that if you buy at -1%. You can sell easier at the end where -1% makes a better looking APR >20% and you elevate default risk and tax If you have small portfolio and fully diversify then you have a lot of work as investment in any one loan would be small unless you risk it all on one or two loans. Safest way buy the 1% cash back loans if you are inclined to hold till the end you get your discount up front to reinvest Yeah, I started with trying to get 'full' diversification by investing £50 in about 100 loans. This then increased to ~£100 as standard, with loans where I felt very confident being up to £250. However, as you say, investing lots of small amounts is a lot of work; you do your DD on a £50 investment, log on at the right time to invest or trawl the SM to find it and then at the end of the day you get at best £3 for the work. So my amounts being invested in a single loan are steadily increasing again.....
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Godanubis
Member of DD Central
Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
Posts: 2,011
Likes: 1,013
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Post by Godanubis on Sept 9, 2018 10:48:26 GMT
I have a relatively large amount in FS I rarely buy new or relatively new loans at discounts unless < 1 month where you are paid to buy them and don’t buy any interest. Even at big discounts the early loans offer low APR usually less than other new loans and you have to buy interest which doesn’t attract any interest. This is only useful if you can sell on quickly. The best thing for most is that if you buy at -1%. You can sell easier at the end where -1% makes a better looking APR >20% and you elevate default risk and tax If you have small portfolio and fully diversify then you have a lot of work as investment in any one loan would be small unless you risk it all on one or two loans. Safest way buy the 1% cash back loans if you are inclined to hold till the end you get your discount up front to reinvest Yeah, I started with trying to get 'full' diversification by investing £50 in about 100 loans. This then increased to ~£100 as standard, with loans where I felt very confident being up to £250. However, as you say, investing lots of small amounts is a lot of work; you do your DD on a £50 investment, log on at the right time to invest or trawl the SM to find it and then at the end of the day you get at best £3 for the work. So my amounts being invested in a single loan are steadily increasing again..... Got it down to a fine art . I have computer set up I can check every loan for sale that fits my criteria in 15mins.I usually have £5K-20K a day to reinvest. Increases returns by 3-7% which is extra £9000 minimum a year.
It takes about an hour a day in total. Things are easier when you can buy out everything good in a loan. Takes a lot of dosh.
if you have <£5K you should be getting >15% easily
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kielbasa
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Post by kielbasa on Sept 9, 2018 12:29:12 GMT
Yeah, I started with trying to get 'full' diversification by investing £50 in about 100 loans. This then increased to ~£100 as standard, with loans where I felt very confident being up to £250. However, as you say, investing lots of small amounts is a lot of work; you do your DD on a £50 investment, log on at the right time to invest or trawl the SM to find it and then at the end of the day you get at best £3 for the work. So my amounts being invested in a single loan are steadily increasing again..... Got it down to a fine art . I have computer set up I can check every loan for sale that fits my criteria in 15mins.I usually have £5K-20K a day to reinvest. Increases returns by 3-7% which is extra £9000 minimum a year.
It takes about an hour a day in total. Things are easier when you can buy out everything good in a loan. Takes a lot of dosh.
if you have <£5K you should be getting >15% easily
godanubis, I hope you don't mind me asking the following: you say that you usually have £5k per day to reinvest, so if I assume each loan lasts 180 days, that means you have at least £900k (I think you have said elsewhere that you have seven figures invested). You say that this increases the returns by 3-7%. How is this only an extra £9000 (minimum) a year? I am not doubting that you improve your returns by being active in the secondary market, but I can't get my head around your figures. Are you able to elaborate?
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number5
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Post by number5 on Sept 9, 2018 12:44:37 GMT
Got it down to a fine art . I have computer set up I can check every loan for sale that fits my criteria in 15mins.I usually have £5K-20K a day to reinvest. Increases returns by 3-7% which is extra £9000 minimum a year.
It takes about an hour a day in total. Things are easier when you can buy out everything good in a loan. Takes a lot of dosh.
