p2pfan
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Post by p2pfan on Aug 9, 2019 17:20:09 GMT
I'm relatively new to BridgeCrowd and am used to lending via platforms where they have reams of information about each loan, including, for instance, having one hour webinars with Q&As about each and every one before launch.
BC looks like a good platform, but is it just me who finds the concept of lending a minimum of £5k off the back of merely one or a maximum two A4 pages of information, alongside the valuation report, very risky?
Essential data is missing e.g. many loans emphasise they have a Personal Guarantee, but no information whatsoever is provided about the PG e.g. a borrower who only has £400k of assets is much riskier than somebody who has £4m of assets. Why would BC not take 20 seconds to script one more sentence to provide this essential information?
Because of the dearth of information in the loan particulars, the only other option is to study the valuation reports. They are worth their weight in gold e.g. with two of the currently available loans the valuation reports reveal the borrowers have found it impossible to sell the properties being used as collateral despite them previously having been on the market for long periods of time. Therefore one wonders how readily they would be sellable at a decent price as assets to recover lenders' money in the case of defaults.
The lack of essential information in the loan particulars and on the website information pages makes me very nervous about investing in BC.
Thoughts?
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liso
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Post by liso on Aug 9, 2019 17:43:19 GMT
I don't understand what you are asking, or why.
If you are "very nervous" about investing in BC, and find the concept "very risky", it seems obvious that you should not invest in the platform unless you want a lot of sleepless nights.
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iRobot
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Post by iRobot on Aug 9, 2019 19:14:13 GMT
Just some thoughts / opinions - definitely not advice. They are a good company (as far as P2P goes). In fact I'd say they are excellent, but the bar in this industry really isn't that high, unfortunately. The £5k minimum limit is very deliberate. Not so long ago they were considering raising it to £10k. I'd recommend they save themselves 20 seconds and not bother mentioning PGs at all. They are typically not worth the paper they are written on and, personally, I don't allow them to colour my decision making process. (Quite the opposite, in fact. If I see someone has a net worth of £xm, I'm wondering why they need expensive P2P finance. I know, 101 possible reasons why, but it raises a red flag, nonetheless.) You may find that level of detail excluded from other VRs -- kudos to the Valuer for including it. As for 'sellability', that's where the LTV comes in, as well as understanding whether the asking price has been realistic relative to MV. eg: MV=£500k, LTV=65%, asking price was £600k, but property not sold. Would the property sell if it were reduced by £100k? Possibly. Would it sell if reduced by £250k (to meet loan amount and a bit of cost)? Probably. It's all part of the risk equation. Just need to find what you're comfortable with. If you've found your comfort zone, stick to it. For my money (and risk appetite) the information provided by BC is sufficient: - Full Address
- Full name of the borrower (and/or borrower co.)
- Info on if 1st or 2nd (or occaisionally 3rd) charge
- An LTV %
- A rate %
- A VR
For (mostly) pure domestic bridging loans, I don't require more.
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Greenwood2
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Post by Greenwood2 on Aug 9, 2019 20:12:58 GMT
I'm relatively new to BridgeCrowd and am used to lending via platforms where they have reams of information about each loan, including, for instance, having one hour webinars with Q&As about each and every one before launch. BC looks like a good platform, but is it just me who finds the concept of lending a minimum of £5k off the back of merely one or a maximum two A4 pages of information, alongside the valuation report, very risky? Essential data is missing e.g. many loans emphasise they have a Personal Guarantee, but no information whatsoever is provided about the PG e.g. a borrower who only has £400k of assets is much riskier than somebody who has £4m of assets. Why would BC not take 20 seconds to script one more sentence to provide this essential information? Because of the dearth of information in the loan particulars, the only other option is to study the valuation reports. They are worth their weight in gold e.g. with two of the currently available loans the valuation reports reveal the borrowers have found it impossible to sell the properties being used as collateral despite them previously having been on the market for long periods of time. Therefore one wonders how readily they would be sellable at a decent price as assets to recover lenders' money in the case of defaults. The lack of essential information in the loan particulars and on the website information pages makes me very nervous about investing in BC. Thoughts? Best advice if you don't like it don't invest. I'm currently happy with BC.
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michaelc
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Post by michaelc on Aug 9, 2019 21:10:17 GMT
I broadly agree with my fellow forumites. Certain niggles annoy me but in the grand scheme of things they are minor.
Everyone is different but I am put off by glossy presentations and marketing surrounding a "great opportunity to invest". I don't like anymore multi-million pound schemes because I have no idea what they are worth. I now only invest in something I fully understand and a lot of the BC deals fall into that category.
I also don't pay much attention to who is borrowing. I think its much harder to assess all the variables around a borrower than it is about an asset and property is often (not always) easier to value.
That all said, the BC primary and secondary market has clearly been softening a little of late. I put that down largely to the fact we are on the cusp of a no deal brexit (woohoooo!) and that p2p in general is getting a bad press right now.
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p2pfan
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Post by p2pfan on Aug 9, 2019 23:41:43 GMT
I broadly agree with my fellow forumites. Certain niggles annoy me but in the grand scheme of things they are minor. Everyone is different but I am put off by glossy presentations and marketing surrounding a "great opportunity to invest". I don't like anymore multi-million pound schemes because I have no idea what they are worth. I now only invest in something I fully understand and a lot of the BC deals fall into that category. I also don't pay much attention to who is borrowing. I think its much harder to assess all the variables around a borrower than it is about an asset and property is often (not always) easier to value. That all said, the BC primary and secondary market has clearly been softening a little of late. I put that down largely to the fact we are on the cusp of a no deal brexit (woohoooo!) and that p2p in general is getting a bad press right now. Thank you and everyone for sharing your thoughts. Interesting to read and much appreciated. I'm with you in that I don't like glossy brochures full of salesy nonsense, but having access to core information, data and facts is an entirely different thing. Considering BC has very little information on the loans and the individuals and/or companies who are borrowing the money compared to some other P2P platforms, I suppose it's more or less a case of trusting their due diligence with each loan and hoping it is conducted as well as possible?
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Greenwood2
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Post by Greenwood2 on Aug 10, 2019 7:38:50 GMT
I broadly agree with my fellow forumites. Certain niggles annoy me but in the grand scheme of things they are minor. Everyone is different but I am put off by glossy presentations and marketing surrounding a "great opportunity to invest". I don't like anymore multi-million pound schemes because I have no idea what they are worth. I now only invest in something I fully understand and a lot of the BC deals fall into that category. I also don't pay much attention to who is borrowing. I think its much harder to assess all the variables around a borrower than it is about an asset and property is often (not always) easier to value. That all said, the BC primary and secondary market has clearly been softening a little of late. I put that down largely to the fact we are on the cusp of a no deal brexit (woohoooo!) and that p2p in general is getting a bad press right now. Thank you and everyone for sharing your thoughts. Interesting to read and much appreciated. I'm with you in that I don't like glossy brochures full of salesy nonsense, but having access to core information, data and facts is an entirely different thing. Considering BC has very little information on the loans and the individuals and/or companies who are borrowing the money compared to some other P2P platforms, I suppose it's more or less a case of trusting their due diligence with each loan and hoping it is conducted as well as possible? The main document is the valuation report for the property or properties, you can check these to some extent using Zoopla or similar, then you do need to trust BC to get all the legals properly in place, which they seem to do well. Their valuations and LTVs also seem to be much more realistic than some platforms and usually/always(?) based on current value not a projected future value. Loan updates on late loans are to the point and informative, and they are tenacious on recoveries. All subject to the usual past performance etc. I think the softening in the market is mainly due to the increasing number of new loans recently, we are getting more loans a week than we used to see in a month, quite nice to be able to log on and browse loans rather than having to be fastest finger on the notification emails!
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snowmobile
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Post by snowmobile on Aug 10, 2019 13:53:45 GMT
As above the key document in my view is the valuation report. Importantly, unlike some other platforms, the valuation report is not redacted.
Armed with the full name of the borrower and the full security address it is very easy to do your own research. It's surprising what nuggets of information can be generated by a quick google search.
The 1 or 2 page summary is useful and I'm sure some people do invest solely based upon that. Up until recently new loans would disappear so quickly that there was no time to do anything other than read that short summary.
Currently lower demand and a healthy flow of new loans means there is time for more research. That is even more important than it was previously, as the current state of the SM shows that loans may have to be held to term.
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