if you have <£5K you should be getting >15% easily
godanubis, I hope you don't mind me asking the following: you say that you usually have £5k per day to reinvest, so if I assume each loan lasts 180 days, that means you have at least £900k (I think you have said elsewhere that you have seven figures invested). You say that this increases the returns by 3-7%. How is this only an extra £9000 (minimum) a year? I am not doubting that you improve your returns by being active in the secondary market, but I can't get my head around your figures. Are you able to elaborate? I don't doubt the numbers either...but struggle to get my head around the strategy. Especially as I have a significant amount on sale on SM at -1% across several loans but don't see as much activity as I would expect given the above statements
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arby
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Post by arby on Sept 9, 2018 12:59:46 GMT
godanubis, I hope you don't mind me asking the following: you say that you usually have £5k per day to reinvest, so if I assume each loan lasts 180 days, that means you have at least £900k (I think you have said elsewhere that you have seven figures invested). You say that this increases the returns by 3-7%. How is this only an extra £9000 (minimum) a year? I am not doubting that you improve your returns by being active in the secondary market, but I can't get my head around your figures. Are you able to elaborate? I don't doubt the numbers either...but struggle to get my head around the strategy. Especially as I have a significant amount on sale on SM at -1% across several loans but don't see as much activity as I would expect given the above statements If buying on the SM with 1 months remaining then £5k per day would be £150k. So somewhere between £150k and £900k, as you said, shows the range that can be held depending on investment strategy. However, this assumes all loans pay back on time.... 
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kielbasa
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Post by kielbasa on Sept 9, 2018 13:04:45 GMT
I don't doubt the numbers either...but struggle to get my head around the strategy. Especially as I have a significant amount on sale on SM at -1% across several loans but don't see as much activity as I would expect given the above statements If buying on the SM with 1 months remaining then £5k per day would be £150k. So somewhere between £150k and £900k, as you said, shows the range that can be held depending on investment strategy. However, this assumes all loans pay back on time.... Doh! Thanks for explaining.
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lexo
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Post by lexo on Sept 9, 2018 15:44:07 GMT
I’m happy with 1% SM discount premium as this is relatively fair for all parties involved. Also with the new FCA proposals I’m not sure increasing SM discount premium rate will be helpful for FS. I thought that FS introduced this cap due to some regulatory restrictions. I don't think they ever told us about it. However, ABL secondary market doesn't have such cap most of the time. Also unlike on FS, ABL investors are able to trade their loans up to maturity.
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Godanubis
Member of DD Central
Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
Posts: 2,011
Likes: 1,013
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Post by Godanubis on Sept 10, 2018 1:11:35 GMT
Got it down to a fine art . I have computer set up I can check every loan for sale that fits my criteria in 15mins.I usually have £5K-20K a day to reinvest. Increases returns by 3-7% which is extra £9000 minimum a year.
It takes about an hour a day in total. Things are easier when you can buy out everything good in a loan. Takes a lot of dosh.
if you have <£5K you should be getting >15% easily
godanubis, I hope you don't mind me asking the following: you say that you usually have £5k per day to reinvest, so if I assume each loan lasts 180 days, that means you have at least £900k (I think you have said elsewhere that you have seven figures invested). You say that this increases the returns by 3-7%. How is this only an extra £9000 (minimum) a year? I am not doubting that you improve your returns by being active in the secondary market, but I can't get my head around your figures. Are you able to elaborate? It is not new money I buy and sell each day 5-20k depends on who is buying everything I have is for sale to make small profit so nothing matters eg LTV or loan rate it only matters that things sell with lower discount than I bought. Loans with high amounts for sale at one discount I avoid rarely leave money to mature if I do less than 0.5% of my capital. I have sufficient to usually buy the top rate in a lot of loans then resell lower. There are several factors I consider but rarely need to hold any loan for more than few days I can always offer at original discount if I want rid of a part. Not all my money in p2p and mid six figures in FS £9000 is minimum extra above base amount.
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Godanubis
Member of DD Central
Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
Posts: 2,011
Likes: 1,013
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Post by Godanubis on Sept 10, 2018 1:35:14 GMT
I’m happy with 1% SM discount premium as this is relatively fair for all parties involved. Also with the new FCA proposals I’m not sure increasing SM discount premium rate will be helpful for FS. I thought that FS introduced this cap due to some regulatory restrictions. I don't think they ever told us about it. However, ABL secondary market doesn't have such cap most of the time. Also unlike on FS, ABL investors are able to trade their loans up to maturity. ABL pay interest monthly so no use if you want to reduce your tax liabilities. Therefore their returns should be viewed tax paid ie. £100000 over 12 months at 12% would give £12000 less £2400 = 9.6% or 7.5% for higher tax payers . By selling in FS you get full return if you bought wisely as you transfer full tax liabilities to buyer. All above assume money not in FISA
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lexo
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Post by lexo on Sept 10, 2018 19:46:32 GMT
Thanks, but it seems that I can't edit now.
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lexo
Posts: 52
Likes: 30
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Post by lexo on Sept 10, 2018 19:54:47 GMT
Thanks, but it seems that I can't edit now.
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